ONEOK INC NEW
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
OKE$85.19-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001039684-24-000138
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001039684-24-000342
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 177 previous paragraphs and 203 current paragraphs.
104 unchanged; 53 reworded; 46 added; 20 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (46)
Current report
EnLink Controlling Interest Acquisition -On Aug. 28, 2024, we entered into the EnLink Purchase Agreement with GIP to acquire GIP’s interest in EnLink consisting of 43% of the outstanding EnLink Units for $14.90 in cash per unit and 100% of the outstanding limited liability company interests in the managing member of EnLink for $300 million, for total cash consideration of approximately $3.3 billion. On Oct. 15, 2024, we completed the EnLink Controlling Interest Acquisition. We funded this acquisition with an underwritten public offering of senior notes. For additional information on our long-term debt, see Note F of the Notes to Consolidated Financial Statements in this Quarterly Report.
Current report
This acquisition meaningfully increases our scale and integrated value chain within the growing Permian Basin while expanding and extending our asset bases in the Mid-Continent, North Texas and Louisiana regions. We expect to achieve significant synergies by combining our complementary asset positions.
Current report
We intend to pursue the acquisition of the publicly held EnLink Units in a tax-free transaction. For additional information on our acquisitions, see Note B of the Notes to Consolidated Financial Statements in this Quarterly Report. See Part 2, Item 1A “Risk Factors” for further discussion of risks related to the EnLink Controlling Interest Acquisition and the Potential EnLink Transaction.
Current report
Medallion Acquisition - On Aug. 28, 2024, we also entered into the Medallion Purchase and Sale Agreement with GIP to acquire all of the equity interests in Medallion for a purchase price of $2.6 billion, subject to upward and downward adjustments specified in the Medallion Purchase and Sale Agreement, and inclusive of the purchase of additional interests in a Medallion joint venture owned by a separate third party. Medallion operations are principally composed of providing midstream services for crude oil and condensate in West Texas, specifically the Midland Basin.
Current report
The closing of this transaction is expected to occur during the fourth quarter of 2024, subject to the satisfaction of customary closing conditions, including the expiration or termination of all applicable waiting periods imposed by the Hart-Scott-Rodino
Current report
Antitrust Improvements Act of 1976, as amended. We intend to fund this acquisition with a portion of the proceeds from the September 2024 underwritten public offering of senior notes. For additional information on our long-term debt, see Note F of the Notes to Consolidated Financial Statements in this Quarterly Report. See Part 2, Item 1A “Risk Factors” for further discussion of risks related to the Medallion Acquisition.
Current report
(c) - This project is expected to be completed in two phases, with the first phase expected to be completed in the fourth quarter of 2026, and the second phase completed in the first quarter of 2027.
Current report
(d) - This table excludes EnLink’s capital projects.
Current report
In August 2024, we announced plans to rebuild our 210 MBbl/d NGL fractionator in Medford, Oklahoma. Rebuilding at Medford provides strategic benefits that include expansion options that will allow our integrated system to accommodate volume growth from the Permian Basin and the Rocky Mountain and Mid-Continent regions. The Medford fractionator will also produce butane and natural gasoline for incremental Refined Products and diluent blending opportunities in the Mid-Continent region.
Current report
Debt Issuances - In September 2024, we completed an underwritten public offering of $7.0 billion senior unsecured notes consisting of $1.25 billion, 4.25% senior notes due 2027; $600 million, 4.4% senior notes due 2029; $1.25 billion, 4.75% senior notes due 2031; $1.6 billion, 5.05% senior notes due 2034; $1.5 billion, 5.7% senior notes due 2054; and $800 million, 5.85% senior notes due 2064. The net proceeds, after deducting underwriting discounts, commissions and offering expenses, were $6.9 billion. In October 2024, we used a portion of the net proceeds from this offering to fund the EnLink Controlling Interest Acquisition and related fees and expenses. We intend to use the remaining net proceeds to fund the Medallion Acquisition and related fees and expenses, purchase additional interests in a Medallion joint venture owned by a separate third party and for general corporate purposes, which may include repayment of outstanding indebtedness, including the repurchase or redemption of existing notes.
Current report
Debt Repayments- In September 2024, we repaid the remaining $484 million of our $500 million, 2.75% senior notes at maturity with cash on hand.
