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ACQUISITIONS AND DIVESTITURES | 12 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES EnLink Controlling Interest Acquisition - On Oct. 15, 2024, we completed the EnLink Controlling Interest Acquisition, acquiring GIP’s interest in EnLink consisting of approximately 43% of the outstanding EnLink Units for $14.90 in cash per unit and 100% of the outstanding limited liability company interests in the managing member of EnLink for $300 million, for total cash consideration of $3.3 billion. Through our 100% ownership of the managing member of EnLink, we obtained control of EnLink. We used a portion of the proceeds from our September 2024 underwritten public offering of $7.0 billion senior unsecured notes to fund this acquisition. For additional information on our long-term debt, see Note H. EnLink’s operations are principally composed of providing midstream services relating to natural gas, NGLs and crude oil. The assets of EnLink include approximately 14,000 miles of pipeline and rights of way, natural gas processing plants with approximately 3.9 Bcf/d of processing capacity, NGL fractionators with approximately 235 MBbl/d of operating capacity, barge and rail terminals, product storage facilities, including natural gas storage, purchasing and marketing capabilities and equity investments in certain joint ventures. EnLink’s operations are now reported across all four of our existing operating segments, allocated by the nature of the commodities and services provided. This acquisition meaningfully increases our scale and integrated value chain within the growing Permian Basin while expanding and extending our asset bases in the Mid-Continent, North Texas and Louisiana regions. We accounted for this acquisition using the acquisition method of accounting for business combinations pursuant to Accounting Standards Codification 805, “Business Combinations,” which requires, among other things, assets acquired and liabilities assumed to be recorded at their fair value on the acquisition date. Any excess of consideration to be transferred over the estimated fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining the fair value of acquired assets and liabilities assumed requires management to make estimates, assumptions and judgments, and in some cases, management may also utilize third-party specialists to assist and advise on those estimates. The purchase price allocation presented below is substantially complete. However, management continues to refine the preliminary valuation of certain assets acquired and liabilities assumed, such as working capital liabilities and long-lived assets, and may adjust the allocation in subsequent periods. The final valuation will be completed as we obtain the information necessary to complete the analysis, but no later than one year from the acquisition date. The following tables set forth the acquisition consideration and preliminary purchase price allocation of assets acquired and liabilities assumed:
| At Oct. 15, 2024
| (Millions of dollars and units, except per unit data)
EnLink Units outstanding |
43% of EnLink Units outstanding | 200.3 |
Cash consideration per EnLink unit | $14.90
Cash consideration for EnLink Units | $ | 2,985 |
100% of the outstanding liability company interests in the managing member of EnLink | 300 |
Total cash consideration | $ | 3,285 |
| At Oct. 15, 2024
Assets acquired: | (Millions of dollars)
Cash and cash equivalents | $ | 446 |
Accounts receivables, net | 548 |
Inventories | 87 |
Other current assets | 38 |
Property, plant and equipment | 11,396 |
Investments in unconsolidated affiliates | 342 |
Intangible assets | 1,051 |
Other assets | 131 |
Total assets acquired | 14,039 |
Liabilities assumed: |
Current maturities of long-term debt | 756 |
Accounts payable | 465 |
Other current liabilities (a) | 525 |
Long-term debt, excluding current maturities | 4,577 |
Deferred income taxes | 1,988
Other deferred credits and liabilities | 84
Total liabilities assumed | 8,395
Noncontrolling interests | 5,076
Total identifiable net assets | 568 |
Goodwill | 2,717 |
Total purchase price | $ | 3,285 |
