ONEOK(OKE)2025-02-25 19:32Financial Data and Key Metrics Changes - Net income attributable to ONEOK for Q4 2024 was $923 million, or $1.57 per share, and for the full year, it totaled $3 billion, or $5.17 per share [19] - Adjusted EBITDA for Q4 2024 was nearly $2.2 billion, with a full-year total exceeding $6.7 billion [19] - The annualized run rate net debt-to-EBITDA ratio for Q4 2024 was 3.6x, with over $730 million in cash on hand and no outstanding borrowings [20] Business Line Data and Key Metrics Changes - The refined products and crude segment contributed its first full year of earnings, benefiting from higher average refined product tariff rates and increased long-haul crude oil pipeline earnings [26] - NGL raw feed throughput volumes increased by 8%, and natural gas volumes processed rose by 6% in the Rocky Mountain region [27] - The Natural Gas Pipeline segment exceeded its 2024 financial guidance, driven by strong demand for intrastate pipeline and storage services [27] Market Data and Key Metrics Changes - In the Permian Basin, the company expects higher year-over-year adjusted EBITDA and raw feed throughput volumes, primarily driven by growth in production [28] - The company anticipates natural gas processing volumes in the Permian Basin to average approximately 1.6 Bcf per day [38] - The company is positioned to benefit from industrial demand growth driven by data centers, LNG exports, and ammonia facilities [39] Company Strategy and Development Direction - ONEOK has executed a disciplined growth strategy, enhancing its regional diversification and integrated operations [10] - Key projects include NGL pipeline expansions in the Bakken and Permian Basins, and a joint venture for an LPG export project [13][32] - The company remains committed to returning value to shareholders through sustained dividends and share repurchases [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong earnings growth for 2025, driven by expanded operations and higher volumes [9] - The 2026 growth outlook includes expectations for over 15% earnings per share growth and adjusted EBITDA growth approaching 10% [24] - Management highlighted the importance of safety and customer service in maintaining operational resilience [42] Other Important Information - The company has provided 11 consecutive years of adjusted EBITDA growth, with 2025 adjusted EBITDA guidance more than double that of three years ago [16] - The company announced a 4% increase in its quarterly dividend in January 2025 [20] Q&A Session Summary Question: Additional details on bridging 2025 to 2026 guidance - Management indicated that synergy capital from connecting Easton assets will contribute to benefits in 2026 [47] Question: Strategic benefits of the LPG export JV with MPLX - The strategic rationale includes location advantages and reduced costs due to proximity to existing infrastructure [52][54] Question: Assumptions for uncontracted rates for the LPG dock - Management does not share the view that docks will be overbuilt and has assumed typical market rates for spot volumes in their economics [61] Question: Update on commercial development for power plant expansion projects - Management noted that they are in discussions with various projects, with a focus on capturing demand from data centers [75][76] Question: Directional guidance for 2026 CapEx - Management expects a peak in 2025 CapEx, with a higher baseline moving forward due to recent acquisitions [80] Question: Synergies tracking for Magellan and EnLink - Management confirmed that they exceeded original synergy targets and expect additional synergies in 2025 [84] Question: Opportunities from Medallion and EnLink acquisitions - Management highlighted positive surprises in operational synergies and increased efficiency in connecting systems [92] Question: Expected returns on the LPG export project - Expected returns are projected in the mid-teens to high-teens, emphasizing the integrated strategy [103] Question: M&A strategy in the Permian - Management remains focused on integration and realizing synergies from recent acquisitions before pursuing new M&A opportunities [106]