Current report
Goodwill Impairment Review - We assess our goodwill for impairment at least annually as of July 1, unless events or changes in circumstances indicate an impairment may have occurred before that time. At July 1, 2024, we assessed qualitative factors to determine whether it was more likely than not that the fair value of each of our reporting units with goodwill was less than its carrying amount. After assessing qualitative factors (including macroeconomic conditions, industry and market considerations, costs and overall financial performance), we determined that it was more likely than not that the fair value of the Natural Gas Pipelines, Natural Gas Liquids and Refined Products and Crude reporting units was not less than their respective carrying value, that no further testing was necessary, and that goodwill was not considered impaired.
Current report
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. This change resulted in an additional $14 million and $40 million of adjusted EBITDA for the three and nine months ended Sept. 30, 2023, respectively.
Current report
Operating income increased $389 million for the three months ended Sept. 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Current report
•Natural Gas Gathering and Processing - a decrease of $9 million due primarily to lower realized NGL prices, net of hedging, and higher operating costs, offset partially by higher volumes in the Rocky Mountain region; and
Current report
•Natural Gas Liquids - a decrease of $6 million due primarily to lower earnings on sales of Purity NGLs held in inventory, offset partially by higher exchange services; offset by
Current report
•Consolidated Transaction Costs - a decrease of $113 million due primarily to transaction costs related to the Magellan Acquisition in 2023.
Current report
Operating income increased $448 million for the nine months ended Sept. 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Current report
•Consolidated Transaction Costs - a decrease of $116 million due primarily to transaction costs related to the Magellan Acquisition in 2023.
Current report
Diluted EPS increased for the three months ended Sept. 30, 2024, compared with the same period in 2023, due primarily to the items discussed above. Diluted EPS decreased for the nine months ended Sept. 30, 2024, compared with the same period in 2023, due primarily to the impact of the insurance settlement gain in 2023 related to the Medford incident.
Current report
Capital expenditures increased for the three and nine months ended Sept. 30, 2024, compared with the same periods in 2023, due primarily to our capital projects. Please refer to the “Recent Developments” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report for additional information on our capital projects.
Current report
Adjusted EBITDA decreased $5 million for the three months ended Sept. 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Current report
•an increase of $8 million in operating costs due primarily to higher materials and supplies expenses and outside services due primarily to the growth of our operations; and
Current report
•a decrease of $4 million due to the impact of the sale of certain Kansas assets in the second quarter of 2024; offset by
Current report
Adjusted EBITDA increased $74 million for the nine months ended Sept. 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Current report
Changes in capital expenditures for the three and nine months ended Sept. 30, 2024, compared with the same periods in 2023, relate to the timing of routine capital projects.
Current report
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. This change resulted in an additional $2 million and $7 million of adjusted EBITDA for the three and nine months ended Sept. 30, 2023, respectively.
Current report
Adjusted EBITDA increased $8 million for the three months ended Sept. 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Current report
•an increase of $36 million in exchange services due primarily to higher volumes and higher average fee rates in the Rocky Mountain region, offset partially by lower volumes in the Mid-Continent region, primarily ethane, and higher transportation costs;
Current report
•a decrease of $45 million in optimization and marketing due primarily to lower earnings on sales of Purity NGLs held in inventory. We expect an earnings benefit on the forward sales of inventory over the next two quarters; and
Current report
Adjusted EBITDA decreased $585 million for the nine months ended Sept. 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Current report
•a decrease of $43 million in optimization and marketing due primarily to lower earnings on sales of Purity NGLs held in inventory. We expect an earnings benefit on forward sales of inventory over the next two quarters; offset by
Current report
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. This change resulted in an additional $11 million and $31 million of adjusted EBITDA for the three and nine months ended Sept. 30, 2023, respectively.
Current report
Adjusted EBITDA increased $56 million for the nine months ended Sept. 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Current report
•an increase of $13 million in adjusted EBITDA from unconsolidated affiliates due primarily to increased volumes on Northern Border; offset by
Current report
Financial results and operating information for our Refined Products and Crude segment for the period subsequent to the closing of the Magellan Acquisition in 2023 were not material.
Current report
(b) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. This change resulted in an additional $14 million and $40 million of adjusted EBITDA for the three and nine months ended Sept. 30, 2023, respectively.
