ONEOK INC NEW
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 25, 2025
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-K
Period ended 2023-12-31; filed 2024-02-27.
0001039684-24-000015
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0001039684-25-000036
Item 7. 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 159 previous paragraphs and 176 current paragraphs.
60 unchanged; 54 reworded; 60 added; 44 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 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 (60)
Current report
Acquisitions and Divestitures
Current report
EnLink Controlling Interest Acquisition - On Oct. 15, 2024, we completed the EnLink Controlling Interest Acquisition, acquiring GIP’s interest in EnLink consisting of approximately 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 $3.3 billion. Through our 100% ownership of the managing member of EnLink, we obtained control of EnLink. We used a portion of the proceeds from our September 2024 underwritten public offering of $7.0 billion senior unsecured notes to fund this acquisition.
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. Financial results and operating information related to the EnLink Controlling Interest Acquisition impacts all four business segments and is included with “Financial Results and Operating Information” for the period Oct. 15, 2024 to Dec. 31, 2024.
Current report
EnLink Acquisition - On Nov. 24, 2024, we entered into the EnLink Merger Agreement to acquire all of the publicly held EnLink Units in an all stock, tax-free transaction. On Jan. 31, 2025, we completed the EnLink Acquisition. Pursuant to the EnLink Merger Agreement, each common unit of EnLink was exchanged for a fixed ratio of 0.1412 shares of ONEOK common stock, including EnLink Units that were exchanged for all previously outstanding Series B Preferred Units immediately prior to closing. We issued 41 million shares of common stock, with a fair value of $4.0 billion as of the closing date of the EnLink Acquisition. EnLink is now a wholly owned subsidiary.
Current report
Medallion Acquisition- On Oct. 31, 2024, we completed the Medallion Acquisition with GIP, acquiring all of the equity interests in Medallion for total consideration of $2.6 billion, inclusive of the purchase of additional interests in a Medallion joint venture owned by a separate third party. We used a portion of the proceeds from our September 2024 underwritten public offering of $7.0 billion senior unsecured notes to fund this acquisition. This acquisition expands our midstream services for crude oil and condensate in West Texas, specifically in the Midland Basin. Financial results and operating information related to the Medallion Acquisition impacts our Refined Products and Crude segment and is included with "Financial Results and Operating Information" for the period Nov. 1, 2024 to Dec. 31, 2024.
Current report
Interstate Natural Gas Pipeline Divestiture - On Dec. 31, 2024, we completed sale of three of our wholly owned interstate natural gas pipeline systems to DT Midstream, Inc. for total cash consideration of $1.2 billion, and recognized a gain of $227 million. With a portion of the proceeds of the sale, we repaid the Guardian Term Loan Agreement and the Viking Term Loan Agreement. This transaction aligns and enhances our capital allocation priorities within our integrated value chain.
Current report
Gulf Coast NGL Pipelines Acquisition - On June 17, 2024, we completed the acquisition of a system of NGL pipelines from Easton Energy, a Houston-based midstream company, for approximately $280 million. This acquisition in our Natural Gas Liquids segment includes approximately 450 miles of liquids products pipelines located in the strategic Gulf Coast market centers for NGLs, Refined Products and crude oil. A portion of the Easton assets are already connected to our Mont Belvieu assets. We expect to add connections to our Houston-based assets beginning in mid-2025 through the end of 2025.
Current report
Joint Ventures - On Feb. 4, 2025, we entered into definitive agreements to form joint ventures with MPLX LP (MPLX) to construct a 400 MBbl/d liquified petroleum gas export terminal in Texas City, Texas, and a new 24-inch pipeline from our Mont Belvieu, Texas, storage facility to the new terminal. Texas City Logistics LLC, the export terminal joint venture, is owned 50% by us and 50% by MPLX, with MPLX constructing and operating the facility. MBTC Pipeline LLC, the pipeline joint venture, is owned 80% by us and 20% by MPLX, and we will construct and operate the pipeline. We expect to invest approximately $1.0 billion in these projects.
Current report
(b) - We completed construction in January 2025, and the project is partially in service. Following supply of full power, expected in mid-2025, we will reach the full capacity of 435 MBbl/d.
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
In our Natural Gas Gathering and Processing segment, we have a capital project to relocate a 150 MMcf/d processing plant to the Permian Basin from North Texas, which we expect to be in service in the first quarter of 2026.
Current report
Debt Repayments - In December 2024, we redeemed our $500 million, 4.9% senior notes due March 2025 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.
Current report
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
Due to the Medallion Acquisition and EnLink Controlling Interest Acquisition, operating results for these two companies are included in our financial results beginning Nov. 1, 2024 and Oct. 15, 2024, respectively.
