ONEOK (OKE) 10-K risk factor changes: FY2022 vs FY2021

The outbreak and government measures taken in response, including extended quarantines, closures and reduced operations of [removed: businesses] [added: businesses,] had a significant adverse impact, both direct and indirect, on our business and the economy.

This uncertainty, and the occurrence of these events and measures taken in response, could further affect adversely our results of operations by, among other things, reducing demand for the services we provide, impacting our supply chains and the availability and efficiency of our workforce, [added: including our executive officers,] creating operational challenges and impacting our ability to access capital markets.

As a result, our cash flows associated with these wells [removed: will] [added: may] also decline over time.

Commodity prices [removed: have experienced] [added: are subject to] significant volatility.

If we are not able to obtain new supplies to replace the natural decline in volumes from existing [removed: wells] [added: production] or [added: reductions in volumes] because of competition, [added: including increased competition due to industry consolidation,] throughput on our gathering and transportation pipeline systems and the utilization rates of our processing and fractionation facilities would decline, which could affect adversely our business, results of operations, financial position and cash [removed: flows, and our ability to pay cash dividends.][added: flows.]

In addition to impacts from the COVID-19 pandemic, [removed: an] [added: uncertainty or] adverse [removed: change] [added: changes] in economic conditions [removed: worldwide] [added: worldwide, in the United States,] or in the economic regions in which we [removed: operate] [added: operate,] could negatively affect the crude oil and natural gas markets, [removed: as well as in the specific segments in which we operate,] resulting in reduced demand and increased price competition for our services and [removed: products.][added: products, or otherwise affect adversely our business, results of operations, financial position and cash flows.]

[removed: Volatility in commodity prices may have an impact on many] of our suppliers and customers, which, in turn, could have a negative impact on their ability to meet their obligations to us.

Lower commodity prices could reduce crude oil, natural gas and NGL [removed: production] [added: production,] which could decrease the demand for our services.

Additionally, a significant portion of our revenues are derived from the sale of commodities that are received in conjunction with natural gas gathering and processing services, the transportation and storage of natural gas, and from the purchase and sale of NGLs and [removed: NGL products.][added: purity NGLs.]

- overall domestic and global economic [removed: conditions;][added: conditions and uncertainty;]

- [removed: relatively minor] changes in the supply of, and demand for, domestic and foreign [removed: energy;][added: energy, even if relatively minor;]

- [added: the occurrence of wars and other] geopolitical conditions impacting supply and demand for natural gas, NGLs and crude oil;

- production decisions by other countries, [removed: such as] [added: and] the failure of countries to abide by recent agreements [added: relating] to [removed: reduce] production [removed: volumes;][added: decisions;]

Increasing attention to ESG [removed: matters,] [added: issues,] including climate change, may impact our business.

There are increasing expectations that companies across all industries address ESG [removed: matters,] [added: issues,] including climate change.

Changes in regulatory policies, public sentiment or widespread adoption of technologies that aim to address climate change through reducing GHG emissions may result in a reduction in the demand for hydrocarbon products, restrictions on their use or increased use of [removed: renewable energy.][added: alternative energy sources.]

In addition, increasing attention to climate change has resulted in an increased likelihood of governmental [removed: regulations,] investigations, [added: regulation,] shareholder activism and private litigation, which could increase our costs or otherwise affect adversely our business.

For example, [removed: there are] [added: the SEC has announced its] plans to propose new climate change disclosure [removed: requirements this year.][added: requirements.]

[removed: While we do not know what] form those requirements may [removed: take,] [added: take are not final,] we may face increased costs associated with complying with any new climate disclosure [removed: requirements.][added: rules.]

Certain investors are increasingly focused on ESG [removed: matters,] [added: issues,] including climate change.

Further, organizations that provide information to investors on corporate governance and related matters have also increased their focus on ESG [removed: matters] [added: issues] and have developed ratings processes for evaluating companies on various ESG initiatives.

Unfavorable ESG ratings may lead to increased negative investor sentiment toward [removed: us.][added: us or midstream companies in general.]

Due to climate change concerns, some investors may choose to either not invest, or to reduce their investment, in companies that [removed: gather,] [added: explore for, produce,] process, [removed: fractionate, transport, store] [added: transport] or [removed: market] [added: sell] products derived from hydrocarbons.