Current report
(c) - Includes transaction costs related to the Magellan Acquisition of $123 million, offset partially by interest income of $26 million, for the three months ended Sept. 30, 2023, and transaction costs related to the Magellan Acquisition of $133 million, offset partially by interest income of $42 million, for the nine months ended Sept. 30, 2023.
Current report
Cash Management - At Sept. 30, 2024, we had $6.5 billion of cash and cash equivalents, including cash held to fund the EnLink Controlling Interest Acquisition and the Medallion Acquisition. Our cash balance is composed primarily of highly liquid government and treasury money market funds and deposits fully insured by the Federal Deposit Insurance Corporation.
Current report
Debt Issuances - In September 2024, we completed an underwritten public offering of $7.0 billion senior unsecured notes consisting of $1.25 billion, 4.25% senior notes due 2027; $600 million, 4.4% senior notes due 2029; $1.25 billion, 4.75% senior notes due 2031; $1.6 billion, 5.05% senior notes due 2034; $1.5 billion, 5.7% senior notes due 2054; and $800 million, 5.85% senior notes due 2064. The net proceeds, after deducting underwriting discounts, commissions and offering expenses, were $6.9 billion. In October 2024, we used a portion of the net proceeds from this offering to fund the EnLink Controlling Interest Acquisition and related fees and expenses. We intend to use the remaining net proceeds to fund the Medallion Acquisition and related fees and expenses, purchase additional interests in a Medallion joint venture owned by a separate third party and for general corporate purposes, which may include the repayment of outstanding indebtedness, including the repurchase or redemption of existing notes.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Removed paragraphs (20)
Previous report
Ethane Economics - Price differentials between ethane and natural gas can cause natural gas processors to recover ethane or leave it in the natural gas stream, known as ethane rejection. As a result of these ethane economics, ethane volumes on our system can fluctuate. Ethane volumes under long-term contracts delivered to our NGL system during the second quarter of 2024 remained relatively unchanged compared with the second quarter of 2023. We estimate that there are approximately 250 MBbl/d of discretionary ethane, consisting of approximately 150 MBbl/d in the Rocky Mountain region and approximately 100 MBbl/d in the Mid-Continent region, which could be recovered and transported on our system.
Previous report
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. This change resulted in an additional $10 million and $26 million of adjusted EBITDA for the three and six months ended June 30, 2023, respectively.
Previous report
Operating income increased $492 million for the three months ended June 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Previous report
•Natural Gas Gathering and Processing - an increase of $51 million due primarily to the sale of certain Kansas assets and higher volumes in the Rocky Mountain region, offset partially by lower realized NGL and natural gas prices, net of hedging;
Previous report
•Natural Gas Liquids - an increase of $88 million due primarily to higher exchange services;
Previous report
Operating income increased $59 million for the six months ended June 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Previous report
Net income and diluted EPS decreased for the six months ended June 30, 2024, compared with the same period in 2023, due primarily to the impact of the Medford incident in 2023 and higher interest expense from higher debt balances resulting from the Magellan Acquisition, offset partially by the items discussed above and higher equity in net earnings from investments.
Previous report
Capital expenditures increased for the three and six months ended June 30, 2024, compared with the same periods in 2023, due primarily to our capital projects, including our MB-6 fractionator and NGL pipeline expansion projects.
Previous report
Adjusted EBITDA increased $58 million for the three months ended June 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Previous report
•an increase of $53 million from the sale of certain Kansas assets; and
Previous report
Adjusted EBITDA increased $79 million for the six months ended June 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Previous report
Capital expenditures increased for the three and six months ended June 30, 2024, compared with the same periods in 2023, due primarily to our routine capital projects.
Previous report
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. This change resulted in an additional $3 million and $5 million of adjusted EBITDA for the three and six months ended June 30, 2023, respectively.
Previous report
Adjusted EBITDA increased $102 million for the three months ended June 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Previous report
•an increase of $89 million in exchange services due primarily to higher volumes in the Rocky Mountain region, higher average fee rates, and lower inventory of unfractionated NGLs, offset partially by higher transportation costs;
Previous report
Adjusted EBITDA decreased $593 million for the six months ended June 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Previous report
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. This change resulted in an additional $7 million and $20 million of adjusted EBITDA for the three and six months ended June 30, 2023, respectively.
Previous report
Adjusted EBITDA increased $26 million for the six months ended June 30, 2024, compared with the same period in 2023, primarily as a result of the following:
Previous report
(b) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. This change resulted in an additional $10 million and $26 million of adjusted EBITDA for the three and six months ended June 30, 2023, respectively.
