ONEOK Announces Higher Fourth Quarter and Full-year 2024 Earnings
Completed Projects and Expanded Asset Base Provide a Platform For Growth
TULSA, Okla., Feb. 24, 2025 /PRNewswire/ -- ONEOK, Inc. (NYSE: OKE) today announced higher fourth quarter and full-year 2024 results.
Higher Fourth-quarter 2024 Results, Compared With Fourth Quarter 2023:
-- Net income including noncontrolling interests of $1.0 billion.
-- Net income excluding noncontrolling interests of $923 million (most of
which is related to the EnLink acquisition closing on Jan. 31, 2025),
resulting in $1.57 per diluted share.
-- Adjusted EBITDA of $2.17 billion.
-- 3% increase in Rocky Mountain region NGL raw feed throughput volumes.
-- 4% increase in crude oil volume shipped.
-- 11% increase in total wells connected.
Higher Full-year 2024 Results, Compared with Full Year 2023:
-- Net income including noncontrolling interests of $3.1 billion.
-- Net income excluding noncontrolling interests of $3.0 billion (most of
which is related to the EnLink acquisition closing on Jan. 31, 2025),
resulting in $5.17 per diluted share.
-- Adjusted EBITDA of $6.78 billion.
-- 8% increase in Rocky Mountain region NGL raw feed throughput volumes.
-- 6% increase in Rocky Mountain region natural gas volumes processed.
"ONEOK's strong performance in 2024 was driven by contributions from multiple strategic acquisitions, volume growth and fee-based earnings," said Pierce H. Norton II, ONEOK president and chief executive officer.
"Over the past two years, strategic acquisitions and steady organic growth have transformed ONEOK into an even more geographically diversified and integrated midstream infrastructure company," added Norton. "Our disciplined and intentional growth strategy continues with our current slate of projects, including the recently announced LPG export terminal joint venture. These strategic investments align with ONEOK's capital allocation strategy, further positioning the company for long-term growth and delivering value to shareholders."
HIGHLIGHTS:
-- Returning value to shareholders:
-- In January 2025, ONEOK increased its quarterly dividend 4% to $1.03
per share, or $4.12 per share annualized.
-- As of Feb. 17, 2025, ONEOK has repurchased 1.675 million shares of
common stock for $171.7 million under its $2 billion share
repurchase program.
-- In February 2025, ONEOK announced joint ventures to construct a
400,000-barrel per day (bpd) liquified petroleum gas (LPG) export
terminal in Texas City, Texas, and a pipeline connecting ONEOK's Mont
Belvieu storage facility to the new terminal.
-- Recently completed capital-growth projects:
-- In December 2024, ONEOK completed construction of MB-6, a
125,000-bpd natural gas liquids (NGL) fractionator in Mont Belvieu,
Texas.
-- In December 2024, ONEOK completed the full looping of the West Texas
NGL Pipeline system, expanding capacity to 515,000 bpd. Additional
pump stations are expected to be completed in mid-2025 and will
increase system capacity to 740,000 bpd.
-- In January 2025, ONEOK completed construction of the Elk Creek
pipeline expansion. The project will increase capacity to 575,000
bpd out of the Rocky Mountain region following the supply of full
power capability in mid-2025.
-- In October 2024, ONEOK completed the acquisition of Medallion Midstream
(Medallion).
-- In December 2024, ONEOK completed an interstate natural gas pipeline
divestiture for $1.2 billion.
-- In January 2025, ONEOK completed the acquisition of EnLink Midstream
(EnLink).
-- 2024 Environmental, Social and Governance (ESG) highlights:
-- ONEOK received an MSCI ESG Rating of AAA.
-- ONEOK's ESG Risk Rating, as assessed by Morningstar Sustainalytics,
was in the top 20% of the refiners and pipelines industry.
-- As of year-end 2024, ONEOK had achieved combined Scope 1 and Scope 2
emissions reductions totaling approximately 1.7 million metric tons
(MMT), or 77% toward the company's targeted 2.2 MMT 2030 reduction
target.
-- As of Dec. 31, 2024:
-- 3.6 times fourth-quarter 2024 annualized run-rate net debt-to-EBITDA
ratio.
-- No borrowings outstanding under ONEOK's $2.5 billion credit
agreement.
-- In February 2025, ONEOK amended and restated its credit agreement,
increasing the capacity to $3.5 billion and extending the expiration to
February 2030.
