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10-K 1 oke10-k2018.htm OKE 10-K 2018

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018.

OR

__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission file number 001-13643

ONEOK, Inc.

(Exact name of registrant as specified in its charter)

Oklahoma73-1520922
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
100 West Fifth Street, Tulsa, OK74103
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code (918) 588-7000

Securities registered pursuant to Section 12(b) of the Act:

Common stock, par value of $0.01New York Stock Exchange
(Title of each class)(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes X No__.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes __ No X.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No __

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes X No __

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Registration S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. __

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer X Accelerated filer __ Non-accelerated filer __ Smaller reporting company __

Emerging growth company___

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.__

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes__ No X.

Aggregate market value of registrant’s common stock held by non-affiliates based on the closing trade price on June 30, 2018, was $28.3 billion.

On February 19, 2019, the Company had 411,611,382 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the definitive proxy statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held May 22, 2019, are incorporated by reference in Part III.

ONEOK, Inc.

2018 ANNUAL REPORT

Part I.Page No.
Item 1.Business5
Item 1A.Risk Factors18
Item 1B.Unresolved Staff Comments34
Item 2.Properties34
Item 3.Legal Proceedings34
Item 4.Mine Safety Disclosures34
Part II.
Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities34
Item 6.Selected Financial Data36
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations36
Item 7A.Quantitative and Qualitative Disclosures about Market Risk57
Item 8.Financial Statements and Supplementary Data60
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure123
Item 9A.Controls and Procedures123
Item 9B.Other Information123
Part III.
Item 10.Directors, Executive Officers and Corporate Governance123
Item 11.Executive Compensation124
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters124
Item 13.Certain Relationships and Related Transactions, and Director Independence125
Item 14.Principal Accounting Fees and Services125
Part IV.
Item 15.Exhibits, Financial Statement Schedules126
Item 16.Form 10-K Summary135
Signatures136

As used in this Annual Report, references to “we,” “our,” or “us” refer to ONEOK, Inc., an Oklahoma corporation, and its predecessors and subsidiaries unless the context indicates otherwise.

GLOSSARY

The abbreviations, acronyms and industry terminology used in this Annual Report are defined as follows:

$1.5 Billion Term Loan AgreementThe senior unsecured delayed-draw three-year $1.5 billion term loan agreement dated November 19, 2018
$2.5 Billion Credit AgreementONEOK’s $2.5 billion revolving credit agreement, as amended
AFUDCAllowance for funds used during construction
Annual ReportAnnual Report on Form 10-K for the year ended December 31, 2018
ASUAccounting Standards Update
BblBarrels, 1 barrel is equivalent to 42 United States gallons
Bbl/dBarrels per day
BBtu/dBillion British thermal units per day
BcfBillion cubic feet
Bcf/dBillion cubic feet per day
CFTCU.S. Commodity Futures Trading Commission
Clean Air ActFederal Clean Air Act, as amended
Clean Water ActFederal Water Pollution Control Act Amendments of 1972, as amended
DJDenver-Julesburg
DOTUnited States Department of Transportation
EBITDAEarnings before interest expense, income taxes, depreciation and amortization
EPAUnited States Environmental Protection Agency
Exchange ActSecurities Exchange Act of 1934, as amended
FERCFederal Energy Regulatory Commission
FoundationONEOK Foundation, Inc.
GAAPAccounting principles generally accepted in the United States of America
GHGGreenhouse gas
Intermediate PartnershipONEOK Partners Intermediate Limited Partnership, a wholly owned subsidiary of ONEOK Partners, L.P.
KCCKansas Corporation Commission
LIBORLondon Interbank Offered Rate
MBbl/dThousand barrels per day
MDth/dThousand dekatherms per day
Merger TransactionThe transaction, effective June 30, 2017, in which ONEOK acquired all of ONEOK Partners’ outstanding common units not already directly or indirectly owned by ONEOK
MMBblMillion barrels
MMBtuMillion British thermal units
MMcf/dMillion cubic feet per day
Moody’sMoody’s Investors Service, Inc.
Natural Gas ActNatural Gas Act of 1938, as amended
Natural Gas Policy ActNatural Gas Policy Act of 1978, as amended
NGL(s)Natural gas liquid(s)
NGL productsMarketable natural gas liquid purity products, such as ethane, ethane/propane mix, propane, iso-butane, normal butane and natural gasoline
NYMEXNew York Mercantile Exchange
NYSENew York Stock Exchange
OCCOklahoma Corporation Commission
ONEOKONEOK, Inc.
ONEOK PartnersONEOK Partners, L.P.
ONEOK Partners Term Loan AgreementThe senior unsecured three-year $1.0 billion term loan agreement dated January 8, 2016, as amended
OPISOil Price Information Service
OSHAOccupational Safety and Health Administration
PHMSAUnited States Department of Transportation Pipeline and Hazardous Materials Safety Administration
POPPercent of Proceeds
Quarterly Report(s)Quarterly Report(s) on Form 10-Q
RoadrunnerRoadrunner Gas Transmission, LLC, a 50 percent-owned joint venture
RRCRailroad Commission of Texas
S&PS&P Global Ratings
SCOOPSouth Central Oklahoma Oil Province, an area in the Anadarko Basin in Oklahoma
SECSecurities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
Series E Preferred StockSeries E Non-Voting, Perpetual Preferred Stock, par value $0.01 per share
STACKSooner Trend Anadarko Canadian Kingfisher, an area in the Anadarko Basin in Oklahoma
Tax Cuts and Jobs ActH.R. 1, the tax reform bill, signed into law on December 22, 2017
Topic 606Accounting Standards Update 2014-09, “Revenue from Contracts with Customers”
West Texas LPGWest Texas LPG pipeline and Mesquite pipeline
WTIWest Texas Intermediate
WTLPGWest Texas LPG Pipeline Limited Partnership
XBRLeXtensible Business Reporting Language

The statements in this Annual Report that are not historical information, including statements concerning plans and objectives of management for future operations, economic performance or related assumptions, are forward-looking statements. Forward-looking statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “should,” “goal,” “forecast,” “guidance,” “could,” “may,” “continue,” “might,” “potential,” “scheduled” and other words and terms of similar meaning. Although we believe that our expectations regarding future events are based on reasonable assumptions, we can give no assurance that such expectations or assumptions will be achieved. Important factors that could cause actual results to differ materially from those in the forward-looking statements are described under Part I, Item 1A, Risk Factors, and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and “Forward-Looking Statements,” in this Annual Report.

PART I

Next: Item 1. BUSINESS