Previous report
•risks related to the Magellan Acquisition, including the risk that we may not realize the anticipated benefits of the Magellan Acquisition or successfully integrate the two companies;
Reworded paragraphs (53)
Previous wording
Market Conditions and Business Update - Earnings increased in the second quarter of 2024, compared with the second quarter of 2023, due primarily to higher NGL and natural gas processing volumes in the Rocky Mountain region, increased transportation services in the Natural Gas Pipelines segment and contributions from the Refined Products and Crude segment. With the addition of our Refined Products and Crude segment due to the Magellan Acquisition, our extensive and integrated assets are located in, and connected with, some of the most productive shale basins, as well as refineries and demand centers, in the United States. Although the energy industry has experienced many commodity cycles, we have positioned ourselves to reduce exposure to direct commodity price volatility. Each of our four reportable segments are primarily fee-based, and we expect our consolidated earnings to be more than 85% fee-based in 2024.
Current wording
Market Conditions and Business Update - Earnings increased in the third quarter of 2024, compared with the third quarter of 2023, due primarily to contributions from the Refined Products and Crude segment, higher NGL and natural gas processing volumes in the Rocky Mountain region, and increased transportation services in the Natural Gas Pipelines segment. Our extensive and integrated assets are located in, and connected with, some of the most productive shale basins, as well as refineries and demand centers, in the United States. Although the energy industry has experienced many commodity cycles, we have positioned ourselves to reduce exposure to direct commodity price volatility. Each of our four reportable segments are primarily fee-based, and we expect our consolidated earnings to be more than 85% fee-based in 2024.
Previous wording
Dividends - In February and May 2024, we paid a quarterly common stock dividend of 99 cents per share ($3.96 per share on an annualized basis), an increase of 3.7% compared with the same quarters in the prior year. Our dividend growth is due primarily to the increase in cash flows resulting from the growth of our operations. We declared a quarterly common stock dividend of 99 cents per share in July 2024. The quarterly common stock dividend will be paid August 14, 2024, to shareholders of record at the close of business on August 1, 2024.
Current wording
Dividends - In February, May and August 2024, we paid a quarterly common stock dividend of 99 cents per share ($3.96 per share on an annualized basis), an increase of 3.7% compared with the same quarters in the prior year. Our dividend growth is due primarily to the increase in cash flows resulting from the growth of our operations. We declared a quarterly common stock dividend of 99 cents per share in October 2024. The quarterly common stock dividend will be paid Nov. 14, 2024, to shareholders of record at the close of business on Nov. 1, 2024.
Previous wording
Non-GAAP Financial Measures - Adjusted EBITDA is a non-GAAP measure of our financial performance. Adjusted EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, noncash impairment charges, income taxes, noncash compensation expense and certain other noncash items. Following the Magellan Acquisition, we performed a review of our calculation methodology of adjusted EBITDA and, beginning in 2023, we updated our calculation to include the adjusted EBITDA related to our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. Adjusted EBITDA from our unconsolidated affiliates is calculated consistently with the definition above and excludes items such as interest, depreciation, income taxes and other noncash items. Although the amounts related to our unconsolidated affiliates are included in the calculation of adjusted EBITDA, such inclusion should not be understood to imply that we have control over the operations and resulting revenues, expenses or cash flows of such unconsolidated affiliates.
Current wording
Non-GAAP Financial Measures - Adjusted EBITDA is a non-GAAP measure of our financial performance. Adjusted EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, noncash impairment charges, income taxes, noncash compensation expense and certain other noncash items. Following the Magellan Acquisition, we performed a review of our calculation methodology of adjusted EBITDA and, beginning in 2023, we updated our calculation to include the adjusted EBITDA related to our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. Adjusted EBITDA from our unconsolidated affiliates is calculated consistently with the definition above and excludes items such as interest expense, depreciation and amortization, income taxes and other noncash items. Although the amounts related to our unconsolidated affiliates are included in the calculation of adjusted EBITDA, such inclusion should not be understood to imply that we have control over the operations and resulting revenues, expenses or cash flows of such unconsolidated affiliates.
