Andrew Ziola - Vice President, Investor Relations Terry Spencer - President and Chief Executive Officer Walt Hulse - CFO, EVP, Strategic Planning and Corporate Affairs Kevin Burdick - Executive Vice President and Chief Operating Officer Sheridan Swords - Senior Vice President, Natural Gas Liquids Charles M. Kelley - Senior Vice President, Natural Gas Gathering and Processing

Shneur Gershuni - UBS Eric Genco - Citi Kristina Kazarian - Credit Suisse Brian Zarahn - Mizuho Securities Christine Cho - Barclays Jeremy Tonet - JP Morgan Chris Sighinolfi - Jefferies Ted Durbin - Goldman Sachs Craig Shere - Tuohy Brothers Ethan Bellamy - Baird

Good day and welcome to the Fourth Quarter 2017 ONEOK Earnings Call. Today's call is being recorded. At this time I would like to turn the call over to Mr. Andrew Ziola. Please go ahead, sir.

Thank you, Avenee, and good morning everyone and welcome to ONEOK's fourth quarter 2017 and year-end earnings conference call. A reminder that statements made during this call that might include ONEOK's expectations or predictions should be considered forward-looking statements and are covered by the Safe Harbor provision of the Securities Acts of 1933 and 1934. Actual results could differ materially from those projected in any forward-looking statements. For a discussion of factors that could cause actual results to differ, please refer to our SEC filings. Our first speaker this morning is Terry Spencer, President and Chief Executive Officer. Terry?

Thanks Andrew. Good morning and thank you all for joining us today. As always we appreciate your continued interest and investment in ONEOK. Joining me today's call are Walt Hulse, Chief Financial Officer, Executive Vice President, Strategic Planning and Corporate Affairs, Kevin Burdick, Executive Vice President and Chief Operating Officer. And the Senior Vice President of our business segments, also are available for questions. On this call, we will focus on fourth quarter and year end 2017 financial results. And provide some additional cover on our strategic and accretive growth projects including our recently announced Arbuckle II Pipeline, MB-4 Fractionator and Demicks Lake projects. We've previously provided 2018 guidance in January. 2017 was an important year for ONEOK. We completed the ONEOK and ONEOK Partners merger transaction in June. And the benefits of that transaction are paying off to ONEOK and its shareholders, particularly as we invest more than $4 billion in strategic expansions over our existing integrated network of pipelines, plants, fractionation and storage facilities with more favorable access to the financial markets as a result of the merger and our continued focus on generating attractive returns. That was proven by extremely successful traditional equity offerings in early January that pre-funded that projects that we have recently announced. From an operations perspective in 2017, I again want to thank our employees who personally endured Hurricane Harvey and countless others who worked tirelessly to keep our assets running safely in order to provide reliable services to our customers not only during the hurricane but every day. The dedication and commitment of all our employees to this company is remarkable and I very much appreciate their hard work in making our company successful. Moving onto our 2017 performance, for the fourth quarter and for the full year of producer activity in production results drove the volume growth in all our business segments throughout our operating footprints which led to an adjusted EBITDA and distributable cash flow growth. The recent completion of two world scale petrochemical crackers will continue to increase demand for ethane in the Gulf Coast, as these facilities complete their startup activities. In addition four more crackers with a total capacity of nearly 200,000 barrels per day of ethane are expected to be completed later this year. As outlined in our 2018 guidance, this additional demand for ethane is expected to drive approximately $100 million of additional EBITDA in our NGL segment compared with 2017. After staying for a few years now that new petrochemical facilities and ethane crackers are being built, it is now evident in the marketplace that the incremental demand for ethane is here. Our focus remains on executing our cracker growth projects to meet the need of our customers at Williston, Powder River, DJ STACKS SCOOPS and Permian basins. Over the last decade, ONEOK experienced operations, constructions and commercial teams successfully executed $9 billion in capital investments, aggregating supply and delivering into the market safely, reliably in an environmentally responsible manner. With that I will now turn the call over to Walt.