Additionally, certain large institutional lenders have [removed: begun to announce] [added: announced] their own policies to meet publicly announced climate commitments, which often involve commitments to shift lending activities in [added: the energy sector to meet GHG emissions goals.]

In September 2021, we announced a [removed: 30%] [added: companywide] absolute GHG [added: emissions] reduction [removed: target, or] [added: target of] 2.2 million metric [removed: tons,] [added: tons] of [added: carbon dioxide equivalents from] our combined Scope 1 and Scope 2 emissions by [removed: 2030, compared with 2019 base-year levels.][added: 2030.]

To the extent that the potential pathways we have identified to achieve this emissions reduction target are not available to us, or to the extent we otherwise are unable to make progress toward other ESG-related targets we may establish, we may face additional costs to meet these targets, or we may fail to meet [removed: them entirely,] [added: them,] which could negatively impact our business and reputation.

Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including [added: damage to our assets or] service interruptions.

Severe weather impacts our operating territories primarily through hurricanes, thunderstorms, tornados, [added: floods,] freezing temperatures and snow or ice storms.

Our operations are subject to all the risks and hazards typically associated with the operation of natural gas and NGL gathering, transportation and distribution pipelines, storage facilities and processing and fractionation facilities, which include, but are not limited to, leaks, pipeline ruptures, [added: damage by third parties,] the breakdown or failure of equipment or processes and the performance of facilities below expected levels of capacity and efficiency.

Other operational hazards and unforeseen interruptions include adverse weather [removed: conditions,] [added: conditions (including extreme cold weather),] infectious disease including a pandemic, cybersecurity attacks, geopolitical reactions, accidents, explosions, fires, the collision of equipment with our pipeline facilities (for example, this may occur if a third party were to perform excavation or construction work near our facilities) and catastrophic events such as tornados, hurricanes, earthquakes, [removed: floods,] [added: floods] and other similar events beyond our control.

[removed: Extreme] [added: Similar operational hazards and unforeseen interruptions may also impact our producers or suppliers; for example, extreme] cold weather can result in supply reductions from producer wellhead freeze-offs, as well as power curtailments or [removed: outages, any of which can negatively impact our business, results of operations, financial position and cash flows.][added: outages.]

[removed: As a result of market conditions, premiums] [added: Premiums] and deductibles for certain insurance policies can increase substantially, and, in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage.

Insurance proceeds may not be adequate to cover all liabilities or [removed: expenses] incurred [removed: or revenues lost,] [added: costs] and [removed: we are not fully insured against all risks inherent to our business.][added: losses or lost earnings.]

[added: In our Natural Gas Gathering and Processing segment, the development of] reserves could move drilling rigs from our current service areas to other areas, which may reduce demand for our services.

- the price differentials between the individual [removed: NGL products] [added: purity NGLs] with respect to our NGL transportation and fractionation agreements;

Our financial results could also be affected adversely if [removed: an individual causes] our operational systems [removed: to fail, either] [added: fail] as a result of [added: an] inadvertent error or by [removed: deliberately] [added: deliberate] tampering with or [removed: manipulating] [added: manipulation of] our operational systems.

In addition, dependence upon automated systems may further increase the risk that operational system [removed: flaws,] [added: flaws or] employee [added: or third-party] tampering or manipulation of those systems will result in losses that are difficult to detect.

Due to increased technology advances and an increase in remote work [removed: arrangements due to the COVID-19 pandemic,] [added: arrangements,] we have become more reliant on technology to help increase efficiency in our businesses.

According to experts, [removed: since the beginning of the COVID-19 pandemic] there has been a rise in the number and sophistication of cyberattacks on companies’ network and information systems by both state-sponsored and criminal [removed: organizations, and] [added: organizations and,] as a result, the risks associated with such an event continue to [added: increase.]

Efforts by us and our vendors to develop, implement and maintain security measures may not be successful in anticipating, detecting or preventing these events from occurring, [added: due in part to attackers’ ever-changing methods] and [added: efforts to conceal their activities, and] any network and information systems-related events could require us to expend significant resources to identify, assess and remedy such events.

- producers’ ability to secure drilling and completion crews and equipment;

Volatility in commodity prices may have an impact on many

Also, economic conditions in the wake of the pandemic have included increasing inflation.