Current report
•Natural Gas Gathering and Processing - an increase of $181 million due primarily to the operating income of EnLink, higher volumes in the Rocky Mountain region and the sale of certain non-strategic assets, offset partially by lower realized NGL prices, net of hedging, and higher operating costs; offset by
Current report
•Natural Gas Liquids - a decrease of $564 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 and to the operating income of EnLink; offset by
Current report
•Natural Gas Pipelines- an increase of $291 million due primarily to the interstate natural gas pipeline divestiture in 2024, higher transportation services and the operating income of EnLink;
Current report
•Refined Products and Crude - an increase of $934 million due to a full year of operating income following the Magellan Acquisition in 2023 and the operating income of Medallion and EnLink in 2024; and
Current report
•Consolidated Transaction Costs- a decrease of $85 million due primarily to higher transaction costs related to the Magellan Acquisition in 2023.
Current report
Net income increased 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 both the Magellan Acquisition in 2023 and the EnLink Controlling Interest Acquisition in 2024.
Current report
Diluted EPS decreased due primarily to the impact of the insurance settlement gain in 2023 related to the Medford incident.
Current report
2024 vs. 2023 - Adjusted EBITDA increased $240 million, primarily as a result of the following:
Current report
•an increase of $200 million due to adjusted EBITDA from EnLink;
Current report
•an increase of $59 million from the sale of certain non-strategic assets in 2024, primarily in Kansas; offset by
Current report
(a) - Includes volumes for consolidated entities only, and excludes EnLink, as EnLink operating statistics are not meaningful to full-year 2024 operating results.
Current report
2024 vs. 2023 - Adjusted EBITDA decreased $502 million primarily as a result of the following:
Current report
•a decrease of $695 million related to the Medford incident, due primarily to an insurance settlement gain in 2023 of $779 million, offset partially by $84 million of lower third-party fractionation costs in the current year;
Current report
•an increase of $77 million in operating costs due primarily to planned asset maintenance, higher employee-related costs and property taxes from the growth of our operations; and
Current report
•an increase of $184 million in exchange services due primarily to higher volumes in the Rocky Mountain region, higher average fee rates and wider commodity price differentials, offset partially by lower volumes in the Gulf Coast/Permian and Mid-Continent regions, and higher transportation costs;
Current report
•an increase of $59 million due to adjusted EBITDA from EnLink; and
Current report
2024 vs. 2023 - While exchange services earnings increased, volumes decreased in 2024 due primarily to the expiration of low-margin contracts in the prior year and lower volumes in the Permian Basin, offset partially by increased production in the Rocky Mountain region at higher fee rates.
Current report
Capital Projects - Our Natural Gas Pipelines segment invests in capital projects that provide transportation and storage services to end users. We recently reactivated previously idled storage facilities with 3 Bcf of working gas storage capacity in Texas. In addition, we are in the process of expanding our storage injection capabilities in Oklahoma, adding 4 Bcf of working gas storage capacity, which we expect to be complete in the second quarter of 2025.
Current report
Interstate Natural Gas Pipeline Divestiture - On Nov. 19, 2024, we entered into a definitive agreement with DT Midstream, Inc. to sell three of our wholly owned interstate natural gas pipeline systems. On Dec. 31, 2024, we completed the sale and recognized a gain of $227 million.
Current report
2024 vs. 2023 - Adjusted EBITDA increased $341 million primarily as a result of the following:
Current report
•an increase of $227 million due to the interstate natural gas pipeline divestiture;
Current report
•an increase of $41 million due to adjusted EBITDA from EnLink; and
Current report
•an increase of $16 million in adjusted EBITDA from unconsolidated affiliates due primarily to increased volumes on Northern Border; offset by
Current report
•an increase of $19 million in operating costs due primarily to planned asset maintenance and employee-related costs.
Current report
Capital expenditures increased in 2024 due primarily to capital projects and timing of maintenance projects.
Current report
(a) - Includes volumes for consolidated entities only and excludes EnLink, as EnLink operating statistics are not meaningful to full-year 2024 operating results.
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Removed paragraphs (44)
Previous report
Magellan Acquisition - On September 25, 2023, we completed the Magellan Acquisition. The acquisition strategically diversifies our complementary asset base and allows for significant expected synergies. Pursuant to the Merger Agreement, each common unit of Magellan was exchanged for a fixed ratio of 0.667 shares of ONEOK common stock and $25.00 of cash, for a total consideration of $14.1 billion. In addition, we assumed Magellan's debt at the fair value of $4.0 billion. We issued approximately 135 million shares of common stock, with a fair value of approximately $9.0 billion as of the closing date of the Magellan Acquisition. We funded the cash portion of the acquisition with an underwritten public offering of $5.25 billion senior unsecured notes.
Previous report
For additional information on the Magellan Acquisition, see Part II, Item 8, Note B of the Notes to Consolidated Financial Statements in this Annual Report. See Part 1, Item 1A “Risk Factors” for further discussion of risks related to the Magellan Acquisition. Additional information regarding the financial results and operating information of our Refined Products and Crude segment subsequent to the closing of the Magellan Acquisition is provided in “Financial Results and Operating Information.”
