ONEOK INC NEW
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
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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
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L. Segments
Segment Descriptions - Our operations are divided into four reportable business segments as follows:
our Natural Gas Gathering and Processing segment gathers, treats, processes and markets natural gas;
our Natural Gas Liquids segment gathers, treats, fractionates and transports NGLs and stores, markets and distributes Purity NGLs;
our Natural Gas Pipelines segment transports and stores natural gas; and
our Refined Products and Crude segment transports, stores, distributes, blends and markets Refined Products and crude oil.
Other and eliminations consist of corporate costs, the operating and leasing activities of our headquarters building and related parking facility, the activity of our wholly owned captive insurance company and eliminations necessary to reconcile our reportable segments to our Consolidated Financial Statements.
Operating Segment Information -The following tables set forth certain selected financial information for our operating segments for the periods indicated:
| Three Months EndedSept. 30, 2024 | Natural GasGathering andProcessing | Natural GasLiquids | Natural GasPipelines | Refined Products and Crude | TotalSegments |
|---|---|---|---|---|---|
| (Millions of dollars) | |||||
| Liquids commodity sales | $648 | $3,496 | $— | $407 | $4,551 |
| Residue natural gas sales | 219 | — | — | — | 219 |
| Gathering, processing and exchange services revenue | 35 | 129 | — | — | 164 |
| Transportation and storage revenue | — | 50 | 171 | 526 | 747 |
| Other | 3 | 4 | — | 30 | 37 |
| Total revenues (a) | 905 | 3,679 | 171 | 963 | 5,718 |
| Cost of sales and fuel (exclusive of depreciation and operating costs) | (464) | (2,906) | (1) | (352) | (3,723) |
| Operating costs | (129) | (183) | (52) | (217) | (581) |
| Adjusted EBITDA from unconsolidated affiliates | — | 26 | 45 | 41 | 112 |
| Noncash compensation expense and other | 6 | 8 | 3 | 6 | 23 |
| Segment adjusted EBITDA | $318 | $624 | $166 | $441 | $1,549 |
| Depreciation and amortization | $(71) | $(89) | $(21) | $(93) | $(274) |
| Equity in net earnings (loss) from investments | $(1) | $24 | $34 | $35 | $92 |
| Capital expenditures | $102 | $247 | $56 | $45 | $450 |
(a) - Intersegment revenues are primarily from commodity sales, which are based on the contracted selling price that is generally index-based and settled monthly. Intersegment revenues for the Natural Gas Gathering and Processing segment totaled $657 million and were not material for the Natural Gas Liquids, Refined Products and Crude and Natural Gas Pipelines segments.
| Three Months EndedSept. 30, 2024 | TotalSegments | Other andEliminations | Total |
|---|---|---|---|
| (Millions of dollars) | |||
| Reconciliations of total segments to consolidated | |||
| Liquids commodity sales | $4,551 | $(691) | $3,860 |
| Residue natural gas sales | 219 | — | 219 |
| Gathering, processing and exchange services revenue | 164 | — | 164 |
| Transportation and storage revenue | 747 | (4) | 743 |
| Other | 37 | — | 37 |
| Total revenues (a) | $5,718 | $(695) | $5,023 |
| Cost of sales and fuel (exclusive of depreciation and operating costs) | $(3,723) | $696 | $(3,027) |
| Operating costs | $(581) | $(1) | $(582) |
| Depreciation and amortization | $(274) | $— | $(274) |
| Equity in net earnings from investments | $92 | $— | $92 |
| Capital expenditures | $450 | $18 | $468 |
| Three Months EndedSept. 30, 2023 | Natural GasGathering andProcessing | Natural GasLiquids | Natural GasPipelines | Refined Products and Crude (c) | TotalSegments |
|---|---|---|---|---|---|
| (Millions of dollars) | |||||
| NGL and condensate sales | $641 | $3,432 | $— | $— | $4,073 |
| Residue natural gas sales | 279 | — | 3 | — | 282 |
| Gathering, processing and exchange services revenue | 36 | 150 | — | — | 186 |
| Transportation and storage revenue | — | 48 | 143 | — | 191 |
| Other | 9 | 4 | — | 72 | 85 |
| Total revenues (a) | 965 | 3,634 | 146 | 72 | 4,817 |
| Cost of sales and fuel (exclusive of depreciation and operating costs) | (527) | (2,875) | (2) | (22) | (3,426) |
| Operating costs | (119) | (168) | (51) | (13) | (351) |
| Adjusted EBITDA from unconsolidated affiliates (b) | — | 19 | 40 | 4 | 63 |
| Noncash compensation expense and other | 4 | 6 | 3 | — | 13 |
| Segment adjusted EBITDA (b) | $323 | $616 | $136 | $41 | $1,116 |
| Depreciation and amortization | $(68) | $(85) | $(17) | $(6) | $(176) |
| Equity in net earnings from investments | $— | $17 | $29 | $3 | $49 |
| Capital expenditures | $126 | $189 | $70 | $1 | $386 |
(a) - Intersegment revenues are primarily from commodity sales, which are based on the contracted selling price that is generally index-based and settled monthly. Intersegment revenues for the Natural Gas Gathering and Processing segment totaled $620 million and were not material for the Natural Gas Liquids and Natural Gas Pipelines segments.