Previous wording
•Natural Gas Pipelines- an increase of $11 million due primarily to higher transportation services; and
Current wording
•Natural Gas Pipelines- an increase of $21 million due primarily to higher transportation services;
Previous wording
•Refined Products and Crude - contributed $338 million to operating income for the three months ended June 30, 2024, due to the impact of the Magellan Acquisition. We began allocating certain corporate costs to this segment in the first quarter of 2024, which reduced allocations to the other segments.
Current wording
•Refined Products and Crude - contributed $267 million to operating income for the three months ended Sept. 30, 2024, due to the impact of the Magellan Acquisition; and
Previous wording
•Natural Gas Gathering and Processing - an increase of $66 million due primarily to higher volumes in the Rocky Mountain region and the sale of certain Kansas assets, offset partially by lower realized NGL and natural gas prices, net of hedging, and higher operating costs; offset by
Current wording
•Natural Gas Gathering and Processing - an increase of $57 million due primarily to higher volumes in the Rocky Mountain region and the sale of certain Kansas assets in 2024, offset partially by lower realized NGL prices, net of hedging, and higher operating costs; offset by
Previous wording
•Natural Gas Liquids - a decrease of $622 million due primarily to an insurance settlement gain in 2023 related to the Medford incident and higher operating costs, offset partially by an increase in exchange services due primarily to higher volumes in the Rocky Mountain region; offset by
Current wording
•Natural Gas Liquids - a decrease of $628 million due primarily to an insurance settlement gain in 2023 related to the Medford incident and higher operating costs, offset partially by an increase in exchange services due primarily to higher volumes in the Rocky Mountain region; offset by
Previous wording
•Natural Gas Pipelines- an increase of $14 million due primarily to higher transportation services, offset partially by higher operating costs; and
Current wording
•Natural Gas Pipelines- an increase of $35 million due primarily to higher transportation services, offset partially by higher operating costs;
Previous wording
•Refined Products and Crude - contributed $600 million to operating income for the six months ended June 30, 2024, due to the impact of the Magellan Acquisition. We began allocating certain corporate costs to this segment in the first quarter of 2024, which reduced allocations to the other segments.
Current wording
•Refined Products and Crude - contributed $867 million to operating income for the nine months ended Sept. 30, 2024, due to the impact of the Magellan Acquisition; and
Previous wording
Net income and diluted EPS increased for the three months ended June 30, 2024, compared with the same period in 2023, due primarily to the items discussed above and higher equity in net earnings from investments, offset partially by higher interest expense from higher debt balances resulting from the Magellan Acquisition.
Current wording
Net income increased for the three and nine months ended Sept. 30, 2024, compared with the same periods in 2023, due primarily to the items discussed above and higher equity in net earnings from investments, offset partially by higher interest expense due to higher debt balances resulting from the August 2023 $5.25 billion notes offering, the September 2024 $7.0 billion notes offering and the acquired debt balances from the Magellan Acquisition in 2023.
Previous wording
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. As a result of this change, adjusted EBITDA for the three and six months ended June 30, 2023, remained relatively unchanged.
Current wording
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. As a result of this change, adjusted EBITDA for the three and nine months ended Sept. 30, 2023, remained relatively unchanged.
Previous wording
•a decrease of $29 million due primarily to lower realized NGL and natural gas prices, net of hedging, offset partially by higher realized condensate prices, net of hedging.
Current wording
•a decrease of $8 million due primarily to lower realized NGL prices, net of hedging, offset partially by higher average fee rates;
Previous wording
•an increase of $38 million from higher volumes due primarily to increased production in the Rocky Mountain region; offset by
Current wording
•an increase of $17 million from higher volumes due primarily to increased production in the Rocky Mountain region.
Previous wording
•an increase of $64 million from higher volumes due primarily to increased production in the Rocky Mountain region; and
Current wording
•an increase of $81 million from higher volumes due primarily to increased production in the Rocky Mountain region; and
Previous wording
•an increase of $53 million from the sale of certain Kansas assets; offset by
Current wording
•an increase of $49 million from the sale of certain Kansas assets in 2024; offset by
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•a decrease of $22 million due primarily to lower realized NGL and natural gas prices, net of hedging, offset partially by higher realized condensate prices, net of hedging, and higher average fee rates; and
Current wording
•a decrease of $30 million due primarily to lower realized NGL prices, net of hedging, offset partially by higher average fee rates and higher realized condensate prices, net of hedging; and
Previous wording
•an increase of $20 million in operating costs due primarily to higher outside services and higher property taxes due to the growth of our operations.