Previous report
Medford Incident- In January 2023, we reached an agreement with our insurers to settle all claims for physical damage and business interruption related to the Medford incident that occurred at our 210 MMbl/d Medford, Oklahoma, NGL fractionation facility in July 2022. Under the terms of the settlement agreement, we agreed to resolve the claims for total insurance payments of $930 million, $100 million of which was received in 2022. The remaining $830 million was received in the first quarter of 2023, resulting in a one-time settlement gain of $779 million. The proceeds serve as settlement for property damage, business interruption claims to the date of settlement and as payment in lieu of future business interruption insurance claims.
Previous report
The Medford incident resulted in an increase in operating income and adjusted EBITDA of $663 million, from the settlement gain of $779 million, offset partially by $146 million of third-party fractionation costs compared with an approximately $30 million unfavorable impact of the 45-day waiting period in the year ended December 31, 2022. We expect our cash from operations in 2024 to be impacted by incurred costs resulting from the Medford incident for which we no longer receive business interruption proceeds.
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 increased 25 MBbl/d to an average of 475 MBbl/d during 2023, compared with an average of 450 MBbl/d in 2022, due primarily to changes in ethane extraction economics. 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, that could be recovered and transported on our system.
Previous report
Debt Repayments- In 2023, we repurchased in the open market outstanding principal of certain of our senior notes in the amount of $322 million for an aggregate repurchase price of $280 million, including accrued and unpaid interest, with cash on hand. In connection with these open market repurchases, we recognized $41 million of net gains on extinguishment of debt.
Previous report
In June 2023, we redeemed our $500 million, 7.5% senior notes due September 2023 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.
Previous report
In February 2023, we redeemed our $425 million, 5.0% senior notes due September 2023 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.
Previous report
See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.
Previous report
•Natural Gas Gathering and Processing - an increase of $227 million from higher volumes in the Rocky Mountain and Mid-Continent regions and an increase of $49 million due primarily to higher average fee rates;
Previous report
•Natural Gas Liquids - an increase of $663 million related to the Medford incident and an increase of $303 million in exchange services;
Previous report
•Natural Gas Pipelines- an increase of $43 million in transportation and storage services; and
Previous report
•Refined Products and Crude - transportation and storage revenues of $535 million for the period of September 25, 2023, through December 31, 2023 due to the impact of the Magellan Acquisition; offset by
Previous report
•Consolidated Operating, Depreciation and Transaction Costs -an increase of $290 million in operating costs and depreciation expense from our Refined Products and Crude segment, an increase of $158 million from transaction costs related to the Magellan Acquisition and an increase of $239 million due primarily to higher operating costs and depreciation expense in our Natural Gas Gathering and Processing, Natural Gas Liquids and Natural Gas Pipelines segments.
Previous report
Net income and diluted EPS increased due primarily to the items discussed above, higher equity in net earnings from investments, higher interest income due to both higher cash balances and higher interest rates and net gains on extinguishment of debt related to open market repurchases. These increases were offset partially by higher income taxes and higher interest expense due to interest costs resulting from the Magellan Acquisition, which include acquired debt balances, our August 2023 $5.25 billion notes offering and commitment fees associated with our undrawn and terminated 364-day bridge loan facility.
Previous report
Capital expenditures increased due primarily to our capital projects, including our MB-6 fractionator, NGL pipeline expansion projects and the Viking compression project.
Previous report
2023 vs. 2022 - Adjusted EBITDA increased $207 million, primarily as a result of the following:
Previous report
2023 vs. 2022 - Our natural gas processed volumes increased due primarily to increased producer activity in the Rocky Mountain and Mid-Continent regions and the impact of winter weather in the Rocky Mountain region in the second and fourth quarters of 2022.
Previous report
2023 vs. 2022 - Adjusted EBITDA increased $950 million primarily as a result of the following:
Previous report
•an increase of $663 million related to the Medford incident, due to the settlement gain of $779 million, offset partially by $146 million of third-party fractionation costs, compared with an approximately $30 million unfavorable impact of the 45-day waiting period in 2022;
Previous report
•an increase of $303 million in exchange services due primarily to higher volumes across the system, offset partially by narrower commodity price differentials;
Previous report
•an increase of $20 million due primarily to higher volumes on the ONEOK North System and higher storage revenue; and
Previous report
•an increase of $88 million in operating costs due primarily to higher employee-related costs and higher outside services due to the growth of our operations, and higher property insurance premiums.
Previous report
2023 vs. 2022 - Volumes increased due primarily to increased production in the Permian Basin and Rocky Mountain region and increased ethane volumes in the Mid-Continent region.