Inflationary pressures have resulted in, and may continue to result in, additional increases to the cost of our materials, services and personnel, which could increase our capital expenditures and operating costs.

Sustained levels of high inflation have caused the Federal Reserve System and other central banks to increase interest rates, which may cause the cost of capital to increase and depress economic growth, either of which, or the combination of both, could affect adversely our business, results of operations, financial position and cash flows.

While the

The target represents a 30% reduction in combined operational Scope 1 and location-based Scope 2 GHG emissions attributable to ONEOK assets as of December 31.

For example, on July 9, 2022, a fire occurred at our 210 MBbl/d Medford, Oklahoma, natural gas liquids fractionation facility.

The occurrence of operational hazards and unforeseen interruptions could affect adversely our business results of operations, financial position and cash flows.

Further, we are not fully insured against all risks inherent to our business.

- we may be unable to obtain new rights of way or permits to connect our systems to supply or downstream markets;

- inflationary pressure could increase our costs for construction materials or labor.

We may be unable to unilaterally determine the cash

distribution policies of our unconsolidated affiliates.

Additionally, in the wake of the COVID-19 pandemic, inflationary pressures have increased in the U.S. and globally.

For example, the Inflation Reduction Act will require the payment of “Methane Fees” for specific facilities that exceed GHG emission and/or methane intensity thresholds beginning in 2024.

However, we cannot predict precisely what form these future legislative and/or regulatory initiatives will take, the stringency of

- the Endangered Species Act and analogous state laws that impose obligations related to protection of threatened and endangered species; and

We could also face

Any failure to maintain effective internal

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

Our operating results in one or more geographic regions may also be affected by uncertain or changing economic conditions within that region.

If adverse global or regional economic and market conditions remain uncertain or persist, spread or deteriorate further, we may experience material impacts on our business, results of operations, financial position, cash flows and liquidity.

the energy sector to meet GHG emissions goals.

Liabilities incurred and interruptions to the operations of our pipeline or other facilities caused by such an event could reduce our revenues and increase expenses, thereby impairing our ability to meet our obligations.

In our Natural Gas Gathering and Processing segment, the development of

increase.

- we may be unable to obtain new rights of way to connect new natural gas or NGL supplies to our existing gathering or transportation pipelines;

We do not have any direct control over the cash distribution policies of our unconsolidated affiliates.

Additionally, the amount of cash that we have available for cash dividends depends primarily upon our cash flows, including working capital borrowings, and is not solely a function of profitability, which will be affected by noncash items such as depreciation, amortization and provisions for asset impairments.

As a result, we may be able to pay cash dividends during periods when we record losses and may not be able to pay cash dividends during periods when we record net income.

Examples of these more significant activities

In addition to activities on the federal level, state and regional initiatives could also lead to the regulation of GHG emissions sooner than or independent of federal regulation.

These regulations could be more stringent than any federal legislation that may be adopted.

Recently, the EPA has proposed updating the New Source Performance Standards Subpart OOOO regulations to further reduce methane emissions, which includes increased monitoring frequency and more stringent repair requirements for new and modified oil and gas facilities.

In addition, the EPA is proposing new nationwide emission guidelines for states to limit methane emissions from existing facilities.

We cannot predict the potential impact to our business resulting from these additional regulations and guidelines.

practices, some of which may be material.

Our business may be affected adversely by increased costs due to stricter pollution-control requirements or liabilities resulting from noncompliance with required operating or other regulatory permits.

New or revised environmental regulations might also affect adversely our products and activities, and federal and state agencies could impose additional safety requirements, all of which could affect adversely our profitability.

In July 2017, the head of the United Kingdom Financial Conduct Authority announced the desire to phase out the use of LIBOR by the end of 2021.

However, in March 2021, the administrator of LIBOR, the ICE Benchmark Administration, announced all U.S. dollar LIBOR tenors will continue to be published through June 2023, with the exception of one-week and two-month tenors, which ceased at the end of 2021.

The U.S. Federal Reserve concurrently issued a statement advising banks to stop new LIBOR issuances by the end of 2021.

It is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR or whether any additional reforms to LIBOR may be enacted in the United Kingdom or elsewhere.