FOURTH QUARTER AND FULL-YEAR 2024 FINANCIAL HIGHLIGHTS
Three Months Ended Years Ended
Dec. 31, Dec. 31,
2024 2023 2024 2023
(Millions of dollars, except per share amounts)
Net income (a) (c) $1,000 $688 $3,112 $2,659
Net income attributable to ONEOK (a) (c) $923 $688 $3,035 $2,659
Diluted earnings per common share (a) (c) $1.57 $1.18 $5.17 $5.48
Adjusted EBITDA (b) (c) (d) $2,174 $1,514 $6,784 $5,243
Operating income (b) (c) $1,568 $1,099 $4,989 $4,072
Operating costs $776 $554 $2,496 $1,535
Depreciation and amortization $344 $260 $1,134 $769
Equity in net earnings from investments $183 $70 $439 $202
Maintenance capital $136 $139 $411 $277
Capital expenditures (includes maintenance) $562 $603 $2,021 $1,595
(a) Amounts for the three months and year ended Dec. 31, 2024, include pre-tax gains of $237 million and $286 million, respectively, related to non-strategic asset divestitures; interest income of $25 million and $39 million, respectively; and transaction costs of $56 million and $96 million, respectively, related to ONEOK's acquisitions; resulting in a net benefit of 27 cents and 30 cents per diluted share after tax, respectively.
(b) Amounts for the three months and year ended Dec. 31, 2024, include $237 million and $286 million, respectively, related to non-strategic asset divestitures; interest income of $25 million and $39 million, respectively; and transaction costs of $56 million and $73 million, respectively, related to ONEOK's acquisitions.
(c) The year ended Dec. 31, 2023, includes a benefit of $633 million related to the Medford incident, including a one-time insurance settlement gain of $779 million, offset partially by $146 million of third-party fractionation costs.
(d) Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) is a non-GAAP measure.
FULL-YEAR 2024 FINANCIAL PERFORMANCE
ONEOK reported full-year 2024 net income including noncontrolling interests and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) of $3.1 billion and $6.78 billion, respectively.
Higher 2024 results were driven primarily by a full year of earnings from the Refined Products and Crude segment, higher volumes in the Rocky Mountain region and the gain from the interstate pipeline divestiture. Results included increased operating costs due primarily to higher employee-related costs and higher outside services from the growth of ONEOK's operations.
Additionally, 2024 results included $373 million of adjusted EBITDA and $73 million of transaction costs from the EnLink and Medallion acquisitions.
BUSINESS SEGMENT RESULTS:
Natural Gas Liquids Segment
Three Months Ended Years Ended
Dec. 31, Dec. 31,
Natural Gas Liquids Segment 2024 2023 2024 2023
(Millions of dollars)
Adjusted EBITDA $696 $613 $2,543 $3,045
Capital expenditures $202 $323 $987 $818
The increase in fourth quarter 2024 adjusted EBITDA, compared with fourth quarter 2023, primarily reflects:
-- A $59 million increase due to adjusted EBITDA from EnLink;
-- A $34 million increase in optimization and marketing due primarily to
higher earnings on sales of purity NGLs held in inventory; and
-- A $21 million increase related to the Medford incident due to lower
third-party fractionation costs in the current quarter; offset by
-- A $19 million increase in operating costs due primarily to higher
property taxes, higher employee-related costs and planned asset
maintenance; and
-- A $16 million decrease in exchange services due primarily to the timing
of fractionating and marketing raw feed NGLs held in inventory.
The decrease in adjusted EBITDA for the full year 2024, compared with 2023, primarily reflects:
-- A $695 million decrease 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;
-- A $77 million increase in operating costs due primarily to planned asset
maintenance, higher employee-related costs and property taxes from the
growth of ONEOK's operations; and
-- A $9 million decrease in optimization and marketing due primarily to
lower earnings on sales of purity NGLs held in inventory; offset by
-- A $184 million increase 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;
-- A $59 million increase due to adjusted EBITDA from EnLink; and
-- A $31 million increase in adjusted EBITDA from unconsolidated affiliates
due primarily to higher volumes delivered to the Overland Pass Pipeline.