Previous report
Capital Projects - Our Natural Gas Pipelines segment invests in capital projects that provide transportation and storage services to end users. In February 2024, the FERC approved our Saguaro Connector Pipeline, L.L.C.’s Presidential Permit application to construct and operate new international border-crossing facilities at the U.S. and Mexico border. The proposed border facilities would connect upstream with a potential intrastate pipeline, the Saguaro Connector pipeline. Additionally, the proposed border facilities would connect at the international boundary with a new pipeline under development in Mexico for delivery to a liquefied natural gas export facility on the west coast of Mexico. The final investment decision on the Saguaro Connector pipeline is expected by mid-year 2024.
Previous report
In 2023, we completed an expansion of our injection capabilities of our Oklahoma natural gas storage facilities, which allowed us to utilize and subscribe an additional 4 Bcf of our existing storage capacity, which is fully subscribed through 2027 and 90% subscribed through 2029. We are reactivating previously idled storage facilities with 3 Bcf of working gas storage capacity in Texas, which is already fully subscribed on a firm basis. We are also further expanding our injection capabilities in Oklahoma to allow us to subscribe additional firm storage capacity.
Previous report
See “Capital Projects” in the “Recent Developments” section for a discussion of our capital projects.
Previous report
2023 vs. 2022 - Adjusted EBITDA increased $71 million primarily as a result of the following:
Previous report
•an increase of $42 million in earnings from unconsolidated affiliates due to the change in calculation methodology in 2023; offset by
Previous report
•an increase of $20 million in operating costs due primarily to higher employee-related costs.
Previous report
Capital expenditures increased in 2023 due primarily to capital projects, including the Viking compression project.
Previous report
In April 2022, the FERC initiated a review of Guardian’s rates pursuant to Section 5 of the Natural Gas Act. In August 2022, Guardian reached a settlement in principle with the participants in the Section 5 rate case. The FERC approved the settlement in February 2023, which resulted in a reduction of rates starting in April 2023. The reduced rates did not have a material impact on our results of operations.
Previous report
In July 2023, Viking filed a proposed increase in rates pursuant to Section 4 of the Natural Gas Act with the FERC. The FERC is currently reviewing the filing. While the ultimate outcome of the filing cannot be predicted, we do not expect it to materially impact our results of operations.
Previous report
See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.
Previous report
In January 2023, we reached an agreement with our insurers to settle all claims for physical damage and business interruption related to the Medford incident. Under the terms of the settlement agreement, we agreed to resolve the claims for total insurance payments of $930 million, $100 million of which was received in 2022. The remaining $830 million was received in the first quarter of 2023. The proceeds serve as settlement for property damage, business interruption claims to the date of settlement and as payment in lieu of future business interruption insurance claims. We expect our cash from operations in 2024 to be impacted by incurred costs resulting from the Medford incident for which we no longer receive business interruption proceeds.
Previous report
Debt Repayments -In 2023, we repurchased in the open market outstanding principal of certain of our senior notes in the amount of $322 million for an aggregate repurchase price of $280 million, including accrued and unpaid interest, with cash on hand. In connection with these open market repurchases, we recognized $41 million of net gains on extinguishment of debt.
Previous report
In November 2023, we made an equity contribution of $91 million to Northern Border, which in combination with an equal contribution from our joint venture partner, was used to partially repay the outstanding balance of its revolving credit facility and fund capital projects.
Previous report
In June 2023, we redeemed our $500 million, 7.5% senior notes due September 2023 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.
Previous report
In June 2023, we made an equity contribution of $105 million to Roadrunner, which, in combination with an equal contribution from our joint venture partner, was used to repay Roadrunner’s outstanding debt.
Previous report
In February 2023, we redeemed our $425 million, 5.0% senior notes due September 2023 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.
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Reworded paragraphs (54)
Previous wording
For additional information on the Medford Incident, see Part II, Item 8, Note C of the Notes to Consolidated Financial Statements in this Annual Report.
Current wording
For additional information on our most recent acquisitions and divestiture, see Part II, Item 8, Note B of the Notes to Consolidated Financial Statements in this Annual Report. See Part 1, Item 1A “Risk Factors” for further discussion of risks related to these transactions.
Previous wording
Market Condition - We experienced increased volumes across our system in 2023, compared with 2022, highlighting our extensive and integrated assets located in, and connected with, some of the most productive shale basins, refining regions and demand centers, in the United States.
Current wording
Market Condition - Earnings increased in 2024, compared with 2023, due primarily to a full year of earnings from our new Refined Products and Crude segment, higher NGL and natural gas processing volumes in the Rocky Mountain region and the impact of the interstate pipeline divestiture 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.