(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 of adjusted EBITDA for the three months ended Sept. 30, 2023.
(c) - Disaggregation of revenue for our Refined Products and Crude segment was based on a preliminary evaluation of contracts upon completion of the Magellan Acquisition.
| Three Months EndedSept. 30, 2023 | TotalSegments | Other andEliminations | Total |
|---|---|---|---|
| (Millions of dollars) | |||
| Reconciliations of total segments to consolidated | |||
| NGL and condensate sales | $4,073 | $(624) | $3,449 |
| Residue natural gas sales | 282 | — | 282 |
| Gathering, processing and exchange services revenue | 186 | — | 186 |
| Transportation and storage revenue | 191 | (3) | 188 |
| Other | 85 | (1) | 84 |
| Total revenues (a) | $4,817 | $(628) | $4,189 |
| Cost of sales and fuel (exclusive of depreciation and operating costs) | $(3,426) | $627 | $(2,799) |
| Operating costs | $(351) | $(1) | $(352) |
| Depreciation and amortization | $(176) | $(1) | $(177) |
| Equity in net earnings from investments | $49 | $— | $49 |
| Capital expenditures | $386 | $12 | $398 |
| Nine Months EndedSept. 30, 2024 | Natural GasGathering andProcessing | Natural GasLiquids | Natural GasPipelines | Refined Products and Crude | TotalSegments |
|---|---|---|---|---|---|
| (Millions of dollars) | |||||
| Liquids commodity sales | $1,912 | $10,104 | $— | $1,250 | $13,266 |
| Residue natural gas sales | 732 | — | 28 | — | 760 |
| Gathering, processing and exchange services revenue | 101 | 390 | — | — | 491 |
| Transportation and storage revenue | — | 141 | 491 | 1,490 | 2,122 |
| Other | 16 | 10 | — | 81 | 107 |
| Total revenues (a) | 2,761 | 10,645 | 519 | 2,821 | 16,746 |
| Cost of sales and fuel (exclusive of depreciation and operating costs) | (1,479) | (8,352) | (18) | (1,017) | (10,866) |
| Operating costs | (365) | (545) | (157) | (650) | (1,717) |
| Adjusted EBITDA from unconsolidated affiliates | 3 | 70 | 133 | 117 | 323 |
| Noncash compensation expense | 16 | 26 | 6 | 24 | 72 |
| Other | 59 | 3 | — | (6) | 56 |
| Segment adjusted EBITDA | $995 | $1,847 | $483 | $1,289 | $4,614 |
| Depreciation and amortization | $(215) | $(260) | $(57) | $(254) | $(786) |
| Equity in net earnings from investments | $1 | $63 | $102 | $90 | $256 |
| Investments in unconsolidated affiliates | $31 | $417 | $516 | $958 | $1,922 |
| Total assets | $7,113 | $15,701 | $2,704 | $19,031 | $44,549 |
| Capital expenditures | $319 | $785 | $187 | $120 | $1,411 |
(a) - Intersegment revenues are primarily from commodity sales, which are based on the contracted selling price that is generally index-based and settled monthly. Intersegment revenues for the Natural Gas Gathering and Processing segment totaled $1.9 billion and were not material for the Natural Gas Liquids, Refined Products and Crude and Natural Gas Pipelines segments.