(a) - Includes obligation to repay Series C Preferred Units. See Note I. Property, plant and equipment: Property, plant and equipment consists primarily of pipeline and rights of way, pipeline-related equipment and processing plant and fractionators and will be depreciated on a straight-line basis over the estimated useful lives of the assets. Intangible assets: The preliminary value of net identifiable intangible assets relates to customer relationships that will be amortized over the period of expected benefit. Long-term debt, excluding current maturities: We utilized publicly traded prices to estimate the fair value. The debt comprises senior unsecured obligations with varying maturities and interest rates as outlined in Note H. Recognizing the debt at its acquisition date fair value resulted in a discount from the notional value. The discount was immaterial and will be amortized into interest expense over the remaining life of the debt. Deferred income taxes: The EnLink Controlling Interest Acquisition resulted in a difference between the carrying value of the underlying assets acquired and the carryover tax basis of assets, which resulted in a deferred tax liability recorded as part of the purchase price allocation. Goodwill: We established deferred income tax liabilities resulting from carryover tax basis, which increased goodwill. The remainder of the goodwill balance primarily represents commercial synergies. Goodwill will not be deductible for tax purposes. For additional information on goodwill, see Note G. Noncontrolling interest: Represents the approximately 57% of EnLink Units not acquired in the EnLink Controlling Interest Acquisition, valued at the acquisition date closing price of EnLink, the Series B Preferred Units and partially owned consolidated subsidiaries. Results of operations: The results of operations attributable to the EnLink Controlling Interest Acquisition have been included in our Consolidated Financial Statements since the date of acquisition through Dec. 31, 2024. Revenue and income before income taxes attributable to the net assets acquired for the period Oct. 15, 2024, through Dec. 31, 2024, were $1.5 billion and $173 million, respectively. Subsequent event - On Jan. 31, 2025, we completed the EnLink Acquisition. Pursuant to the EnLink Merger Agreement, we acquired all of the EnLink outstanding publicly held common units in a fixed ratio exchange of 0.1412 shares of ONEOK Common stock, including EnLink Units that were exchanged for all previously outstanding Series B Preferred Units immediately prior to closing. We issued 41 million shares of common stock, with a fair value of $4.0 billion. EnLink is now a wholly owned subsidiary. As we controlled EnLink prior to the EnLink Acquisition, the change in our ownership interest was accounted for as an equity transaction. Medallion Acquisition - On Oct. 31, 2024, we completed the Medallion Acquisition with GIP, acquiring all of the equity interests in Medallion for total cash consideration of $2.6 billion, inclusive of the purchase of additional interests in a Medallion joint venture owned by a separate third party. We used a portion of the proceeds from our September 2024 underwritten public offering of $7.0 billion senior unsecured notes to fund this acquisition. For additional information on our long-term debt, see Note H. This acquisition expands our midstream services for crude oil and condensate in West Texas, specifically the Midland Basin. The assets of Medallion include crude oil gathering and transportation pipelines and crude oil storage facilities. Medallion’s assets and operations are reported in our Refined Products and Crude segment. We accounted for this acquisition using the acquisition method of accounting for business combinations pursuant to Accounting Standards Codification 805, “Business Combinations,” which requires, among other things, assets acquired and liabilities assumed to be recorded at their fair value on the acquisition date. Any excess of consideration to be transferred over the estimated fair value of assets acquired and liabilities assumed will be recorded as goodwill. Determining the fair value of acquired assets and liabilities assumed requires management to make estimates, assumptions and judgments, and in some cases management may also utilize third-party specialists to assist and advise on those estimates. The purchase price allocation presented below is substantially complete. However, management continues to refine the preliminary valuation of certain assets acquired and liabilities assumed, such as working capital liabilities and long-lived assets, and may adjust the allocation in subsequent periods. The final valuation will be completed as we obtain the information necessary to complete the analysis, but no later than one year from the acquisition date. The following table sets forth the preliminary purchase price allocation of assets acquired and liabilities assumed:
| At Oct. 31, 2024
Assets acquired: | (Millions of dollars)
Cash and cash equivalents | $ | 36 |
Accounts receivables, net | 114 |
Inventories | 21 |
Other current assets | 2 |
Property, plant and equipment | 1,600 |
Intangible assets | 730 |
Other assets | 3 |
Total assets acquired | 2,506 |
Liabilities assumed: |
Accounts payable | 103 |
Other current liabilities | 5 |
Other deferred credits and liabilities | 40
Total liabilities assumed | 148
Total identifiable net assets | 2,358
Goodwill | 259 |