Previous wording
Debt Issuances -In August 2023, we completed an underwritten public offering of $5.25 billion senior unsecured notes consisting of $750 million, 5.55% senior notes due 2026; $750 million, 5.65% senior notes due 2028; $500 million, 5.80% senior notes due 2030; $1.5 billion, 6.05% senior notes due 2033; and $1.75 billion, 6.625% senior notes due 2053. The net proceeds, after deducting underwriting discounts, commissions and offering expenses, were $5.2 billion. The net proceeds were used to fund the cash consideration and other costs related to the Magellan Acquisition.
Current wording
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. The net proceeds from this offering were used to fund the EnLink Controlling Interest Acquisition and the Medallion Acquisition, purchase additional interests in a Medallion joint venture owned by a separate third party, to pay fees and expenses related to the acquisitions and to repay outstanding indebtedness.
Previous wording
Share Repurchase Program - In January 2024, our Board of Directors authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock and targets the program to be largely utilized over the next four years. We expect shares to be acquired from time to time in open-market transactions or through privately negotiated transactions at our discretion, subject to market conditions and other factors. We expect any purchases to be funded by cash on hand, cash flow from operations and short-term borrowings. The program will terminate upon completion of the repurchase of $2.0 billion of common stock or on January 1, 2029, whichever occurs first. As of February 20, 2024, no shares have been repurchased under the program.
Current wording
Share Repurchase Program - In January 2024, our Board of Directors authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock. We expect shares to be acquired from time to time in open-market transactions or through privately negotiated transactions at our discretion, subject to market conditions and other factors. We expect any purchases to be funded by cash on hand, cash flow from operations and short-term borrowings. The program will terminate upon completion of the repurchase of $2.0 billion of common stock or on Jan. 1, 2029, whichever occurs first. As of Feb. 17, 2025, we repurchased 1.675 million shares for $172 million under the program.
Previous wording
Dividends - During 2023, we paid common stock dividends totaling $3.82 per share, an increase of 2% compared to the 2022 dividend of $3.74 per share. In February 2024, we paid a quarterly common stock dividend of $0.99 per share ($3.96 per share on an annualized basis), an increase of 3.7% compared with the same quarter in the prior year. Our dividend growth is primarily due to the increase in cash flows resulting from the growth of our operations.
Current wording
Dividends - During 2024, we paid common stock dividends totaling $3.96 per share, an increase of 3.7% compared to the 2023 dividend of $3.82 per share. In February 2025, we paid a quarterly common stock dividend of $1.03 per share ($4.12 per share on an annualized basis), an increase of 4% compared with the same quarter in the prior year. Our dividend growth is due primarily to the increase in cash flows resulting from the growth of our operations. The quarterly stock dividend was paid on Feb. 14, 2025, to shareholders of record at the close of business on Feb. 3, 2025.
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. In prior periods, our calculation included equity in net earnings from investments. This change resulted in an additional $62 million of adjusted EBITDA in 2023, and we have not restated prior periods. 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. In prior periods, our calculation included equity in net earnings from investments. This change resulted in an additional $62 million of adjusted EBITDA in 2023, and we have not restated prior periods. 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
We believe this non-GAAP financial measure is useful to investors because it and similar measures are used by many companies in our industry as a measurement of financial performance and is commonly employed by financial analysts and others to evaluate our financial performance and to compare financial performance among companies in our industry. Adjusted EBITDA should not be considered an alternative to net income, EPS or any other measure of financial performance presented in accordance with GAAP. Additionally, this calculation may not be comparable with similarly titled measures of other companies.
Current wording
We believe this non-GAAP financial measure is useful to investors because it and similar measures are used by many companies in our industry as a measurement of financial performance and is commonly employed by financial analysts and others to evaluate our financial performance and to compare financial performance among companies in our industry. Adjusted EBITDA should not be considered an alternative to net income, EPS or any other measure of financial performance presented in accordance with GAAP. Additionally, this calculation may not be comparable with similarly titled measures of other companies. See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” subsection.
Previous wording
2023 vs. 2022- Operating income increased $1.3 billion primarily as a result of the following:
Current wording
2024 vs. 2023- Operating income increased $917 million primarily as a result of the following:
Previous wording
Additional information regarding our financial results and operating information is provided in the following discussion for each of our four segments. In connection with the Magellan Acquisition, we reviewed our business segments in light of certain changes in the financial information regularly reviewed by our chief operating decision maker and other factors. Based on this review, we added the Refined Products and Crude segment. This change, which was effective as of September 25, 2023, had no impact on our consolidated financial statements for any periods.
Current wording
Additional information regarding our financial results and operating information is provided in the following discussion for each of our segments.
Previous wording
Capital Projects - Our Natural Gas Gathering and Processing segment invests in capital projects in NGL-rich areas where we operate.
Current wording
Capital Projects - Our Natural Gas Gathering and Processing segment invests in capital projects in natural gas and NGL-rich areas across key basins where we operate. See “Capital Projects” in the “Recent Developments” section for more information on our capital projects.
Previous wording
(a) -Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates, which resulted in an additional $3 million of adjusted EBITDA in 2023, and we have not restated prior periods. See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.
