ONEOK(OKE) - 2025 Q2 - Quarterly Results

Financial and Operational Highlights ONEOK reported strong Q2 2025 results, driven by strategic acquisitions, with significant growth in net income and adjusted EBITDA, affirming full-year guidance - ONEOK's President and CEO, Pierce H. Norton II, attributed the higher second-quarter performance to the company's integrated business model, sustained demand for its energy services, and tangible benefits from strategic acquisitions[3] - The company affirmed its full-year 2025 financial guidance ranges[2] Q2 2025 Financial Performance Summary ONEOK's Q2 2025 net income reached $841 million and Adjusted EBITDA grew to $1.98 billion, reflecting acquisition impacts Q2 & H1 2025 Financial Highlights (vs. 2024) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to ONEOK | $841M | $780M | $1,477M | $1,419M | | Diluted EPS | $1.34 | $1.33 | $2.38 | $2.42 | | Adjusted EBITDA | $1,981M | $1,624M | $3,756M | $3,065M | | Operating Income | $1,431M | $1,229M | $2,651M | $2,293M | | Capital Expenditures | $749M | $479M | $1,378M | $991M | - Q2 2025 results included a pretax impact of $22 million in transaction costs, primarily from the EnLink acquisition, which reduced diluted EPS by 3 cents[5] - The Rocky Mountain region experienced an 11% increase in NGL raw feed throughput volumes compared to Q2 2024[4] Key Corporate and Sustainability Highlights ONEOK completed strategic acquisitions, repaid senior notes, declared a dividend, and achieved top ESG ratings - Key strategic transactions include: - Acquired remaining 49.9% interest in Delaware G&P LLC (May 2025)- Acquired an additional 30% interest in BridgeTex Pipeline Company, LLC, reaching 60% ownership (July 2025)[7] - The company strengthened its balance sheet by repurchasing $169 million of senior notes in May and repaying $422 million of senior notes at maturity in June 2025[7] - A quarterly dividend of $1.03 per share was declared in July 2025[7] - Received an MSCI ESG Rating of AAA in May 2025 and was included in the FTSE4Good Index in June 2025, highlighting sustainability achievements[7] Business Segment Performance All four ONEOK business segments reported Q2 2025 adjusted EBITDA growth, primarily driven by EnLink and Medallion acquisitions - Overall Q2 2025 results were driven primarily by the Positive impact of the EnLink and Medallion acquisitions across ONEOK's system[8] Natural Gas Liquids Segment NGL segment adjusted EBITDA increased to $673 million in Q2 2025, primarily from the EnLink acquisition, partially offset by lower exchange services NGL Segment Financials (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $673M | $635M | | Capital Expenditures | $135M | $285M | - Key drivers for the Q2 YoY increase in adjusted EBITDA were: - Positive: +$50 million from EnLink acquisition- Negative: -$11 million in exchange services due to lower average fee rates and higher NGL inventory[11] Refined Products and Crude Segment Refined Products and Crude segment adjusted EBITDA grew to $557 million in Q2 2025, driven by acquisitions and lower operating costs Refined Products and Crude Segment Financials (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $557M | $467M | | Capital Expenditures | $184M | $33M | - Key drivers for the Q2 YoY increase in adjusted EBITDA were: - Positive: +$89 million from Medallion and EnLink acquisitions- Positive: +$21 million from lower operating costs[14] Natural Gas Gathering and Processing Segment Natural Gas G&P segment adjusted EBITDA significantly increased to $540 million in Q2 2025, driven by EnLink acquisition and higher volumes Natural Gas G&P Segment Financials (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $540M | $371M | | Capital Expenditures | $341M | $101M | - Key drivers for the Q2 YoY increase in adjusted EBITDA were: - Positive: +$240 million from EnLink acquisition- Positive: +$18 million from higher volumes- Negative: -$59 million from the divestiture of non-strategic assets in 2024- Negative: -$33 million from lower realized NGL prices, net of hedging[17] Natural Gas Pipelines Segment Natural Gas Pipelines segment adjusted EBITDA rose to $188 million in Q2 2025, driven by the EnLink acquisition, offset by divestitures Natural Gas Pipelines