Actions by the British Bankers Association, the United Kingdom Financial Conduct Authority or other regulators or law enforcement agencies as a result of these or future events, may result in changes to the manner in which LIBOR is determined.

In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR.

At this time, no consensus exists as to what rate or rates will become accepted alternatives to LIBOR, although on July 29, 2021, the Alternative Reference Rates Committee, a U.S.-based steering committee composed of large US financial institutions convened by the U.S. Federal Reserve Board and the Federal Reserve Bank of New York, formally recommended SOFR Term rates.

Given the inherent differences between LIBOR and SOFR, or any other alternative benchmark rate that is established, there are many uncertainties regarding a transition from LIBOR, including how this will impact the cost of our variable rate debt and certain derivative financial instruments, or whether the COVID-19 pandemic will have further effect on LIBOR transition plans.

In addition, although financial institutions are increasingly utilizing SOFR in credit facilities, it is unknown whether SOFR or any other alternative reference rate will attain market acceptance as a replacement for LIBOR.

Our $2.5 Billion Credit Agreement includes provisions that grant the administrative agent discretion to establish a replacement rate for LIBOR, if necessary, which could increase our short-term borrowing costs for amounts issued under this facility.

borrowing costs could increase, which would affect adversely our financial results, and our potential pool of investors and funding sources could decrease.

are not guarantors.

renegotiation or rejection under applicable provisions of the United States Bankruptcy Code.

As a result of these ethane economics, ethane volumes on our system can [removed: fluctuate period to period.][added: fluctuate.]

Ethane volumes under long-term contracts delivered to our NGL system increased approximately [removed: 55] [added: 20] MBbl/d to an average of [removed: 430] [added: 450] MBbl/d in [removed: 2021,] [added: 2022,] compared with [removed: 375] [added: 430] MBbl/d in [removed: 2020,] [added: 2021,] due primarily to changes in ethane extraction economics.

Growth Projects \- We operate an integrated, reliable and diversified network of NGL and natural gas gathering, processing, fractionation, [removed: storage and] transportation [added: and storage] assets connecting supply in the Rocky Mountain, Mid-Continent and Permian regions with key market centers.

Our [removed: publicly announced] [added: primary] capital-growth projects are outlined in the table below:

| Demicks Lake III plant | | | 200 MMcf/d processing plant in the core of the Williston Basin | | | $188 [removed: (b)] | | | [removed: First Quarter 2023] [added: Completed] | | |

| MB-5 fractionator | | | 125 MBbl/d NGL fractionator in Mont Belvieu, Texas | | | $750 [removed: (c)] | | | [removed: Third] [added: Second] Quarter 2023 | | |

Debt [removed: Repayments \-] [added: Repayments -] In [removed: November 2021,] [added: July 2022,] we redeemed the remaining [removed: $536.1] [added: $895.8] million of our [removed: $700 million, 4.25%] [added: 3.375%] senior notes due [removed: February] [added: October] 2022 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand and short-term borrowings.

Dividends - During [removed: 2021,] [added: 2022,] we paid common stock dividends totaling $3.74 per share, which is consistent with the prior year.

In February [removed: 2022,] [added: 2023,] we paid a quarterly common stock dividend of [removed: $0.935] [added: $0.955] per share [removed: ($3.74] [added: ($3.82] per share on an annualized basis), [removed: which is consistent] [added: an increase of 2% compared] with the same quarter in the prior year.

Selected Financial Results - The following table sets forth certain selected [removed: consolidated] financial results for the periods indicated:

| | | | | | | Years Ended December 31, | | | | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | |

| Financial Results | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | $ Increase (Decrease) | | | | | | | | |

| Commodity sales | | | | | | $ | [removed: 15,180.3] [added: 20,975.5] | | | | | $ | [removed: 7,255.2] [added: 15,180.3] | | | | | $ | [removed: 8,916.1] [added: 7,255.2] | | | | | [removed: 7,925.1] [added: 5,795.2] | | | | | | [removed: (1,660.9)] [added: 7,925.1] | | |

| Services | | | | | | [removed: 1,360.0] [added: 1,411.4] | | | | | | [removed: 1,287.0] [added: 1,360.0] | | | | | | [removed: 1,248.3] [added: 1,287.0] | | | | | | [removed: 73.0] [added: 51.4] | | | | | | [removed: 38.7] [added: 73.0] | | |