Total purchase price | $ | 2,617 |
Property, plant and equipment: Property, plant and equipment consists primarily of pipeline and pump station equipment and will be depreciated on a straight-line basis over the estimated useful lives of the assets. Intangible assets: The preliminary value of net identifiable intangible assets relates to customer relationships that will be amortized over the period of expected benefit. Goodwill: Goodwill represents commercial synergies, and is expected to be fully deductible for tax purposes. For additional information on goodwill, see Note G. Results of operations: The results of operations attributable to the Medallion Acquisition have been included in our Consolidated Financial Statements since the date of acquisition through Dec. 31, 2024. Revenue and income before income taxes attributable to the net assets acquired for the period Nov. 1, 2024, through Dec. 31, 2024, were $256 million and $43 million, respectively. Gulf Coast NGL Pipelines Acquisition - On June 17, 2024, we completed the acquisition of a system of NGL pipelines from Easton Energy, a Houston-based midstream company, for approximately $280 million. This acquisition in our Natural Gas Liquids segment includes approximately 450 miles of liquids products pipelines located in the strategic Gulf Coast market centers for NGLs, Refined Products and crude oil. A portion of the Easton assets are already connected to our Mont Belvieu assets. We expect to add connections to our Houston-based assets beginning in mid-2025 through the end of 2025. Interstate Natural Gas Pipeline Divestiture - On Dec. 31, 2024, we sold three of our wholly owned interstate natural gas pipeline systems to DT Midstream, Inc. for total cash consideration of $1.2 billion and recognized a gain of $227 million in other operating income, net, within the Consolidated Statement of Income. This transaction aligns and enhances our capital allocation priorities within our integrated value chain. These pipeline systems have previously been reported in our Natural Gas Pipelines segment. Magellan Acquisition - On Sept. 25, 2023, we completed the Magellan Acquisition. This acquisition strategically diversifies our complementary asset base and allows for significant expected synergies as a combined entity. Each common unit of Magellan was exchanged for a fixed ratio of 0.667 shares of ONEOK common stock and $25.00 of cash, for a total consideration of $14.1 billion. A total of approximately 135 million shares of common stock were issued, with a fair value of approximately $9.0 billion as of the closing date of the Magellan Acquisition. We funded the cash portion of this acquisition with an underwritten public offering of $5.25 billion senior unsecured notes. For additional information on our long-term debt, please see Note H. The Magellan Acquisition was accounted for using the acquisition method of accounting for business combinations pursuant to Accounting Standards Codification 805, “Business Combinations,” which requires, among other things, assets acquired and liabilities assumed to be recorded at their fair value on the acquisition date. Determining the fair value of acquired assets and liabilities assumed requires management’s judgment and the use of independent valuation specialists. The following tables set forth the acquisition consideration and final purchase price allocation of assets acquired and liabilities assumed:
| Sept. 25, 2023
| (Millions of dollars and shares/units, except per share/unit data)
Magellan public common units outstanding | 202.1 |
Cash consideration per Magellan unit | $25.00
Cash consideration | $ | 5,052 |
Magellan public common units outstanding | 202.1 |
ONEOK exchange ratio per Magellan unit | 0.667 |
Shares of ONEOK common stock issued | 134.8 |
ONEOK common stock closing price on Sept. 25, 2023 | $66.54
Fair value of common stock issued | $ | 8,969 |
Fair value of Magellan replacement equity awards | 93 |
Equity consideration | $ | 9,062 |
Total consideration | $ | 14,114 |
| Sept. 25, 2023
Assets acquired: | (Millions of dollars)
Cash and cash equivalents | $ | 37 |
Accounts receivables, net | 333 |
Inventories | 352 |
Other current assets | 140 |
Property, plant and equipment | 11,644 |
Investments in unconsolidated affiliates | 922 |
Intangible assets | 1,124 |
Other assets | 121 |
Total assets acquired | 14,673 |
Liabilities assumed: |
Accounts payable | 213 |
Other current liabilities (a) | 721 |
Long-term debt, excluding current maturities | 4,013 |
Other deferred credits and liabilities | 201
Total liabilities assumed | 5,148
Total identifiable net assets | 9,525
Goodwill | 4,589 |
Total purchase price | $ | 14,114 |
