ONEOK Announces 2025 Financial Guidance and Provides 2026 Growth Outlook
Higher 2025 Expectations Driven by Volume Growth, Completed Projects and Expanded Operations
TULSA, Okla., Feb. 24, 2025 /PRNewswire/ -- ONEOK, Inc. (NYSE: OKE) today announced 2025 financial guidance and provided a 2026 growth outlook.
2025 Financial Guidance:
-- Net income including noncontrolling interests midpoint of $3.45 billion,
an 11% increase year-over-year.
-- Net income excluding noncontrolling interests midpoint of $3.36 billion
(most of which is related to the EnLink acquisition closing on Jan. 31,
2025), an 11% increase year-over-year.
-- Earnings per diluted share midpoint of $5.37, an 8% increase
year-over-year, excluding one-time items in 2024, including
transaction-related costs and divestitures.
-- Adjusted EBITDA midpoint of $8.225 billion (excluding transaction
costs), a 21% increase year-over-year.
-- Approximately $2.8 billion to $3.2 billion in total capital
expenditures.
"Our 2025 financial guidance directly reflects our intentional and disciplined growth strategy, delivering value across our operations," said Pierce H. Norton II, ONEOK president and chief executive officer.
"Looking ahead to 2026, we are excited about our position in the midstream value chain," added Norton. "We expect continued volume growth across our systems from completed projects and continued execution on synergies from recent acquisitions, which will provide additional opportunities across our footprint, including our expanded presence in the Permian Basin and Gulf Coast region."
2026 Outlook:
ONEOK expects greater than 15% earnings per share growth and adjusted EBITDA growth approaching 10% in 2026, compared with 2025 guidance midpoints. The 2026 outlook is driven by expected volume growth from increased production and recently completed projects, and the continued realization of acquisition-related synergies.
Increased volumes on recently completed projects are primarily driven by a full-year contribution from the Elk Creek and West Texas NGL pipeline expansions, along with a partial-year benefit from the completion of the Denver-area refined products expansion.
2025 Financial Guidance:
ONEOK's 2025 net income and adjusted EBITDA guidance includes higher earnings in the Natural Gas Liquids, Refined Products and Crude, and Natural Gas Gathering and Processing segments driven by a full year of earnings from recent acquisitions, volume growth, completed projects and fee-based earnings, partially offset by higher expected operating costs primarily related to the growth of ONEOK's operations.
Financial guidance also includes approximately $250 million of incremental commercial and cost synergies related to acquisitions.
Capital Expenditures:
Total 2025 capital expenditures are expected to range between $2.8 billion to $3.2 billion. Key projects include ONEOK's Medford fractionator rebuild, Denver-area refined products expansion, the relocation of a natural gas processing plant to the Permian Basin from North Texas and the Texas City export terminal joint ventures. Additional capital for well connections across all basins, plant connections and synergy-related projects is also included.
2025 Guidance Tables:
2025 Guidance Range
(Millions of dollars, except
per share amounts)
ONEOK, Inc.
Net income $3,210 $3,690
Net income attributable to ONEOK $3,110 $3,610
Diluted earnings per common share $4.97 $5.77
Adjusted EBITDA (a) $8,000 $8,450
Growth capital expenditures $2,325 $2,675
Maintenance capital expenditures $475 $525
Adjusted EBITDA:
Natural Gas Liquids $2,970 $3,130
Refined Products and Crude $2,185 $2,305
Natural Gas Gathering and Processing $2,200 $2,320
Natural Gas Pipelines $655 $685
Other $(10) $10
(a) Adjusted EBITDA is a non-GAAP measure. A reconciliation to the relevant GAAP measure is included in this news release.
2025 Guidance Range
Summary of 2025 Volume Guidance
Natural gas liquids raw feed throughput (MBbl/d) 1,425 1,525
Refined products volume shipped (MBbl/d) 1,500 1,600
Crude oil volume shipped (MBbl/d) 1,900 2,100
Natural gas processed (MMcf/d) 5,420 6,160
Expected 2025 Performance Drivers:
Natural Gas Liquids
-- More than 10% increase in NGL raw feed throughput volumes primarily
driven by increasing production in the Rocky Mountain and Gulf
Coast/Permian regions and recently completed growth projects.
-- More than 90% fee-based earnings.
Refined Products and Crude
-- An increase in refined products demand across ONEOK's system.
-- Higher crude oil volumes driven by the addition of crude oil gathering
assets.
-- Approximately 90% fee-based earnings.
Natural Gas Gathering and Processing
-- Higher natural gas volumes processed driven by increasing production
primarily in the Rocky Mountain region and ONEOK's extension into the
Permian Basin and expansion in the Mid-Continent region.
-- Approximately 90% fee-based earnings.
Natural Gas Pipelines
-- More than 95% of transportation capacity contracted across Oklahoma and
Texas intrastate pipeline systems.
-- Louisiana natural gas system is expected to see continued favorable
transportation and storage rates.
-- Approximately 95% fee-based earnings.
Returning Value to Investors
-- Targeting an annual dividend growth rate ranging between 3% to 4%.
-- Combination of common dividends and share repurchases is expected to
trend towards a target of approximately 75% to 85% of forecasted cash
flow from operations after capital expenditures over the next three
years.
-- Target debt-to-EBITDA ratio of approximately 3.5 times in 2026.
ONEOK, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
2025
Guidance Range
(Unaudited)
(Millions of
dollars)
Reconciliation of net income to adjusted EBITDA
Net income $3,210 $3,690
Interest expense, net of capitalized interest 1,770 1,730
Depreciation and amortization 1,695 1,635
Income taxes 1,005 1,175
Adjusted EBITDA from unconsolidated affiliates 495 465
Equity in net earnings from investments (315) (345)
Noncash compensation expense and other 140 120
Other noncash items and equity AFUDC (20)
Adjusted EBITDA $8,000 $8,450
Reconciliation of segment adjusted EBITDA to adjusted EBITDA
Segment adjusted EBITDA:
Natural Gas Liquids $2,970 $3,130
Refined Products and Crude 2,185 2,305
Natural Gas Gathering and Processing 2,200 2,320
Natural Gas Pipelines 655 685
Other (10) 10
Adjusted EBITDA $8,000 $8,450
ONEOK Fourth Quarter and Year-end 2024 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.
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.
