ONEOK (OKE) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $780 million, or $1.33 per diluted share, up significantly year-over-year, driven by record Rocky Mountain region volumes, higher NGL and natural gas processing, and contributions from the Magellan acquisition.

• Adjusted EBITDA for Q2 2024 reached $1.62 billion, up from $981 million in Q2 2023, with strong segment growth and acquisition-related synergies.

• Completed the $280 million acquisition of NGL pipelines from Easton Energy, enhancing downstream value and accelerating synergies post-Magellan acquisition.

• Announced expansion of refined products pipeline to Denver, increasing system capacity by 35,000 bpd and supporting sustainable fuels growth.

• Affirmed full-year 2024 financial guidance, reflecting confidence in long-term growth, attractive returns, and favorable market fundamentals.

Financial highlights

• Q2 2024 net income was $780 million ($1.33 per share), up from $468 million in Q2 2023; adjusted EBITDA reached $1.62 billion, with segment contributions: NGLs $635M, Gathering & Processing $371M, Refined Products & Crude $467M, Natural Gas Pipelines $152M.

• Q2 2024 total revenues were $4.89 billion, up $1.16 billion year-over-year; operating income was $1.23 billion, up $492 million.

• Declared $0.99/share quarterly dividend ($3.96 annualized), up 3.7% year-over-year.

• Sale of non-strategic Kansas assets contributed a pre-tax net benefit of ~$50 million in the quarter.

• Capital expenditures for the first half of 2024 were $991 million, up from $594 million in 2023, driven by major NGL and pipeline projects.

Outlook and guidance

• 2024 adjusted EBITDA guidance midpoint is $6.175 billion, with a high end of $6.325 billion, and diluted EPS guidance range of $4.66–$5.17.

• Expect to meet or exceed $175 million in 2024 cost and commercial synergies, with $125 million+ targeted for 2025.

• Guidance reaffirmed for volumes and capital projects, with major growth projects (MB-6 Fractionator, West Texas NGL Pipeline, Elk Creek Pipeline expansion) expected to complete by year-end 2024 or 1Q 2025.

• 2024 earnings expected to be over 85% fee-based, reducing exposure to commodity price volatility.

• Book income tax rate for 2024 expected at 24%.