Slide 1: Acquisition of Magellan Midstream Partners
ACQUISITION OF MAGELLAN MIDSTREAM PARTNERS May 2023
Slide 2: Cautionary Statement
CAUTIO NARY S TATE M E NT Forward-Looking Statements This presentation includes “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities and Exchange Act of 1934, as amended. All statements, other than statements of hi
Slide 3: Cautionary Statement (Continued)
CAUTIO NARY S TATE M E NT (CO NTINUE D) No Offer or Solicitation This presentation is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be
Slide 4: Strategic Alignment
S TRATE G IC ALIG NM E NT COMPLEMENTARY BUSINESSES, ASSET COMPATIBILITY AND OPERATING PHILOSOPHY C U L T U R A L LY : Pro Forma Asset Map Committed to safe, reliable and environmentally responsible operations Committed to financial discipline and prudent financial policy Focused on total inv
Slide 5: Transaction Overview
TRANS ACTIO N O V E RV IE W Stock and cash acquisition Consideration to Magellan ◆ ONEOK (NYSE: OKE) will acquire all outstanding common ◆ Total consideration for each Magellan unit is $67.50 units of Magellan Midstream Partners (NYSE: MMP) ◆ Consideration consists of $25.00 in cash and 0.6670 share
Slide 6: Benefits to Both ONEOK and Magellan
BE NE FITS TO BO TH O NE O K AND M AG E LLAN ONEOK Magellan ◆ Diversifies product mix and earnings resilience by ◆ Diversifies product mix and earnings resilience by adding stable, fee-based refined products and adding stable, fee-based natural gas and crude oil transportation businesses NGL-focused
Slide 7: ONEOK Financial Impact: By the Numbers
O NE O K FINANCIAL IM PACT: BY THE NUM BE RS Accretive beginning ~3-7% annual EPS accretion expected from 2025 through 2027 in 2024 >20% average FCF/share accretion expected from 2024 through 2027 Significant synergy $200MM expected with $400MM+ total annual potential potential ~$15 billion of tax d
Slide 8: Diversifying Transaction Adds Scope and Scale
DIV E RS IFY ING TRANS ACTIO N ADDS S CO P E AND S CALE ONEOK MAGELLAN PRO FORMA Gas Crude Gas 7% Pipelines Pipes 14% Crude Oil 10% 25% NGL G&P Refined G&P 44% NGL 26% Products 18% 60% 75% Refined Products 21% ◆ Natural Gas Liquids ◆ Refined Products ◆ Highly complementary asset base with significan
Slide 9: Combination of Returns-Focused Businesses
CO M BINATIO N O F RE TURNS -FO CUS E D BUS INE S S E S STRONG STEWARDS OF SHAREHOLDER CAPITAL 2022 ROIC(a) ◆ ONEOK and Magellan both Adjusted ROIC(b) produce top-tier ROIC 18.9% ◆ The combined company will 18.5% continue to focus on ROIC as 14.5% a key metric 13.9% 10.8% 9.3% Peer average (c) Sourc
Slide 10: Complementary Assets and Market Positions
CO M P LE M E NTARY AS S E TS AND M ARKE T P O S ITIO NS STRONG INDUSTRIAL LOGIC WITH SIGNIFICANT POTENTIAL TO INCREASE UTILIZATION Pro Forma Liquids-Focused Infrastructure Liquids-focused Key positions in infrastructure market hubs Significant potential to increase utilization of complementary NGL
Slide 11: Potential Synergies to Unlock Value Creation
P O TE NTIAL S Y NE RG IE S TO UNLO CK VALUE CRE ATIO N $200MM OF ANNUAL SYNERGIES…WITH POTENTIAL UPSIDE Upside synergy estimate of $400MM+ and potential ◆ Significant synergy value expected tax deferral value from cost, operational, commercial of ~$3 billion and financial components ◆ Potential for
Slide 12: ONEOK's Disciplined Capital Allocation
O NE O K’S DIS CIP LINE D CAP ITAL ALLO CATIO N RETURNING VALUE TO OUR SHAREHOLDERS ALLOWING US TO RETURN $7.7 CONSISTENT REINVESTMENT EXPECTED TO INCREASE EBITDA BILLION IN DIVIDENDS OVER THE IN OUR BUSINESS ~$1.6 BILLION SINCE 2018 LAST 5 YEARS EBITDA ($BN) ANNUALIZED DIVIDEND ~$10 billion >$4.0 (
Slide 13: Step Change in Free Cash Flow Profile
S TE P CHANG E IN FRE E CAS H FLO W P RO FILE ~$1 BILLION OF ANNUAL FREE CASH FLOW AFTER DIVIDENDS ◆ Expect greater cash flow Changes in 2024E-2027E FCFAD(a) available for debt reduction, dividend increases and/or share repurchases ◆ Flexibility to invest in larger growth capital projects or strateg
Slide 14: Financial Resilience
FINANCIAL RE S ILIE NCE STRONG INVESTMENT-GRADE CREDIT WITH ENHANCED SCALE AND DIVERSIFICATION ◆ Immediately increases scale and resilience of cash flows by adding >$1.5 billion of expected diversified annual EBITDA which is >85% fee-based ◆ Expect pro forma net debt-to-EBITDA of 4.0x at year end 20
Slide 15: Culturally Aligned on Key ESG Criteria
CULTURALLY ALIG NE D O N KE Y E S G CRITE RIA COMMITTED TO OPERATING IN A SAFE AND SUSTAINABLE MANNER ESG reporting transparency and performance disclosures Aligned corporate values of safety and health performance Commitment to promoting a diverse and inclusive workforce Board engagem
Slide 16: Compelling Long-Term Value Proposition
CO M P E LLING LO NG -TE RM VALUE P RO P O S ITIO N Diverse Free Cash Industry Leaders in Highly Attractive Flow Generation Return on Capital Dividend Enhanced Growth Strong Balance Sheet S&P 500 Opportunities Index Member PAGE 16
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