(a) - Includes contingent liabilities, primarily related to the amounts accrued for the Corpus Christi matter described in Note P. In 2024, we recorded adjustments to the preliminary purchase price allocation that resulted in an increase to goodwill of $165 million due to additional information received during the measurement period. The adjustment is due primarily to a decrease in property, plant and equipment of approximately $100 million, and an increase to certain contingencies that existed as of the acquisition date. Property, plant and equipment: Property, plant and equipment consists primarily of pipeline, pipeline-related equipment, storage tanks and processing equipment and will be depreciated on a straight-line basis over the estimated useful lives of the assets. Intangible assets: The preliminary value of net identifiable intangible assets relates to customer relationships that will be amortized over the period of expected benefit. Long-term debt, excluding current maturities: We assumed the outstanding debt of Magellan and utilized publicly traded prices to estimate the fair value. The debt comprises senior unsecured obligations with varying maturities and interest rates as outlined in Note H. Recognizing the debt at its acquisition date fair value resulted in a discount from the notional value. The discount will be amortized into interest expense over the remaining life of the debt. Goodwill: Goodwill primarily represents expected tax benefits from future depreciation and amortization of acquired assets and commercial synergies, and is expected to be fully deductible for tax purposes. For additional information on goodwill, see Note G. Transaction Costs - The following table sets forth the impact of acquisition related transaction costs in our Consolidated Statements of Income as of the periods indicated:
|  |  |  |  | Years Ended
|  |  |  |  | Dec. 31,
|  |  |  |  |  | 2024 (a) |  | 2023 (b)
|  |  |  |  | (Millions of dollars)
Transaction costs |  |  |  |  |  | $ | 73 |  |  | $ | 158 |
Interest expense |  |  |  |  |  | 23 |  |  | 21 |
Total |  |  |  |  |  | $ | 96 |  |  | $ | 179 |
(a) - Primarily non-recurring costs related to advisory fees and bridge commitment fees associated with the EnLink Controlling Interest Acquisition and Medallion Acquisition. (b) - Primarily non-recurring costs related to advisory fees, severance and settlement of share based awards for certain Magellan employees and integrations costs, as well as bridge facility commitment fees associated with the Magellan Acquisition. Pro Forma Financial Information (unaudited) The following table sets forth the unaudited supplemental pro forma financial information for the years ended Dec. 31, 2024, 2023 and 2022, as if we had completed the Magellan Acquisition on Jan. 1, 2022, and the EnLink Controlling Interest Acquisition and the Medallion Acquisition on Jan. 1, 2023:
|  |  |  |  |  |  |  | Year Ended Dec. 31, 2024
|  |  |  |  |  |  |  |  |  | Pro Forma EnLink Controlling Interest Acquisition |  | Pro Forma Medallion Acquisition |  |  | Pro Forma Combined
|  |  |  |  |  |  |  |  |  |  |  | As reported |  |  |  |
|  |  |  |  |  | (Millions of dollars)
Revenues |  |  |  |  |  |  |  |  |  |  |  | $ | 21,698 |  |  | $ | 4,891 |  |  | $ | 1,078 |  |  |  | $ | 27,667 |
Net income |  |  |  |  |  |  |  |  |  |  |  | $ | 3,112 |  |  | $ | 288 |  |  | $ | 81 |  |  |  | $ | 3,481 |
|  |  |  |  |  |  |  | Year Ended Dec. 31, 2023
|  |  |  |  |  |  |  |  |  | Pro Forma EnLink Controlling Interest Acquisition |  | Pro Forma Medallion Acquisition |  |  | Pro Forma Magellan Acquisition | Pro Forma Combined
|  |  |  |  |  |  |  |  |  |  |  | As reported |  |  |  |
|  |  |  |  |  | (Millions of dollars)
Revenues |  |  |  |  |  |  |  |  |  |  |  | $ | 17,677 |  |  | $ | 6,671 |  |  | $ | 947 |  |  |  | $ | 2,322 |  | $ | 27,617 |
Net income |  |  |  |  |  |  |  |  |  |  |  | $ | 2,659 |  |  | $ | 383 |  |  | $ | (16) |  |  |  | $ | 232 |  | $ | 3,258 |
The summarized unaudited pro forma information reflects the following adjustments: •Reflects depreciation and amortization based on the preliminary fair values of property, plant and equipment, and intangible assets; •Reflects non-recurring transaction costs incurred presented above that were reclassified and included in pro forma net income as if they had been incurred as of the earliest period presented for each respective acquisition; •Reflects interest expense related to the underwritten public offerings of senior unsecured notes used to fund the cash consideration and other costs related to the acquisitions; •Reflects the amortization of excess fair value of Magellan and EnLink share-based awards; •Reflects the income tax effect of the pro forma adjustments; •Reflects the elimination of historical activity between ONEOK, EnLink and Medallion.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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