| Nine Months EndedSept. 30, 2024 | TotalSegments | Other andEliminations | Total |
|---|---|---|---|
| (Millions of dollars) | |||
| Reconciliations of total segments to consolidated | |||
| Liquids commodity sales | $13,266 | $(2,025) | $11,241 |
| Residue natural gas sales | 760 | — | 760 |
| Gathering, processing and exchange services revenue | 491 | — | 491 |
| Transportation and storage revenue | 2,122 | (16) | 2,106 |
| Other | 107 | (7) | 100 |
| Total revenues (a) | $16,746 | $(2,048) | $14,698 |
| Cost of sales and fuel (exclusive of depreciation and operating costs) | $(10,866) | $2,051 | $(8,815) |
| Operating costs | $(1,717) | $(3) | $(1,720) |
| Depreciation and amortization | $(786) | $(4) | $(790) |
| Equity in net earnings from investments | $256 | $— | $256 |
| Investments in unconsolidated affiliates | $1,922 | $3 | $1,925 |
| Total assets | $44,549 | $6,501 | $51,050 |
| Capital expenditures | $1,411 | $48 | $1,459 |
| Nine Months EndedSept. 30, 2023 | Natural GasGathering andProcessing | Natural GasLiquids | Natural GasPipelines | Refined Products and Crude (c) | TotalSegments |
|---|---|---|---|---|---|
| (Millions of dollars) | |||||
| NGL and condensate sales | $1,835 | $10,103 | $— | $— | $11,938 |
| Residue natural gas sales | 1,066 | — | 28 | — | 1,094 |
| Gathering, processing and exchange services revenue | 109 | 414 | — | — | 523 |
| Transportation and storage revenue | — | 143 | 434 | — | 577 |
| Other | 22 | 9 | 1 | 72 | 104 |
| Total revenues (a) | 3,032 | 10,669 | 463 | 72 | 14,236 |
| Cost of sales and fuel (exclusive of depreciation and operating costs) | (1,787) | (8,597) | (17) | (22) | (10,423) |
| Operating costs | (339) | (481) | (145) | (13) | (978) |
| Adjusted EBITDA from unconsolidated affiliates (b) | 2 | 46 | 120 | 4 | 172 |
| Noncash compensation expense | 13 | 20 | 5 | — | 38 |
| Other | — | 775 | 1 | — | 776 |
| Segment adjusted EBITDA (b) | $921 | $2,432 | $427 | $41 | $3,821 |
| Depreciation and amortization | $(202) | $(248) | $(50) | $(6) | $(506) |
| Equity in net earnings from investments | $1 | $39 | $89 | $3 | $132 |
| Investments in unconsolidated affiliates | $26 | $417 | $440 | $911 | $1,794 |
| Total assets | $6,976 | $14,988 | $2,433 | $19,185 | $43,582 |
| Capital expenditures | $308 | $495 | $155 | $1 | $959 |
(a) - Intersegment revenues are primarily from commodity sales, which are based on the contracted selling price that is generally index-based and settled monthly. Intersegment revenues for the Natural Gas Gathering and Processing segment totaled $1.8 billion and were not material for the Natural Gas Liquids and Natural Gas Pipelines segments.
(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 $40 million of adjusted EBITDA for the nine months ended Sept. 30, 2023.
(c) - Disaggregation of revenue for our Refined Products and Crude segment was based on a preliminary evaluation of contracts upon completion of the Magellan Acquisition.
| Nine Months EndedSept. 30, 2023 | TotalSegments | Other andEliminations | Total |
|---|---|---|---|
| (Millions of dollars) | |||
| Reconciliations of total segments to consolidated | |||
| NGL and condensate sales | $11,938 | $(1,779) | $10,159 |
| Residue natural gas sales | 1,094 | — | 1,094 |
| Gathering, processing and exchange services revenue | 523 | — | 523 |
| Transportation and storage revenue | 577 | (7) | 570 |
| Other | 104 | (8) | 96 |
| Total revenues (a) | $14,236 | $(1,794) | $12,442 |
| Cost of sales and fuel (exclusive of depreciation and operating costs) | $(10,423) | $1,795 | $(8,628) |
| Operating costs | $(978) | $(3) | $(981) |
| Depreciation and amortization | $(506) | $(3) | $(509) |
| Equity in net earnings from investments | $132 | $— | $132 |
| Investments in unconsolidated affiliates | $1,794 | $1 | $1,795 |
| Total assets | $43,582 | $357 | $43,939 |
| Capital expenditures | $959 | $33 | $992 |
| Three Months EndedSept. 30, | Nine Months Ended Sept. 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Reconciliation of net income to total segment adjusted EBITDA · (Millions of dollars) | ||||
| Net income | $693 | $454 | $2,112 | $1,971 |
| Interest expense, net of capitalized interest | 325 | 215 | 923 | 561 |
| Depreciation and amortization | 274 | 177 | 790 | 509 |
| Income taxes | 219 | 141 | 670 | 616 |
| Adjusted EBITDA from unconsolidated affiliates (b) | 112 | 63 | 323 | 172 |
| Equity in net earnings from investments (b) | (92) | (49) | (256) | (132) |
| Noncash compensation expense and other | 14 | 14 | 48 | 32 |
| Other corporate costs (c) | 4 | 101 | 4 | 92 |
| Total segment adjusted EBITDA (a)(b) | $1,549 | $1,116 | $4,614 | $3,821 |
(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.
(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.
(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.
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