Refined Products and Crude Segment
Three Months Ended Years Ended
Dec. 31, Dec. 31,
Refined Products and Crude Segment 2024 2023 2024 2023
(a)
(Millions of dollars)
Adjusted EBITDA $603 $424 $1,892 $465
Capital expenditures $96 $51 $216 $52
(a) - Includes results subsequent to the Magellan acquisition beginning Sept. 25, 2023.
The increase in fourth quarter 2024 adjusted EBITDA, compared with fourth quarter 2023, primarily reflects:
-- A $98 million increase in adjusted EBITDA from unconsolidated affiliates
due primarily to higher earnings on BridgeTex Pipeline associated with
the non-recurring recognition of deferred revenue;
-- A $73 million increase due to adjusted EBITDA from Medallion and EnLink;
and
-- A $39 million increase in transportation and storage due primarily to
higher average refined products tariff rates; offset by
-- A $38 million increase in operating costs due primarily to higher
employee-related costs.
The increase in adjusted EBITDA for the full year 2024, compared with 2023, primarily reflects:
-- A $1,354 million increase due to a full year of operating results
following the Magellan acquisition, which includes a non-recurring
increase in adjusted EBITDA from unconsolidated affiliates of $88
million due primarily to BridgeTex Pipeline; and
-- A $73 million increase due to adjusted EBITDA from Medallion and EnLink.
Natural Gas Gathering and Processing Segment
Three Months Ended Years Ended
Dec. 31, Dec. 31,
Natural Gas Gathering and Processing Segment 2024 2023 2024 2023
(Millions of dollars)
Adjusted EBITDA $489 $323 $1,484 $1,244
Capital expenditures $173 $140 $492 $448
The increase in fourth quarter 2024 adjusted EBITDA, compared with fourth quarter 2023, primarily reflects:
-- A $200 million increase due to adjusted EBITDA from EnLink; and
-- A $10 million increase from the sale of certain non-strategic assets in
2024; offset by
-- A $25 million decrease due primarily to lower realized NGL prices, net
of hedging, and lower average fee rates, offset partially by higher
realized natural gas and condensate prices, net of hedging; and
-- A $17 million increase in operating costs due primarily to higher
employee-related costs and outside services due primarily to the growth
of ONEOK's operations.
The increase in adjusted EBITDA for the full year 2024, compared with 2023, primarily reflects:
-- A $200 million increase due to adjusted EBITDA from EnLink;
-- A $77 million increase from higher volumes due primarily to increased
production in the Rocky Mountain region; and
-- A $59 million increase from the sale of certain non-strategic assets in
2024, primarily in Kansas; offset by
-- A $54 million decrease 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
-- A $44 million increase in operating costs due primarily to higher
outside services, employee-related costs and materials and supplies
expense due primarily to the growth of ONEOK's operations.
Natural Gas Pipelines Segment
Three Months Ended Years Ended
Dec. 31, Dec. 31,
Natural Gas Pipelines Segment 2024 2023 2024 2023
(Millions of dollars)
Adjusted EBITDA $417 $132 $900 $559
Capital expenditures $71 $73 $258 $228
The increase in fourth quarter 2024 adjusted EBITDA, compared with fourth quarter 2023, primarily reflects:
-- A $227 million increase due to the interstate natural gas pipeline
divestiture;
-- A $41 million increase due to adjusted EBITDA from EnLink; and
-- A $19 million increase in transportation services due primarily to
higher firm rates and volumes.
The increase in adjusted EBITDA for the full year 2024, compared with 2023, primarily reflects:
-- A $227 million increase due to the interstate natural gas pipeline
divestiture;
-- A $75 million increase in transportation services due primarily to
higher firm and interruptible rates;
-- A $41 million increase due to adjusted EBITDA from EnLink; and
-- A $16 million increase in adjusted EBITDA from unconsolidated affiliates
due primarily to increased volumes on Northern Border Pipeline; offset
by
-- A $19 million increase in operating costs due primarily to planned asset
maintenance and employee-related costs.
EARNINGS CONFERENCE CALL AND WEBCAST:
Members of ONEOK's management team will participate in a conference call at 11 a.m. Eastern (10 a.m. Central) on Feb. 25, 2025. The call also will be carried live on ONEOK's website.
To participate in the conference call, dial 877-883-0383, entry number 0386035, or log on to www.oneok.com.
If you are unable to participate in the conference call or the webcast, the replay will be available on ONEOK's website, www.oneok.com, for one year. A recording will be available by phone for seven days. The playback call may be accessed at 877-344-7529, access code 5294827.