| Total revenues | | | | | | [removed: 16,540.3] [added: 22,386.9] | | | | | | [removed: 8,542.2] [added: 16,540.3] | | | | | | [removed: 10,164.4] [added: 8,542.2] | | | | | | [removed: 7,998.1] [added: 5,846.6] | | | | | | [removed: (1,622.2)] [added: 7,998.1] | | |

| Cost of sales and fuel (exclusive of items shown separately below) | | | | | | [removed: 12,256.7] [added: 17,909.9] | | | | | | [removed: 5,110.1] [added: 12,256.7] | | | | | | [removed: 6,788.0] [added: 5,110.1] | | | | | | [removed: 7,146.6] [added: 5,653.2] | | | | | | [removed: (1,677.9)] [added: 7,146.6] | | |

| Operating costs | | | | | | [removed: 1,067.0] [added: 1,149.7] | | | | | | [removed: 886.1] [added: 1,067.0] | | | | | | [removed: 982.9] [added: 886.1] | | | | | | [removed: 180.9] [added: 82.7] | | | | | | [removed: (96.8)] [added: 180.9] | | |

| Depreciation and amortization | | | | | | [removed: 621.7] [added: 626.1] | | | | | | [removed: 578.7] [added: 621.7] | | | | | | [removed: 476.5] [added: 578.7] | | | | | | [removed: 43.0] [added: 4.4] | | | | | | [removed: 102.2] [added: 43.0] | | |

| Impairment charges | | | | | | — | | | | | | [removed: 607.2] [added: —] | | | | | | [removed: —] [added: 607.2] | | | | | | [removed: (607.2)] [added: —] | | | | | | [removed: 607.2] [added: (607.2)] | | |

| Operating income | | | | | | $ | [removed: 2,596.3] [added: 2,807.4] | | | | | $ | [removed: 1,361.4] [added: 2,596.3] | | | | | $ | [removed: 1,914.4] [added: 1,361.4] | | | | | [removed: 1,234.9] [added: 211.1] | | | | | | [removed: (553.0)] [added: 1,234.9] | | |

| Equity in net earnings from investments | | | | | | $ | [removed: 122.5] [added: 147.7] | | | | | $ | [removed: 143.2] [added: 122.5] | | | | | $ | [removed: 154.5] [added: 143.2] | | | | | [removed: (20.7)] [added: 25.2] | | | | | | [removed: (11.3)] [added: (20.7)] | | |

| Impairment of equity investments | | | | | | $ | — | | | | | $ | [removed: (37.7)] [added: —] | | | | | $ | [removed: —] [added: (37.7)] | | | | | [removed: (37.7)] [added: —] | | | | | | [removed: 37.7] [added: (37.7)] | | |

| Interest expense, net of capitalized interest | | | | | | $ | [removed: (732.9)] [added: (675.9)] | | | | | $ | [removed: (712.9)] [added: (732.9)] | | | | | $ | [removed: (491.8)] [added: (712.9)] | | | | | [removed: 20.0] [added: (57.0)] | | | | | | [removed: 221.1] [added: 20.0] | | |

| Net income | | | | | | $ | [removed: 1,499.7] [added: 1,722.2] | | | | | $ | [removed: 612.8] [added: 1,499.7] | | | | | $ | [removed: 1,278.6] [added: 612.8] | | | | | [removed: 886.9] [added: 222.5] | | | | | | [removed: (665.8)] [added: 886.9] | | |

| Diluted EPS | | | | | | $ | [removed: 3.35] [added: 3.84] | | | | | $ | [removed: 1.42] [added: 3.35] | | | | | $ | [removed: 3.07] [added: 1.42] | | | | | [removed: 1.93] [added: 0.49] | | | | | | [removed: (1.65)] [added: 1.93] | | |

| Adjusted EBITDA | | | | | | $ | [removed: 3,379.7] [added: 3,619.7] | | | | | $ | [removed: 2,723.7] [added: 3,379.7] | | | | | $ | [removed: 2,580.2] [added: 2,723.7] | | | | | [removed: 656.0] [added: 240.0] | | | | | | [removed: 143.5] [added: 656.0] | | |

| Capital expenditures | | | | | | $ | [removed: 696.9] [added: 1,202.1] | | | | | $ | [removed: 2,195.4] [added: 696.9] | | | | | $ | [removed: 3,848.3] [added: 2,195.4] | | | | | [removed: (1,498.5)] [added: 505.2] | | | | | | [removed: (1,652.9)] [added: (1,498.5)] | | |

Changes in commodity prices and sales volumes affect both revenues and cost of sales and fuel in our Consolidated Statements of [removed: Income,] [added: Income] and, therefore, the impact is largely offset between these line [removed: items.][added: items, except where noted.]