Current wording
•an increase of $23 million in operating costs due primarily to higher outside services, employee-related costs and materials and supplies expenses due primarily to the growth of our operations.
Previous wording
Our natural gas processed volumes increased for the three and six months ended June 30, 2024, compared with the same periods in 2023, due primarily to increased production in the Rocky Mountain region.
Current wording
Our natural gas processed volumes increased for the three and nine months ended Sept. 30, 2024, compared with the same periods in 2023, due primarily to increased production in the Rocky Mountain region.
Previous wording
Our average fee rate increased for the three and six months ended June 30, 2024, compared with the same periods in 2023, due primarily to inflation-based escalators in our contracts.
Current wording
Our average fee rate increasedfor the three and nine months ended Sept. 30, 2024, compared with the same periods in 2023, due primarily toinflation-based escalators in our contracts.
Previous wording
Commodity Price Risk- Our Natural Gas Gathering and Processing segment is exposed to commodity price risk as a result of retaining a portion of the commodity sales proceeds associated with our fee with POP contracts. We have hedged approximately 70% of our forecasted equity volumes for our Natural Gas Gathering and Processing segment in 2024.
Current wording
Commodity Price Risk- Our Natural Gas Gathering and Processing segment is exposed to commodity price risk as a result of retaining a portion of the commodity sales proceeds associated with our fee with POP contracts. We have hedged approximately 70% of our forecasted equity volumes for our Natural Gas Gathering and Processing segment for the remainder 2024.
Previous wording
During the six months ended June 30, 2024, two third-party natural gas processing plants connected to our system were expanded, one in the Permian Basin and one in the Mid-Continent region.
Current wording
During the nine months ended Sept. 30, 2024, we connected one third-party natural gas processing plant in the Permian Basin. In addition, two third-party natural gas processing plants connected to our system were expanded, one in the Permian Basin and one in the Mid-Continent region.
Previous wording
•an increase of $14 million related to the Medford incident due to lower third-party fractionation costs in the current quarter; and
Current wording
•an increase of $18 million related to the Medford incident due to lower third-party fractionation costs in the current quarter; and
Previous wording
•an increase of $11 million in adjusted EBITDA from unconsolidated affiliates due primarily to higher volumes delivered to the Overland Pass Pipeline; offset by
Current wording
•an increase of $7 million in adjusted EBITDA from unconsolidated affiliates due primarily to higher volumes delivered to the Overland Pass Pipeline; offset by
Previous wording
•an increase of $15 million in operating costs due primarily to higher outside services and employee-related costs due primarily to the growth of our operations, and higher property insurance premiums.
Current wording
•an increase of $11 million in operating costs due primarily to higher outside services and higher employee-related costs due to the growth of our operations.
Previous wording
•a decrease of $734 million related to the Medford incident, due primarily to an insurance settlement gain in 2023 of $779 million, offset partially by $45 million of lower third-party fractionation costs in the current year; and
Current wording
•a decrease of $716 million related to the Medford incident, due primarily to an insurance settlement gain in 2023 of $779 million, offset partially by $63 million of lower third-party fractionation costs in the current year;
Previous wording
•an increase of $47 million in operating costs due primarily to planned asset maintenance and higher property insurance premiums; offset by
Current wording
•an increase of $58 million in operating costs due primarily to planned asset maintenance and higher employee-related costs due to the growth of our operations; and
Previous wording
•an increase of $164 million in exchange services due primarily to higher volumes in the Rocky Mountain region, higher average fee rates, and lower inventory of unfractionated NGLs, offset partially by higher transportation costs; and
Current wording
•an increase of $200 million in exchange services due primarily to higher volumes in the Rocky Mountain region and higher average fee rates, offset partially by lower volumes in the Gulf Coast and Mid-Continent regions, and higher transportation costs; and
Previous wording
•an increase of $17 million in adjusted EBITDA from unconsolidated affiliates due primarily to higher volumes delivered to the Overland Pass Pipeline.
Current wording
•an increase of $24 million in adjusted EBITDA from unconsolidated affiliates due primarily to higher volumes delivered to the Overland Pass Pipeline.
Previous wording
Capital expenditures increased for the three and six months ended June 30, 2024, compared with the same periods in 2023, due primarily to capital projects, which includes our MB-6 fractionator and pipeline expansion projects.