Current wording
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates, which resulted in an additional $3 million of adjusted EBITDA in 2023, and we have not restated prior periods.
Previous wording
•an increase of $227 million from higher volumes due primarily to increased producer activity in the Rocky Mountain and Mid-Continent regions, and the impact of winter weather in the Rocky Mountain region in the second and fourth quarters of 2022; and
Current wording
•an increase of $77 million from higher volumes due primarily to increased production in the Rocky Mountain region; and
Previous wording
•an increase of $49 million due primarily to higher average fee rates and realized condensate prices, net of hedging, offset partially by lower realized NGL prices, net of hedging; offset by
Current wording
•a decrease of $54 million due primarily to lower realized NGL prices, net of hedging, offset partially by higher average fee rates and realized condensate and natural gas prices, net of hedging; and
Previous wording
•an increase of $62 million in operating costs due primarily to higher employee-related costs, outside services and materials and supplies expense due primarily to the growth of our operations, and higher property insurance premiums.
Current wording
•an increase of $44 million in operating costs due primarily to higher outside services, employee-related costs and materials and supplies expense due primarily to the growth of our operations.
Previous wording
Capital expenditures remained relatively unchanged for 2023, as compared to 2022, due primarily to increased expenditures in 2023 on various capital projects, offset by expenditures in 2022 on our Demicks Lake III project completed in the first quarter of 2023.
Current wording
Capital expenditures increased for 2024, as compared to 2023, due to capital projects for EnLink.
Previous wording
Our average fee rate increased due primarily to increased contribution of volumes on higher fee contracts in the Williston Basin and inflation-based escalators in our contracts. Also, for certain fee with POP contracts, our contractual fees increased due to production volumes, delivery pressures or commodity prices relative to specified contractual thresholds.
Current wording
2024 vs. 2023 - Our natural gas processed volumes increased due primarily to increased production in the Rocky Mountain region. Our average fee rate increased due primarily to inflation-based escalators in our contracts.
Previous wording
Capital Projects - Our Natural Gas Liquids segment invests in capital projects to transport, fractionate, store, deliver to market centers and receive NGL supply from shale and other resource development areas. Our growth strategy is focused around connecting diversified supply basins from the Rocky Mountain region through the Mid-Continent region and the Permian Basin with demand for Purity NGLs from the petrochemical and refining industries and NGL exports in the Gulf Coast. We proactively monitor lead times on materials and equipment used in constructing capital projects, and we enter into procurement agreements for long-lead items for potential projects to plan for future growth. See “Capital Projects” in the “Recent Developments” section for more information on our capital projects.
Current wording
Capital Projects - Our Natural Gas Liquids segment invests in capital projects to transport, fractionate, store, deliver to market centers and receive NGL supply from shale and other resource development areas. Our growth strategy is focused on connecting diversified raw feed supply basins to Purity NGL export, petrochemical and refining demand centers. See “Capital Projects” in the “Recent Developments” section for more information on our capital projects.
Previous wording
In 2023, we connected two third-party natural gas processing plants in the Permian Basin and one affiliate natural gas processing plant in the Rocky Mountain region.
Current wording
In 2024, we connected one third-party natural gas processing plant in the Permian Basin to our system, and two third-party natural gas processing plants previously connected to our system were expanded, one in the Permian Basin and one in the Mid-Continent region.
Previous wording
(a) -Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates which resulted in an additional $9 million of adjusted EBITDA in 2023, and we have not restated prior periods. See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.
Current wording
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates, which resulted in an additional $9 million of adjusted EBITDA in 2023, and we have not restated prior periods.
Previous wording
•an increase of $12 million in optimization and marketing due primarily to higher earnings on sales of Purity NGLs held in inventory; offset by
Current wording
•a decrease of $9 million in optimization and marketing due primarily to lower earnings on sales of Purity NGLs held in inventory; offset by
Previous wording
•an increase of $32 million in earnings from unconsolidated affiliates due primarily to higher volumes delivered to the Overland Pass pipeline and the change in calculation methodology in 2023;
Current wording
•an increase of $31 million in adjusted EBITDA from unconsolidated affiliates due primarily to higher volumes delivered to the Overland Pass Pipeline.
Previous wording
(a) - Represents physical raw feed volumes for which we provide transportation and/or fractionation services.
Current wording
(a) - Represents physical raw feed volumes for which we provide transportation and/or fractionation services, and excludes EnLink, as EnLink operating statistics are not meaningful to full-year 2024 operating results.
Previous wording
(a) -Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates which resulted in an additional $42 million of adjusted EBITDA in 2023, and we have not restated prior periods. See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.
Current wording
(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates, which resulted in an additional $42 million of adjusted EBITDA in 2023, and we have not restated prior periods.