Thank you, Terry. ONEOK's 2017 operating income totaled nearly $1.4 billion and adjusted EBITDA totaled nearly $2 billion. 30% increases compared with 2016 and more than 25% increase compared with 2015. All driven primarily by strong volume growth and we expect to see that growth continuing with adjusted EBITDA increasing more than 15% for 2018 compared with 2017. Distributable cash flow was nearly $1.4 billion in 2017 and dividend coverage of more than 1.3x, was well above our guidance of 1.2x or greater for the year. This month we paid a quarterly dividend of $0.77 per share or $3.08 per share on an annualized basis. The 25% increase compared with the same period in 2017. Management still expects to recommend dividend increases of 9% to 11% annually and maintain our target for annual dividend coverage of 1.2x or greater. As noted in our earnings release, fourth quarter net income included $141 million of one-time non-cash charges related to the Tax Cuts and Jobs Act, which impacted fourth quarter earnings per share by $0.36 and full year earnings per share by $0.47. We view the overall impact from the Tax Cuts and Jobs Act as positive to ONEOK due to the lower corporate tax rate and the immediate expansion of most of our capital spending. As Terry mentioned, we have announced more than $4 billion of new capital growth projects since June. These interactive investments are expected to generate adjusted EBITDA on multiples of 4x to 6x and are backed by a combination of long-term fee-based contracts, volume commitments or acreage dedications. Based on these recent projects announcements ONEOK's 2018 capital growth expenditures are now expected to range from nearly $2 billion to $2.3 billion, an increase of approximately $700 million compared with our initial 2018 guidance. Maintenance capital guidance remains unchanged to $140 million to $180 million. We have talked quite a bit about the funding of this highly accretive growth projects and how we essentially pre-funded our equity needs. In the fourth quarter, we received net proceeds of $384 million through ATM equity program and completed a $1.2 billion public common stock offering in January, resulting in total combined net proceeds of approximately $1.6 billion. With the expected significant cash generated from operations and excessive dividends, and ample borrowing capacity, we don't expect to issue any equity in 2018 or well into 2019. Following the equity offering in January ONEOK's pro forma debt to EBITDA on last 12 months basis improved to just under 4x and put us at our target a year earlier than we expected. We expect our leverage to increase modestly during the later stages of construction but we continue to view four times or less, as an important target for ONEOK in long term. Our anticipated EBITDA growth in 2018 will enable us to fund our growth with excess cash flow from operations and short and long term debt, while maintaining strong credit metrics. As it relates to review of rates on West Texas LPG, the regulatory process continues and it will resolve itself in due course. Our 2018 NGL segment financial guidance encompasses a range of potential outcomes for the rig division. The midpoint of NGL segment adjusted EBITDA guidance does not assume any uplift from potential rate increase. As we said previously, the outcomes of which will not impact our current or future negotiated rates of West Texas LPG nor will it hinder our ability to secure new NGL supply from producers and processors including the project which extends West Texas LPG into the core of Delaware basin. As we continue to actively negotiate with producers in the Permian for additional capacity. Now I will turn the call over to Kevin for closer look at each of our business segments and to provide to some additional color on our growth projections.