[removed: 2021] [added: 2022] vs. [removed: 2020 -] [added: 2021 \-] Operating income increased [removed: $1.2 billion] [added: $211.1 million] primarily as a result of the following:

[removed: - *Natural Gas Liquids* - increases of $421.4] [added: ◦$50.1] million in [removed: exchange services related primarily to] higher volumes [added: primarily] in the Rocky Mountain [removed: region, the Mid-Continent] region and Permian [removed: Basin and wider commodity price differentials, and $98.3 million] [added: Basin, offset partially by lower volumes] in [removed: optimization and marketing.][added: the Mid-Continent region, offset by]

[removed: These increases were offset partially by a decrease] [added: *•*an increase] of $46.2 million [removed: from] [added: in exchange services due to] the [added: unfavorable] impact of Winter Storm Uri in [removed: exchange services;][added: the first quarter 2021;]

Capital expenditures [removed: decreased] [added: increased] due primarily to [removed: our completed and paused] capital-growth [removed: projects.][added: projects, including our MB-5 fractionator.]

Additional information regarding our financial results and operating information is provided in the [removed: discussions] [added: following discussion] for each of our segments.

Selected Financial Results and Operating Information for the Year Ended December 31, [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] \- The consolidated and segment financial results and operating information for the year ended December 31, [removed: 2020,] [added: 2021,] compared with the year ended December 31, [removed: 2019,] [added: 2020,] are included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our [removed: 2020] [added: 2021] Annual Report on Form 10-K, which is available via the SEC’s website at www.sec.gov and our website at www.oneok.com.

| NGL and condensate sales | | | | | | $ | [removed: 2,821.2] [added: 3,690.2] | | | | | $ | [removed: 889.4] [added: 2,821.2] | | | | | $ | [removed: 1,224.4] [added: 889.4] | | | | | [removed: 1,931.8] [added: 869.0] | | | | | | [removed: (335.0)] [added: 1,931.8] | | |

| Residue natural gas sales | | | | | | [removed: 1,483.9] [added: 2,674.4] | | | | | | [removed: 771.5] [added: 1,483.9] | | | | | | [removed: 966.1] [added: 771.5] | | | | | | [removed: 712.4] [added: 1,190.5] | | | | | | [removed: (194.6)] [added: 712.4] | | |

| Gathering, compression, dehydration and processing fees and other revenue | | | | | | [removed: 156.4] [added: 168.9] | | | | | | [removed: 159.2] [added: 156.4] | | | | | | [removed: 178.1] [added: 159.2] | | | | | | [removed: (2.8)] [added: 12.5] | | | | | | [removed: (18.9)] [added: (2.8)] | | |

| Cost of sales and fuel (exclusive of depreciation and operating costs) | | | | | | [removed: (3,226.1)] [added: (5,116.6)] | | | | | | [removed: (844.0)] [added: (3,226.1)] | | | | | | [removed: (1,302.3)] [added: (844.0)] | | | | | | [removed: 2,382.1] [added: 1,890.5] | | | | | | [removed: (458.3)] [added: 2,382.1] | | |

| Operating costs, excluding noncash compensation adjustments | | | | | | [removed: (351.4)] [added: (386.6)] | | | | | | [removed: (320.0)] [added: (351.4)] | | | | | | [removed: (352.8)] [added: (320.0)] | | | | | | [removed: 31.4] [added: 35.2] | | | | | | [removed: (32.8)] [added: 31.4] | | |

| Equity in net earnings (loss) from investments | | | | | | [removed: 3.8] [added: 4.9] | | | | | | [removed: (1.1)] [added: 3.8] | | | | | | [removed: (6.3)] [added: (1.1)] | | | | | | [removed: 4.9] [added: 1.1] | | | | | | [removed: 5.2] [added: 4.9] | | |

Market Conditions - We experienced earnings growth in 2022, compared with 2021, due primarily to increased producer activity across our operations, higher realized commodity prices, net of hedging and higher average fee rates.