Current wording
Capital expenditures increased for the three and nine months ended Sept. 30, 2024, compared with the same periods in 2023, due primarily to capital projects, which includes our MB-6 fractionator and pipeline expansion projects.
Previous wording
While earnings increased, volumes decreased for the three and six months ended June 30, 2024, compared with the same periods in 2023, due primarily to low-margin, short-term fractionation contracts in the prior year and a contract expiration, offset partially by increased production in the Rocky Mountain region at higher fee rates.
Current wording
While earnings increased, volumes decreased for the three and nine months ended Sept. 30, 2024, compared with the same periods in 2023, due primarily to a contract expiration and low-margin short-term fractionation contracts in the prior year, offset partially by increased production in the Rocky Mountain region at higher fee rates. The three months ended Sept. 30, 2024, was also impacted by lower ethane volumes in the Mid-Continent region.
Previous wording
Adjusted EBITDA increased $19 million for the three months ended June 30, 2024, compared with the same period in 2023, due primarily to an increase of $20 million in transportation services due primarily to higher firm and interruptible rates.
Current wording
Adjusted EBITDA increased $30 million for the three months ended Sept. 30, 2024, compared with the same period in 2023, primarily as a result of an increase of $25 million in transportation services due primarily to higher firm and interruptible rates.
Previous wording
•an increase of $32 million in transportation services due primarily to higher firm and interruptible rates; offset by
Current wording
•an increase of $57 million in transportation services due primarily to higher firm and interruptible rates; and
Previous wording
•an increase of $10 million in operating costs due primarily to planned asset maintenance and employee-related costs.
Current wording
•an increase of $11 million in operating costs due primarily to planned asset maintenance and employee-related costs.
Previous wording
Capital expenditures increased for the three and six months ended June 30, 2024, compared with the same periods in 2023, due primarily to our project to reactivate previously idled storage in Texas.
Current wording
Capital expenditures decreased for the three months ended Sept. 30, 2024, compared with the same period in 2023, due primarily to completion of growth projects. Capital expenditures increased for the nine months ended Sept. 30, 2024, compared with the same period in 2023, due primarily to our project to reactivate previously idled storage in Texas.
Previous wording
Natural gas transportation capacity contracted increased for the three and six months ended June 30, 2024, compared to the same periods in 2023, due primarily to the completion of expansion projects on our assets.
Current wording
Natural gas transportation capacity contracted increased for the three and nine months ended Sept. 30, 2024, compared to the same periods in 2023, due primarily to the completion of expansion projects on our assets.
Previous wording
In July 2023, Viking filed a proposed increase in rates pursuant to Section 4 of the Natural Gas Act with the FERC. In February 2024, Viking reached a settlement in principle with the participants in the Section 4 rate case, which, if approved by the FERC, will result in an increase in rates for Viking. We do not expect the increase in rates to impact materially our results of operations.
Current wording
In July 2023, Viking filed a proposed increase in rates pursuant to Section 4 of the Natural Gas Act with the FERC. In February 2024, Viking reached a settlement with the participants in the Section 4 rate case, which was approved by the FERC in July 2024, resulting in an increase in rates for Viking.
Previous wording
(a) - The six months ended June 30, 2023, includes $702 million related to the Medford incident, including a settlement gain of $779 million, offset partially by $77 million of third-party fractionation costs.
Current wording
(a) - The nine months ended Sept. 30, 2023, includes $667 million related to the Medford incident, including a settlement gain of $779 million, offset partially by $112 million of third-party fractionation costs.
Previous wording
Cash Management - At June 30, 2024, we had $36 million of cash and cash equivalents. We use a centralized cash management program that concentrates the cash assets of our nonguarantor operating subsidiaries in joint accounts for the purposes of providing financial flexibility and lowering the cost of borrowing, transaction costs and bank fees. Our centralized cash management program provides that funds in excess of the daily needs of our operating subsidiaries are concentrated, consolidated or otherwise made available for use by other entities within our consolidated group. Our operating subsidiaries participate in this program to the extent they are permitted pursuant to FERC regulations or their operating agreements. Under the cash management program, depending on whether a participating subsidiary has short-term cash surpluses or cash requirements, we provide cash to the subsidiary or the subsidiary provides cash to us.