Previous wording
•an increase of $43 million in transportation and storage services due primarily to higher storage rates on renegotiated contracts, higher storage volumes related to completed projects and higher firm and interruptible transportation volumes; and
Current wording
•an increase of $75 million in transportation services due primarily to higher firm and interruptible rates;
Previous wording
Capital Projects - Our Refined Products and Crude segment invests in capital projects to transport, store and distribute Refined Products and crude oil primarily throughout the central United States. Our growth strategy is focused on expanding our core business and marketing presence.
Current wording
Capital Projects - Our Refined Products and Crude segment invests in capital projects to transport, store and distribute Refined Products and crude oil primarily throughout the central United States. Our growth strategy is focused on expanding our core business and marketing presence. See “Capital Projects” in the “Recent Developments” section for more information on our capital projects.
Previous wording
Selected Financial Results and Operating Information - The following tables set forth certain selected financial results and operating information for our Refined Products and Crude segment for the period subsequent to the closing of the Magellan Acquisition:
Current wording
Selected Financial Results and Operating Information - The following tables set forth certain selected financial results and operating information for our Refined Products and Crude segment for the periods indicated:
Previous wording
(b) - The year ended December 31, 2023, primarily includes transaction costs related to the Magellan Acquisition of $158 million, offset partially by interest income of $49 million and net gains of $41 million on extinguishment of debt related to open market repurchases.
Current wording
(c) - The year ended Dec. 31, 2024 includes transaction costs related primarily to the EnLink Acquisitions and Medallion Acquisition of $73 million, offset partially by interest income of $39 million. The year ended Dec. 31, 2023, includes transaction costs related to the Magellan Acquisition of $158 million, offset partially by interest income of $49 million and net gains of $41 million on extinguishment of debt related to open market repurchases.
Previous wording
(d) - Includes segment adjusted EBITDA for the period September 25, 2023, through December 31, 2023.
Current wording
(e) - The year ended Dec. 31, 2023, includes segment adjusted EBITDA for the period Sept. 25, 2023, through Dec. 31, 2023.
Previous wording
See Note O of the Notes to Consolidated Financial Statements in this Annual Report for a discussion of environmental and legal matters.
Current wording
See Note P of the Notes to Consolidated Financial Statements in this Annual Report for a discussion of regulatory and legal matters.
Previous wording
General - Our primary sources of cash inflows are operating cash flows, proceeds from our commercial paper program and our $2.5 Billion Credit Agreement, debt issuances and the issuance of common stock for our liquidity and capital resources requirements.
Current wording
General - Our primary sources of cash inflows are operating cash flows, proceeds from our commercial paper program and our $3.5 Billion Credit Agreement, debt issuances and the issuance of common stock for our liquidity and capital resources requirements.
Previous wording
We expect our sources of cash inflows to provide sufficient resources to finance our operations, capital expenditures, quarterly cash dividends, maturities of long-term debt, share repurchases and contributions to unconsolidated affiliates. We believe we have sufficient liquidity due to our $2.5 Billion Credit Agreement, which expires in June 2027, and access to $1.0 billion available through our “at-the-market” equity program. As of the date of this report, no shares have been sold through our “at-the-market” equity program.
Current wording
We expect our sources of cash inflows to provide sufficient resources to finance our operations, capital expenditures, quarterly cash dividends, maturities of long-term debt, share repurchases and contributions to unconsolidated affiliates. We believe we have sufficient liquidity due to our $3.5 Billion Credit Agreement, which expires in February 2030, and access to $1.0 billion available through our “at-the-market” equity program. As of Feb. 17, 2025, no shares have been sold through our “at-the-market” equity program.
Previous wording
Cash Management - At December 31, 2023, we had $338 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
Cash Management - At Dec. 31, 2024, we had $733 million of cash and cash equivalents. For our wholly owned subsidiaries, we use a centralized cash management program that concentrates the cash assets of our wholly owned 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 -In December 2023, ONEOK assumed the debt obligations of Magellan under its previous debt indentures and Magellan provided a guarantee of the outstanding notes. As of December 31, 2023, Magellan no longer had debt obligations outstanding. We guarantee certain debt securities of ONEOK Partners, and ONEOK Partners, the Intermediate Partnership and Magellan guarantee certain of our debt securities. 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 this Annual Report.
Current wording
Guarantees - ONEOK, ONEOK Partners, the Intermediate Partnership and Magellan (Obligated Group) have cross guarantees in place for ONEOK’s and ONEOK Partners’ indebtedness. These 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.
Previous wording
Short-term Liquidity - Our principal sources of short-term liquidity consist of cash generated from operating activities, distributions received from our equity-method investments, proceeds from our commercial paper program and our $2.5 Billion Credit Agreement. As of December 31, 2023, we had no borrowings under our $2.5 Billion Credit Agreement and we are in compliance with all covenants.
