• Net Income: $923 million or $1.57 per share in Q4 2024; $3 billion or $5.17 per share for the full year 2024.
• Adjusted EBITDA: Nearly $2.2 billion in Q4 2024; more than $6.7 billion for the full year 2024.
• Cash on Hand: Over $730 million as of December 31, 2024.
• Net Debt-to-EBITDA Ratio: 3.6 times annualized run rate for Q4 2024.
• Shareholder Returns: Nearly $2.5 billion returned through dividends and share repurchases in 2024; $172 million of stock repurchased in Q4 2024.
• Dividend Increase: 4% increase in quarterly dividend in January 2025.
• 2025 EPS Guidance: 8% increase to a midpoint of $5.37, excluding one-time items from 2024.
• 2025 Adjusted EBITDA Guidance: 21% increase to $8.225 billion, excluding $50 million of transaction costs.
• 2025 Capital Expenditures: $2.8 billion to $3.2 billion range, including growth and maintenance capital.
• 2026 Outlook: Greater than 15% EPS growth and adjusted EBITDA growth approaching 10% compared to 2025 guidance midpoint.
• NGL Raw Feed Throughput Volumes: Up 8% in 2024.
• Natural Gas Volumes Processed: Up 6% in the Rocky Mountain region in 2024.
• Natural Gas Gathering and Processing Volume Growth: 8.5% increase in the Rocky Mountain region expected in 2025.

• Warning! GuruFocus has detected 7 Warning Signs with OKE.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ONEOK Inc (NYSE:OKE) reported higher fourth quarter and full year 2024 earnings driven by strategic acquisitions, volume growth, and execution on synergies.
• The company expects strong earnings growth in 2025, driven by expanded operations, completed projects, and higher volumes.
• ONEOK Inc (NYSE:OKE) has significantly grown its integrated operations, enhancing geographic diversity and product mix.
• The company has added significant operational scale with a 60,000-mile pipeline network, strengthening resilience across market cycles.
• ONEOK Inc (NYSE:OKE) remains committed to returning value to investors through sustained dividend growth and a $2 billion share repurchase program.

Negative Points

• The company faces potential challenges in achieving projected synergies and growth targets, which are dependent on successful integration of acquisitions.
• There is concern about potential overbuilding in the LPG export market, which could impact future spot rates and project economics.
• ONEOK Inc (NYSE:OKE) has a high capital expenditure plan for 2025, which may strain financial resources if not managed effectively.
• The companys growth projections are heavily reliant on favorable market conditions and increased production, which may not materialize as expected.
• ONEOK Inc (NYSE:OKE) must navigate potential risks associated with its strategic acquisitions, including operational integration and market competition.

Q & A Highlights

Q: Can you provide additional details on bridging the 2025 to 2026 guidance, particularly regarding synergies and assumptions on volume and pricing? A: Walter Hulse, CFO, explained that the synergy capital primarily involves connecting the Easton assets to Mont Belvieu and the Houston channel, which should be completed in 2025. This will contribute to the 2026 benefits, alongside other projects wrapping up in late 2025 or early 2026.

Q: Could you elaborate on the strategic benefits of the LPG export JV with MPLX and the competitive edge it offers? A: Sheridan Swords, SVP, highlighted the strategic location of the LPG dock, which offers open water access and proximity to Marathon's refinery, reducing costs. The project is expandable beyond 400,000 barrels per day, aligning with ONEOK's wellhead-to-water strategy.

Q: With LPG ports potentially being overbuilt, what are your assumptions for uncontracted rates, and how do they impact your projections? A: Sheridan Swords noted that the LPG dock is expected to be operational by 2028, with significant LPG volumes anticipated from the Permian. ONEOK controls a substantial portion of these volumes, and the company assumes typical market rates for spot volumes in its projections.

Q: How does the 2025 CapEx guide break down between larger projects and smaller capital opportunities? A: Walter Hulse detailed that major projects include the Medford frac, Denver pipeline, and North Texas plant relocation. Smaller capital projects focus on synergies and system optimizations, providing high returns and enhancing efficiency.

Q: What drives the potential for reaching the top end of the 2025 guidance for the natural gas liquids and refined products segments? A: Walter Hulse mentioned that timing of synergy realization and increased producer activity could drive higher earnings. The team's innovation in optimizing smaller synergies also contributes to potential upside.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.