In 2023, we expect to benefit from higher volumes, our completed Demicks Lake III natural gas processing plant and the expected completion of our MB-5 NGL fractionator, highlighting our extensive and integrated assets that are located in some of the most productive shale basins in the United States.

Medford Incident \- On July 9, 2022, a fire occurred at our 210 MBbl/d Medford, Oklahoma, natural gas liquids fractionation facility.

All personnel were safe and accounted for with temporary evacuations of local residents taken as a precautionary measure.

Net income for the year ended December 31, 2022, includes the unfavorable impact of our $5 million property deductible and approximately $30 million of losses incurred associated with the 45-day waiting period for business interruption coverage.

Beginning in August 2022, we developed claims related to the Medford incident and recorded accruals for expected insurance recoveries.

The table below sets forth our 2022 insurance accruals associated with the Medford incident:

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 2022 Insurance Accruals | | | | | | | | |

| | | | | | | *(Millions of dollars)* | | |

| Business interruption | | | | | | $ | 96.1 | |

| Noncash property losses | | | | | | 45.6 | | |

| Medford response expenses | | | | | | 9.0 | | |

| Total insurance recoveries accrued (a) | | | | | | $ | 150.7 | |

(a) - We received a $100 million payment in the fourth quarter 2022, leaving a receivable balance at December 31, 2022, of $50.7 million.

Our business interruption insurance includes coverage for (i) incurred costs and losses that are either unavoidable or incurred to mitigate or reduce losses and (ii) lost earnings.

Our business interruption insurance accruals in the table above primarily represent third-party fractionation costs and fully offset the actual losses incurred in 2022, subsequent to the 45-day waiting period.

We assessed the property damage to our facility and wrote off assets totaling $45.6 million, which represents the carrying value associated with certain damaged Medford facility property.

These noncash property losses are fully offset by insurance recoveries noted in the table above.

We expect to continue to operate NGL pipeline assets in Medford along with existing offices for regional operations.

In addition, we are preserving certain Medford assets for future potential NGL facilities that could be constructed in Medford to enhance our NGL business as the market evolves.

For additional information on the Medford incident, see Note B of the Notes to Consolidated Financial Statements in this Annual Report.

Subsequent Event - On January 9, 2023, we reached an agreement with our insurers to settle all claims for physical damage and business interruption related to the Medford incident.

Under the terms of the settlement agreement, we agreed to resolve the claims for total insurance payments of $930 million, $100 million of which was received in 2022.

The remaining $830 million was received in the first quarter 2023.

The proceeds serve as settlement for property damage, business interruption claims to the date of settlement and as payment in lieu of future business interruption insurance claims.

In the first quarter 2023, we applied the $830 million received to our outstanding insurance receivable at December 31, 2022, of $50.7 million, and recorded a gain in operating income for the remaining $779.3 million.

We expect our cash from operations in the remainder of 2023 and in 2024 to be impacted by incurred costs and losses resulting from the Medford incident for which we will no longer receive business interruption proceeds.

Due to market demand and a more favorable completion schedule, we announced plans to construct a new 125 MBbl/d MB-6 NGL fractionator in Mont Belvieu, Texas, instead of rebuilding our Medford NGL fractionator at this time.

The MB-6 fractionator will have the capability to produce purity ethane instead of the ethane/propane mix previously produced at the Medford facility.

The 125 MBbl/d capacity of the MB-6 fractionator is expected to be economically equivalent to the capacity lost at Medford.

In addition, our 125 MBbl/d MB-5 NGL fractionator remains on schedule to be completed early in the second quarter of 2023, which is expected to reduce the need for third-party fractionation while the new MB-6 fractionator is being constructed.

Until these projects are completed, we expect to continue to provide midstream services through existing arrangements with industry peers, along with our integrated NGL pipeline system between the Mid-Continent and Gulf Coast regions and our fractionation and storage assets.

In the second half of 2022, ethane prices decreased relative to natural gas prices, as overall demand decreased, and were further impacted by lower petrochemical plant utilization, both planned and unplanned.