Thank you, Walt. Starting with the performance of our Natural Gas Liquid segment. 2017 was another year of strong volume growth setting us up well for even greater growth in 2018. Fourth quarter 2017 NGL volumes gathered averaged 867,000 barrels per day, a 7% increase compared with the third quarter 2017. And a 17% increase compared with the fourth quarter of 2016. Higher overall raw feed volumes on our Mid-Continent and West Texas LPG pipeline drove the sequential quarter increases with Mid-Continent volumes increasing more than 9% during that timeframe. Mid-Continent growth continues to be driven by strong producer results in STACK and SCOOP areas. Our Bakken NGL pipeline is operating at full capacity as volumes averaged 136,000 barrels per day in the fourth quarter 2017. Our recently announced Elk Creek pipeline project will alleviate NGL capacity constraints out of the Rocky Mountain region once complete. And we expect to use our rail transport capabilities as early as second quarter 2018 to provide the necessary takeaway for expected volume growth until Elk Creek is in service. NGL volumes fractionated in fourth quarter 2017 increased 13% compared with the third quarter 2017 driven by higher gathered volumes across our NGL systems, and lower volumes fractionated in the third quarter due to impacts from Hurricane Harvey. Volume that could not be fractionated during the third quarter because of the hurricane were stored and fractionated in the fourth quarter. Our NGL volumes were in line with our guidance range even with petrochemical cracker completion delay and the impacts from Hurricane Harvey. Moving onto the natural gas gathering and processing segment. We exceeded our 2017 financial guidance expectations due to the strong producer results in Williston Basin and STACK and SCOOP areas. The segment's fourth quarter 2017 average natural gas gathered and processed volumes increased 20% compared with the same period in 2016. Fourth quarter volumes processed increased 5% compared with the third quarter 2017 averaging nearly 1.7 billion cubic feet per day across our system. Williston Basin volumes processed again established new highs with an average of more than 870 million cubic feet per day during the fourth quarter. Mid-Continent processed volumes average more than 790 million cubic feet per day, a 6% increase compared with the third quarter 2017. We exceeded our well connection expectations for 2017 in both the Williston Basin and Mid-Continent, connecting 430 and 113 wells respectively. And we expect to connect approximately 650 wells total in 2018, a nearly 20% increase from last year. In the Williston Basin, continued producer activity, improving well performance and higher gas to oil ratios are driving volumes growth. Analysis of recent well results shows 25 to 30 rigs to date can produce as much natural gas volumes as 70 to 80 rigs three years ago. With now only 100 million cubic feet per day of available processing capacity on our systems, our recently announced Demicks Lake processing plant will provide producers in the region with much needed processing capacity to accommodate growth expectations. Volumes growth in the Mid-Continent in the fourth quarter 2017 was driven by strong producer results in the STACK and SCOOP areas which led to a 6% increase in natural gas volumes processed compared with the third quarter 2017. Our third party offload is operational which provides us access to an additional 200 million cubic feet per day of processing capacity for our growing volumes in the STACK, and we are on track to add an additional 200 million cubic feet per day of capacity in the fourth quarter of this year with the expansion of our Canadian Valley plant. Once complete, we will have an approximately 1.1 billion cubic feet per day of processing capacity in Oklahoma. In the natural gas pipeline segment, 2017 adjusted EBITDA increased 9% compared with 2016. The segment continues to benefit from higher fee-based earnings and increased transportation capacity contracted. The segment continues discussions with producers in Permian basin and the STACK and SCOOP areas to accommodate additional natural gas takeaway capacity given the strong growth expectations in those splits. Recent tax reform laws have spurred conversation around potential impacts for regulated pipelines. For ONEOK, since most of our natural gas pipeline contracts have been established through shipper specific negotiated rates and settlements, we don't anticipate adjustments to rates solely because of lower tax rates. Related to rate settlements on February 23, Northern Border Pipeline received a letter order from the FERC approving their uncontested rate case settlement without modifications. Now let's take a closer look at our recently announced capital growth projects and how these latest projects complement and enhance our previously announced investments. This year we have announced two strategic NGL pipeline projects, Elk Creek and Arbuckle II. The 530 mile Arbuckle II pipeline will have an initial capacity of 400,000 barrels per day and has the capability to be expanded up to one million barrels per day with additional pump facilities which could more than double our current capacity between the Mid-Continent and Gulf Coast with minimal capital investment. We are also adding 125,000 barrels per day of additional fractionation capacity at Mont Belvieu with the announcement of our MB-4 fractionator. The Arbuckle II pipeline is already more than 50% contracted and will provide producers in all the basins where we operate with connectivity to growing demand in Mont Belvieu. The adjusted EBITDA are multiple forecasted for these projects are based only from these contracts and discussions with customers regarding additional supply continue to take place. The MB-4 fractionator is already fully contracted and both projects are expected to be complete in the first quarter of 2020. Our Demicks Lake Plant will add an additional 200 million cubic feet per day of processing capacity in Williston Basin bringing ONEOK's total capacity in the region to more than 1.2 billion cubic feet per day in the fourth quarter 2019. Additionally, we are in the permitting process for an expansion of our Bear Creek processing facility that we expect could add 40 to 60 million cubic feet per day of capacity with minimal capital. NGLs from the Demicks Lake Plant will ultimately feed our Elk Creek pipeline which in turn will connect with ONEOK's extensive Mid-Continent NGL gathering system which provides connectivity from the Williston Basin to the Gulf Coast. A quick update on our Elk Creek pipeline announced in early January. We continue to have discussions with producers and processors to secure additional supply out of the Rocky's region. And our outlook now exceeds our original volume expectations by 10% to 20%. We continue to proactively communicate with landowners, state and local agencies and other stakeholders along the pipeline route and expect to be given construction later this year. All of these strategic attractive return projects will work together to provide much needed solutions for producers and position ONEOK with considerable long-term operating leverage across our integrated network of assets. Terry that concludes my remarks.

Thanks Kevin. Before we take questions, I have got a couple of items to point out. As I mentioned earlier in my remarks ONEOK's will like to focus on executing on our $4 billion announced growth projects over the next several year. So which will take us to 2020? As we look beyond 2020, I'll go ahead and answer questions, some of you maybe wanting to ask and that is what's next. As Kevin detailed, many of our projects are being designed with the ability to expand immediately with minimal capital investments. And we'll continue to develop opportunities and in our under our asset footprint to expand even further. Whether that is to pipelines, processing plants, fractionators or storage. All of which we proven, we don't have to manage, build operate and optimize. So with that operator we're now ready for questions.

[Operator Instructions] And we'll take our first question from Shneur Gershuni with UBS Financial. Please go ahead.

And we'll move next to Eric Genco with Citi Bank. Please go ahead.

Our next question will come from Kristina Kazarian with Credit Suisse. Please go ahead.

We'll take our next question from Brian Zarahn with Mizuho Securities. Please go ahead.

We will move to our next question from Christine Cho with Barclays. Please go ahead.

Our next question will come from Jeremy Tonet with JP Morgan. Please go ahead.

We'll move next to Chris Sighinolfi with Jefferies. Please go ahead.

We'll take our next question from Ted Durbin with Goldman Sachs. Please go ahead.

Our next question will come from Craig Shere with Tuohy Brothers. Please go ahead.

We will now take our next question from Ethan Bellamy with Baird. Please go ahead.

There are no further telephone questions at this time. I'd like to turn the conference back over to Andrew Ziola for any additional or closing remarks.

Okay. Thank you. Great questions today. Our quiet period for the first quarter starts when we close our books in April. And extends until earnings are release in early May. Thank you for joining us.

This concludes today's conference. Thank you for your participation. You may now disconnect.