Segment Financials (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $188M | $152M | | Capital Expenditures | $52M | $52M | - The Q2 YoY increase in adjusted EBITDA was primarily driven by a $69 million contribution from the EnLink acquisition, offset by a $31 million decrease from an interstate natural gas pipeline divestiture[18] Consolidated Financial Statements Consolidated financial statements detail ONEOK's Q2 2025 performance, showing higher revenues, net income, asset growth, and strong operating cash flow Consolidated Statements of Income ONEOK reported Q2 2025 total revenues of $7.89 billion, operating income of $1.43 billion, and net income of $841 million Consolidated Income Statement Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $7,887M | $4,894M | | Operating Income | $1,431M | $1,229M | | Net Income Attributable to ONEOK | $841M | $780M | | Diluted EPS | $1.34 | $1.33 | Consolidated Balance Sheets As of June 30, 2025, ONEOK's total assets reached $64.5 billion, with liabilities at $42.6 billion and equity at $21.8 billion Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $3,896M | $4,238M | | Net Property, Plant and Equipment | $46,715M | $45,935M | | Total Assets | $64,524M | $64,069M | | Total Current Liabilities | $6,646M | $4,719M | | Long-Term Debt | $29,625M | $31,018M | | Total ONEOK Shareholders' Equity | $21,830M | $17,036M | | Total Liabilities and Equity | $64,524M | $64,069M | Consolidated Statements of Cash Flows For H1 2025, net cash from operations was $2.43 billion, supporting investing and financing activities, including debt repayment and dividends Consolidated Cash Flow Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $2,429M | $2,026M | | Cash used in investing activities | ($1,508M) | ($1,334M) | | Cash used in financing activities | ($1,557M) | ($994M) | | Change in cash and cash equivalents | ($636M) | ($302M) | | Cash and cash equivalents at end of period | $97M | $36M | Supplemental Information This section provides supplemental details, including operating statistics, Adjusted EBITDA reconciliation, and forward-looking statement disclosures Segment Operating Statistics Key Q2 2025 operational metrics showed significant year-over-year volume growth in natural gas processed, crude oil shipped, and NGL raw feed throughput, largely due to acquisitions Key Operating Volumes (Q2 2025 vs Q2 2024) | Segment & Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Natural Gas Liquids | | | | Raw feed throughput (MBbl/d) | 1,527 | 1,365 | | Refined Products and Crude | | | | Crude oil volume shipped (MBbl/d) | 1,782 | 731 | | Natural Gas Gathering and Processing | | | | Natural gas processed (MMcf/d) | 5,573 | 2,326 | Reconciliation of Non-GAAP Financial Measures ONEOK provides a reconciliation of net income to Adjusted EBITDA, showing Q2 2025 net income of $853 million reconciled to $1.981 billion - Adjusted EBITDA is a non-GAAP measure defined as net income adjusted for interest, taxes, depreciation, amortization, and other noncash items. It is used by the company and analysts to evaluate financial performance[21][22] Reconciliation of Net Income to Adjusted EBITDA (Q2 2025) | Reconciliation Item | Amount (Millions) | | :--- | :--- | | Net Income | $853 | | Interest expense, net | $438 | | Depreciation and amortization | $368 | | Income taxes | $260 | | Adjusted EBITDA from unconsolidated affiliates | $113 | | Equity in net earnings from investments | ($81) | | Noncash compensation expense and other | $30 | | Adjusted EBITDA | $1,981 | Forward-Looking Statements and Risk Factors This release contains forward-looking statements subject to risks, including commodity price volatility, regulatory changes, operational hazards, and acquisition integration - The earnings release contains forward-looking statements that are not guarantees of future results and are subject to risks and uncertainties that could cause actual results to differ materially[28][29] - Key risk factors include: - Demand for natural gas, NGLs, and crude oil- Volatility of commodity prices- Increased attention to ESG issues and climate change- Risks associated with integrating acquisitions like EnLink and Medallion- Regulatory oversight and changes in environmental laws[30][33]