LINK TO EARNINGS TABLES AND PRESENTATION:
https://ir.oneok.com/financial-information/financial-reports
NON-GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL MEASURES:
ONEOK has disclosed in this news release adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), a non-GAAP financial metric used to measure the company's 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 other noncash items; and includes adjusted EBITDA from the company's unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings of unconsolidated affiliates. Adjusted EBITDA from 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.
Adjusted EBITDA is useful to investors because it and similar measures are used by many companies in the industry as a measure of financial performance and is commonly employed by financial analysts and others to evaluate ONEOK's financial performance and to compare the company's financial performance with the performance of other companies within the industry. Adjusted EBITDA should not be considered in isolation or as a substitute for net income or any other measure of financial performance presented in accordance with GAAP.
This non-GAAP financial measure excludes some, but not all, items that affect net income. Additionally, this calculation may not be comparable with similarly titled measures of other companies. A reconciliation of net income to adjusted EBITDA is included in the tables.
This news release includes or references certain forward-looking, non-GAAP financial measures. Because ONEOK provides these measures on a forward-looking basis, it can not reasonably predict certain of the necessary components of the most directly comparable forward- looking GAAP financial measures, such as future depreciation, EBITDA from unconsolidated affiliates and other noncash items. Accordingly, ONEOK is unable to present a quantitative reconciliation of such forward-looking, non-GAAP financial measures to the respective most directly comparable forward-looking GAAP financial measure. ONEOK believes that these forward-looking, non-GAAP measures may be a useful tool for the investment community in comparing ONEOK's forecasted financial performance to the forecasted financial performance of other companies in the industry.
At ONEOK (NYSE: OKE), we deliver energy products and services vital to an advancing world. We are a leading midstream operator that provides gathering, processing, fractionation, transportation and storage services. Through our approximately 60,000-mile pipeline network, we transport the natural gas, natural gas liquids (NGLs), refined products and crude oil that help meet domestic and international energy demand, contribute to energy security and provide safe, reliable and responsible energy solutions needed today and into the future. As one of the largest diversified energy infrastructure companies in North America, ONEOK is delivering energy that makes a difference in the lives of people in the U.S. and around the world.
ONEOK is an S&P 500 company headquartered in Tulsa, Oklahoma.
For information about ONEOK, visit the website: www.oneok.com.
For the latest news about ONEOK, find us on LinkedIn, Facebook, X and Instagram.
This news release contains certain "forward-looking statements" within the meaning of federal securities laws. Words such as "anticipates," "believes," "continues," "could," "estimates," "expects," "forecasts," "goal," "guidance," "intends," "may," "might," "outlook," "plans," "potential," "projects," "scheduled," "should," "target," "will," "would," and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect our current views about future events. Such forward-looking statements include, but are not limited to, future financial and operating results, our plans, objectives, expectations and intentions, and other statements that are not historical facts, including future results of operations, projected cash flow and liquidity, business strategy, expected synergies or cost savings, and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this news release will occur as projected and actual results may differ materially from those projected.
Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties, many of which are beyond our control, and are not guarantees of future results. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward- looking statements. These risks and uncertainties include, without limitation, the following:
-- the impact on drilling and production by factors beyond our control,
including the demand for natural gas, NGLs, Refined Products and crude
oil; producers' desire and ability to drill and obtain necessary
permits; regulatory compliance; reserve performance; and capacity
constraints and/or shut downs on the pipelines that transport crude oil,
natural gas, NGLs, and Refined Products from producing areas and our
facilities;
-- the impact of unfavorable economic and market conditions, inflationary
pressures, including increased interest rates, which may increase our
capital expenditures and operating costs, raise the cost of capital or
depress economic growth;
-- the impact of the volatility of natural gas, NGL, Refined Products and
crude oil prices on our earnings and cash flows, which is impacted by a
variety of factors beyond our control, including international terrorism
and conflicts and geopolitical instability;
-- our dependence on producers, gathering systems, refineries and pipelines
owned and operated by others and the impact of any closures,
interruptions or reduced activity levels at these facilities;
-- the impact of increased attention to ESG issues, including climate
change, and risks associated with the physical and financial impacts of
climate change;
-- risks associated with operational hazards and unforeseen interruptions
at our operations;
-- the inability of insurance proceeds to cover all liabilities or incurred
costs and losses, or lost earnings, resulting from a loss;
-- the risk of increased costs for insurance premiums or less favorable
coverage;
-- demand for our services and products in the proximity of our facilities;
-- risks associated with our ability to hedge against commodity price risks
or interest rate risks;
-- a breach of information security, including a cybersecurity attack, or
failure of one or more key information technology or operational
systems;
-- exposure to construction risk and supply risks if adequate natural gas,
NGL, Refined Products and crude oil supply is unavailable upon
completion of facilities;
-- the accuracy of estimates of hydrocarbon reserves, which could result in
lower than anticipated volumes;
-- our lack of ownership over all of the land on which our property is
located and certain of our facilities and equipment;
-- the impact of changes in estimation, type of commodity and other factors
on our measurement adjustments;
-- excess capacity on our pipelines, processing, fractionation, terminal
and storage assets;
-- risks associated with the period of time our assets have been in
service;
-- our partial reliance on cash distributions from our unconsolidated
affiliates on our operating cash flows;
-- our ability to cause our joint ventures to take or not take certain
actions unless some or all of our joint-venture participants agree;
-- our reliance on others to operate certain joint-venture assets and to
provide other services;
-- increased regulation of exploration and production activities, including
hydraulic fracturing, well setbacks and disposal of wastewater;
-- impacts of regulatory oversight and potential penalties on our business;
-- risks associated with the rate regulation, challenges or changes, which
may reduce the amount of cash we generate;
-- the impact of our gas liquids blending activities, which subject us to
federal regulations that govern renewable fuel requirements in the U.S.;
-- incurrence of significant costs to comply with the regulation of
greenhouse gas emissions;
-- the impact of federal and state laws and regulations relating to the
protection of the environment, public health and safety on our
operations, as well as increased litigation and activism challenging oil
and gas development as well as changes to and/or increased penalties
from the enforcement of laws, regulations and policies;
-- the impact of unforeseen changes in interest rates, debt and equity
markets and other external factors over which we have no control;
-- actions by rating agencies concerning our credit;
-- our indebtedness and guarantee obligations could cause adverse
consequences, including making us vulnerable to general adverse economic
and industry conditions, limiting our ability to borrow additional funds
and placing us at competitive disadvantages compared with our
competitors that have less debt;
-- an event of default may require us to offer to repurchase certain of our
or ONEOK Partners' senior notes or may impair our ability to access
capital;
-- the right to receive payments on our outstanding debt securities and
subsidiary guarantees is unsecured and effectively subordinated to any
future secured indebtedness and any existing and future indebtedness of
our subsidiaries that do not guarantee the senior notes;
-- use by a court of fraudulent conveyance to avoid or subordinate the
cross guarantees of our or ONEOK Partners' indebtedness;
-- the risks associated with pending or possible acquisitions and
dispositions, including our ability to finance or integrate any such
acquisitions and any regulatory delay or conditions imposed by
regulatory bodies in connection with any such acquisitions and
dispositions;
-- our ability to pay dividends;
-- our exposure to the credit risk of our customers or counterparties;
-- a shortage of skilled labor;
-- misconduct or other improper activities engaged in by our employees;
-- the impact of potential impairment charges;
-- the impact of the changing cost of providing pension and health care
benefits, including postretirement health care benefits, to eligible
employees and qualified retirees;
-- our ability to maintain an effective system of internal controls; and
-- disruptions to our business due to acquisitions and other significant
transactions, including the EnLink Acquisition and the Medallion
Acquisition;
-- the risk that our, EnLink's and Medallion's businesses will not be
integrated successfully;
-- the risk that cost savings, synergies and growth from the EnLink
Acquisition and the Medallion Acquisition may not be fully realized or
may take longer to realize than expected; and
-- the risk factors listed in the reports we have filed and may file with
the SEC.
These reports are also available from the sources described below. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. ONEOK undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or changes in circumstances, expectations or otherwise.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the Risk Factors included in the most recent reports on Form 10-K and Form 10-Q and other documents of ONEOK on file with the SEC. ONEOK's SEC filings are available publicly on the SEC's website at www.sec.gov.
Analyst Contact: Megan Patterson
918-561-5325
Media Contact: Brad Borror
918-588-7582
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SOURCE ONEOK, Inc.
