ONEOK Inc. (NYSE:OKE)

The analysis of the annual property, plant, and equipment financial data reveals several notable trends and variations in asset composition and valuation over the period from 2018 to 2022.

Gathering pipelines and related equipment

This asset category shows a general upward trend, increasing from approximately 3.85 billion USD in 2018 to around 4.67 billion USD in 2022, with a slight dip observed in 2020. This indicates continued investment or valuation growth in gathering infrastructure despite minor fluctuations.

Processing and fractionation and related equipment

The value of processing and fractionation equipment increased steadily, starting from about 4.17 billion USD in 2018 and reaching 5.40 billion USD by 2022. The most significant growth occurred between 2019 and 2020, suggesting expansion or significant upgrades in processing capabilities during this period.

Storage and related equipment

Storage assets increased from approximately 656 million USD in 2018 to 926 million USD by 2022. This steady increase reflects ongoing investment in storage capacity or maintenance of existing assets to support operational needs.

Transmission pipelines and related equipment

This category experienced minor fluctuations with a moderate increase from 782 million USD in 2018 to a peak around 886 million USD in 2021, followed by a decline to approximately 757 million USD in 2022. The decrease in the final year could indicate asset disposals, reclassifications, or valuation changes.

General plant and other

General plant assets showed consistent growth from 547 million USD to 716 million USD across the five-year span, pointing to incremental capital expenditures or revaluation effects.

Construction work in process (nonregulated segment)

There was substantial variation in construction work in process within the nonregulated segment. The value more than doubled from approximately 797 million USD in 2018 to over 1.61 billion USD in 2022, with peak investments noted in 2019. This suggests active project development with fluctuating capital deployment timing.

Nonregulated segment totals

The nonregulated assets demonstrated consistent expansion, growing from roughly 10.8 billion USD to 14.1 billion USD over the period. This indicates strategic growth focus or asset base strengthening in the nonregulated business line.

Storage and related equipment (nonregulated)

Values remained relatively stable and low, fluctuating slightly between 8.9 million USD and 9.7 million USD, indicating limited activity or replacement within this smaller subcategory.

Natural gas transmission pipelines and related equipment

There was a steady increase from approximately 1.48 billion USD in 2018 to nearly 2.03 billion USD in 2022, showing an increasing asset base in natural gas transmission infrastructure within the nonregulated operations.

NGL transmission pipelines and related equipment

This category evidenced substantial growth over the years, rising from about 4.68 billion USD in 2018 to a peak exceeding 8.59 billion USD in 2021, followed by a slight decrease to 8.58 billion USD in 2022. The rapid growth, particularly between 2018 and 2021, suggests significant capital investments or acquisitions in natural gas liquids transmission.

General plant and other (nonregulated)

Growth was noted here as well, with values rising from approximately 61 million USD to almost 95 million USD, reflecting incremental increases similar to the regulated segment's general plant assets.

Construction work in process (nonregulated)

Significant volatility characterizes this line item, which peaked near 1.8 billion USD in 2019 before declining sharply and remaining at lower levels in subsequent years. This suggests episodic capital project activity with shifting focus over the timeline.

Regulated segment totals

The regulated segment showed a consistent increase in asset values from about 7.23 billion USD in 2018 to 10.93 billion USD in 2022. This steady growth points to ongoing investment in regulated assets, likely supporting stable operational expansion or asset replacement.

Gross property, plant, and equipment

Aggregate gross property, plant, and equipment increased steadily from 18.03 billion USD in 2018 to 25.02 billion USD in 2022. This trend indicates ongoing capital expenditures and asset base growth during the period.

Accumulated depreciation and amortization

Accumulated depreciation rose from approximately 3.26 billion USD at the end of 2018 to 5.06 billion USD in 2022, reflecting the aging of assets and the systematic allocation of asset costs over time. The increasing balance is consistent with the growth in the asset base.

Net property, plant, and equipment

Net property, plant, and equipment followed a growth trajectory, rising from 14.77 billion USD in 2018 to nearly 19.95 billion USD by the end of 2022. Although the growth rate is slower than gross assets due to accumulated depreciation, the net increase demonstrates sustained asset growth and investment returns.

Average Age Ratio

The average age ratio of property, plant, and equipment has exhibited a general upward trend from 18.1% at the end of 2018 to 20.24% at the end of 2022. This metric showed a slight decline from 18.1% in 2018 to 16.79% in 2019, followed by a marginal increase to 16.98% in 2020. Afterward, there was a more noticeable rise to 18.89% in 2021, continuing onward to 20.24% in 2022.

This progression indicates that, on average, the property, plant, and equipment are becoming older over the period analyzed. The increase in the average age ratio suggests a trend toward aging assets, which may imply reduced capital investments in new assets or slower asset turnover rates during these years. The steady increase in the last two years could be a signal of aging infrastructure and might necessitate future reinvestment or replacement strategies to maintain operational efficiency.

The financial data related to property, plant, and equipment over the five-year period reflects a series of significant trends in asset valuation and depreciation.

Accumulated Depreciation and Amortization

The accumulated depreciation and amortization amount increased steadily each year, rising from approximately 3.26 billion USD in 2018 to over 5.06 billion USD by the end of 2022. This consistent growth indicates ongoing depreciation of the fixed assets, reflecting their usage, wear, and aging over time. The acceleration in depreciation from 2020 onward suggests either increased asset base utilization or adjustments in depreciation schedules.

Gross Property, Plant, and Equipment

The gross value of property, plant, and equipment showed a persistent upward trend throughout the period, increasing from roughly 18.0 billion USD in 2018 to 25.0 billion USD in 2022. This growth indicates substantial capital investment and asset acquisition initiatives. The most notable increase occurred between 2018 and 2019, with additions exceeding 4 billion USD, after which the growth rate moderated but remained positive, indicating sustained expansion of the asset base.

Average Age Ratio

The average age ratio, expressed as a percentage, exhibited a declining trend initially, decreasing from 18.1% in 2018 to 16.79% in 2019, suggesting the addition of relatively newer assets that reduced the average age of the property portfolio. However, from 2020 onwards, the ratio began to increase again, reaching 20.24% in 2022. This reversal indicates that either the rate of new asset acquisition slowed relative to the aging existing assets, or that older assets are comprising a larger proportion of the total asset base. The increasing average age ratio coupled with rising accumulated depreciation further confirms an aging asset portfolio in recent years.

Overall, the data reveals a company actively investing in property, plant, and equipment while simultaneously experiencing the natural depreciation cycle of its assets. The initial decrease in average age suggests a modernization or expansion phase, followed by a phase where asset aging is more pronounced, highlighting potential future capital expenditure requirements to maintain or upgrade the asset base.