Current wording
Short-term Liquidity - Our principal sources of short-term liquidity consist of cash generated from operating activities, distributions received from our unconsolidated affiliates, proceeds from our commercial paper program and our recently executed $3.5 Billion Credit Agreement. In February 2025, we amended and restated our $2.5 Billion Credit Agreement to increase the size to $3.5 billion, extend the term to February 2030 and make other non-material modifications. All other terms and conditions remain substantially the same. As of Feb. 17, 2025, we had no borrowings under our $3.5 Billion Credit Agreement, and we are in compliance with all covenants. Upon closing of the EnLink Acquisition on Jan. 31, 2025, the EnLink Revolving Credit Facility was terminated.
Previous wording
We had working capital (defined as current assets less current liabilities) deficits of $344 million and $503 million as of December 31, 2023, and December 31, 2022, respectively 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 repayments, 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
We had working capital (defined as current assets less current liabilities) deficits of $481 million and $344 million as of Dec. 31, 2024, and Dec. 31, 2023, respectively, 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.
Previous wording
For additional information on our $2.5 Billion Credit Agreement, see Note H of the Notes to Consolidated Financial Statements in this Annual Report.
Current wording
For additional information on our $3.5 Billion Credit Agreement, see Note H of the Notes to Consolidated Financial Statements in this Annual Report.
Previous wording
Debt Issuances -In August 2023, we completed an underwritten public offering of $5.25 billion senior unsecured notes consisting of $750 million, 5.55% senior notes due 2026; $750 million, 5.65% senior notes due 2028; $500 million, 5.80% senior notes due 2030; $1.5 billion, 6.05% senior notes due 2033; and $1.75 billion, 6.625% senior notes due 2053. The net proceeds, after deducting underwriting discounts, commissions and offering expenses, were $5.2 billion. The net proceeds were used to fund the cash consideration and other costs related to the Magellan Acquisition. In connection with the underwritten public offering, we terminated the undrawn commitment letter for the $5.25 billion unsecured 364-day bridge loan facility.
Current wording
Debt Issuances - In September 2024, we completed an underwritten public offering of $7.0 billion senior unsecured notes consisting of senior notes of the following tenors: $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. The net proceeds from this offering were used to fund the EnLink Controlling Interest Acquisition and the Medallion Acquisition, purchase additional interests in a Medallion joint venture owned by a separate third party, to pay fees and expenses related to the acquisitions and to repay outstanding indebtedness.
Previous wording
Equity Issuances -On September 25, 2023, we completed the Magellan Acquisition. Pursuant to the Merger Agreement, each common unit of Magellan was exchanged for a fixed ratio of 0.667 shares of ONEOK common stock and $25.00 of cash, for a total consideration of $14.1 billion. We issued approximately 135 million shares of common stock, with a fair value of approximately $9.0 billion as of the closing date of the Magellan Acquisition.
Current wording
Equity - On Jan. 31, 2025, we completed the EnLink Acquisition. Pursuant to the EnLink Merger Agreement, each common unit of EnLink was exchanged for a fixed ratio of 0.1412 shares of ONEOK Common stock, including EnLink Units that were exchanged for all previously outstanding Series B Preferred Units immediately prior to closing. We issued 41 million shares of common stock, with a fair value of $4.0 billion. There are no remaining Series B Preferred Units outstanding.
Previous wording
Share Repurchase Program - In January 2024, our Board of Directors authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock and targets the program to be largely utilized over the next four years. We expect shares to be acquired from time to time in open-market transactions or through privately negotiated transactions at our discretion, subject to market conditions and other factors. We expect any purchases to be funded by cash on hand, cash flow from operations and short-term borrowings. The program will terminate upon completion of the repurchase of $2.0 billion of common stock or on January 1, 2029, whichever occurs first. As of February 20, 2024, no shares have been repurchased under the program.
Current wording
Share Repurchase Program - In January 2024, our Board of Directors authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock. We expect shares to be acquired from time to time in open-market transactions or through privately negotiated transactions at our discretion, subject to market conditions and other factors. As of Feb. 17, 2025, we have repurchased 1.675 million shares for $172 million under the program with cash on hand. The program will terminate upon completion of the repurchase of $2.0 billion of common stock or on Jan. 1, 2029, whichever occurs first.
Previous wording
The following table sets forth our capital expenditures, excluding AFUDC, for the periods indicated:
Current wording
The following table sets forth our capital expenditures, excluding the equity portion of AFUDC, for the periods indicated:
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Capital expenditures increased 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 Annual Report for additional information on our capital projects.
Current report — wording carried from elsewhere
For additional information on our indebtedness, please see Note H of the Notes to Consolidated Financial Statements in this Annual Report.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Cash Flow Analysis for the Year Ended December 31, 2022 vs. 2021 - The cash flow analysis for the year ended December 31, 2022, compared with the year ended December 31, 2021, is included in Part II, Item 7, Management’s