Current wording
We use a centralized cash management program that concentrates the cash assets of our nonguarantor operating subsidiaries in joint accounts for the purposes of providing financial flexibility and lowering the cost of borrowing, transaction costs and bank fees. Our centralized cash management program provides that funds in excess of the daily needs of our operating subsidiaries are concentrated, consolidated or otherwise made available for use by other entities within our consolidated group. Our operating subsidiaries participate in this program to the extent they are permitted pursuant to FERC regulations or their operating agreements. Under the cash management program, depending on whether a participating subsidiary has short-term cash surpluses or cash requirements, we provide cash to the subsidiary or the subsidiary provides cash to us.
Previous wording
Guarantees -ONEOK, ONEOK Partners, the Intermediate Partnership and Magellan have cross guarantees in place for ONEOK’s and ONEOK Partners’ indebtedness. The guarantees in place for our and ONEOK Partners’ indebtedness are full, irrevocable, unconditional and absolute joint and several guarantees to the holders of each series of outstanding securities. Liabilities under the guarantees rank equally in right of payment with all existing and future senior unsecured indebtedness. The Intermediate Partnership holds all of ONEOK Partners’ interests and equity in its subsidiaries, which are nonguarantors, and substantially all the assets and operations reside with nonguarantor operating subsidiaries. Magellan holds interests in its subsidiaries, which are nonguarantors, and substantially all the assets and operations reside with nonguarantor operating subsidiaries. Therefore, as allowed under Rule 13-01, we have excluded the summarized financial information for each issuer and guarantor as the combined financial information of the subsidiary issuers and parent guarantor, excluding our ownership of all the interests in ONEOK Partners and Magellan, reflect no material assets, liabilities or results of operations, apart from the guaranteed indebtedness. For additional information on our and ONEOK Partners’ indebtedness, please see Note H of the Notes to Consolidated Financial Statements in our Annual Report.
Current wording
Guarantees -ONEOK, ONEOK Partners, the Intermediate Partnership and Magellan have cross guarantees in place for ONEOK’s and ONEOK Partners’ indebtedness. The guarantees in place for our and ONEOK Partners’ indebtedness are full, irrevocable, unconditional and absolute joint and several guarantees to the holders of each series of outstanding securities. Liabilities under the guarantees rank equally in right of payment with all existing and future senior unsecured indebtedness. The Intermediate Partnership holds all of ONEOK Partners’ interests and equity in its subsidiaries, which are nonguarantors, and substantially all the assets and operations reside with nonguarantor operating subsidiaries. Magellan holds interests in its subsidiaries, which are nonguarantors, and substantially all the assets and operations reside with nonguarantor operating subsidiaries. Therefore, as allowed under Rule 13-01, we have excluded the summarized financial information for each issuer and guarantor as the combined financial information of the subsidiary issuers and parent guarantor, excluding our ownership of all the interests in ONEOK Partners and Magellan, reflect no material assets, liabilities or results of operations, apart from the guaranteed indebtedness. For additional information on our and ONEOK Partners’ indebtedness, please see Note H of the Notes to Consolidated Financial Statements in our Annual Report and Note F of the Notes to Consolidated Financial Statements in this Quarterly Report.
Previous wording
As of June 30, 2024, we had a working capital (defined as current assets less current liabilities) deficit of $1.5 billion, due primarily to current maturities of long-term debt and short-term borrowings. Generally, our working capital is influenced by several factors, including, among other things: (i) the timing of (a) debt and equity issuances, (b) the funding of capital expenditures, (c) scheduled debt payments, and (d) accounts receivable and payable; and (ii) the volume and cost of inventory and commodity imbalances. We may have working capital deficits in future periods as our long-term debt becomes current. We do not expect a working capital deficit of this nature to have a material adverse impact to our cash flows or operations.
Current wording
As of Sept. 30, 2024, we had a working capital (defined as current assets less current liabilities) deficit of $681 million, due primarily to current maturities of long-term debt. Generally, our working capital is influenced by several factors, including, among other things: (i) the timing of (a) debt and equity issuances, (b) the funding of capital expenditures, (c) scheduled debt payments and (d) accounts receivable and payable; and (ii) the volume and cost of inventory and commodity imbalances. We may have working capital deficits in future periods as our long-term debt becomes current. We do not expect a working capital deficit of this nature to have a material adverse impact to our cash flows or operations.
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