This resulted in higher ethane rejection across most basins where we operate, with the largest impact in the Mid-Continent region, compared with the first half of 2022.

As utilization increases and demand for feedstock returns, we expect improvement in ethane economics; however, price fluctuations are expected to continue.

| MB-6 fractionator | | | 125 MBbl/d NGL fractionator in Mont Belvieu, Texas | | | $550 | | | First Quarter 2025 | | |

| Natural Gas Pipelines | | | | | | | | | | | |

| Viking compressor stations | | | Electrification and replacement of certain compressor assets | | | $95 | | | Third Quarter 2023 | | |

Market Conditions - We experienced earnings growth from increased volumes in 2021, compared with 2020, due primarily to increased producer activity and rising gas-to-oil ratios in the Rocky Mountain region, production curtailments in 2020, increased ethane production in the Rocky Mountain region and higher commodity prices in both our Natural Gas Gathering and Processing and Natural Gas Liquids segments, highlighting both the resiliency of our integrated assets and the economic recovery from the pandemic.

Ethane recovery opportunities will fluctuate based on regional natural gas pricing and ethane economics.

| Bear Creek plant expansion and related infrastructure | | | 200 MMcf/d processing plant expansion and related gathering infrastructure in the Williston Basin | | | $405 | | | Completed | | |

| | | | Supported by acreage dedications with long-term primarily fee-based contracts | | | | | | | | |

| Arbuckle II pipeline expansion | | | Increased mainline capacity with additional pump facilities | | | $60 | | | Completed | | |

| Increased capacity to 500 MBbl/d | | | | | | | | | | | |

(b) - In November 2021, we announced that we restarted construction of the Demicks Lake III natural gas processing plant.

Upon announcement, the expected cost to complete was approximately $140 million.

(c) - In November 2021, we announced that we restarted construction of the MB-5 NGL fractionator.

Upon announcement, the expected cost to complete was approximately $250 million.

In June 2021, we repaid the remaining $11.7 million of Guardian Pipeline’s senior notes due December 2022 with cash on hand.

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

In 2021, we repurchased in the open market outstanding principal of certain of our senior notes in the amount of $55.2 million for an aggregate repurchase price of $54.6 million with cash on hand.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| (Gain) loss on sale of assets | | | | | | (1.4) | | | | | | (1.3) | | | | | | 2.6 | | | | | | 0.1 | | | | | | 3.9 | | |

*•*an increase of $607.2 million due to noncash impairment charges in our Natural Gas Gathering and Processing and Natural Gas Liquids segments in 2020;

*•Natural Gas Gathering and Processing* - increases of $143.5 million due primarily to lower realized prices in 2020 impacting our fee with POP contracts and $115.8 million from higher volumes due primarily to increased production and rising gas-to-oil ratios in the Rocky Mountain region in 2021 and production curtailments in 2020; *and*

- *Natural Gas Pipelines* - an increase of $109.1 million due to primarily to increased natural gas sales; *offset by*

- an increase of $180.9 million in consolidated operating costs due primarily to higher employee costs related to short-term incentives, property taxes, outside services and the impact of a loss on the mark-to-market of our share-based deferred compensation plan in 2021 compared with a benefit in 2020; *and*

- an increase of $43.0 million in depreciation expense due to capital projects placed in service.

Net income and diluted EPS increased due primarily to the items discussed above and noncash impairment charges related to equity investments in our Natural Gas Gathering and Processing and Natural Gas Liquids segments in the prior year.

These increases were offset partially by higher income taxes, higher interest expense related to lower capitalized interest and lower equity AFUDC due to completed projects, lower equity in net earnings from investments and a gain in 2020 on extinguishment of debt related to open market repurchases.

- an increase of $7.3 million from a gain on the partial sale of an equity investment; *offset by*

- an increase of $31.4 million in operating costs due primarily to higher employee costs related to short-term incentives.

Capital expenditures decreased due primarily to completed capital-growth projects in 2020.

Our average fee rate increased due primarily to production curtailments in the second quarter 2020 on producer contracts with higher fees and lower POP components in the Rocky Mountain region.

As these curtailed volumes have returned to our system and producer activity has continued to increase, the Rocky Mountain region’s contribution to our average fee rate increased in 2021.

Impairments - The year ended December 31, 2020, includes $382.2 million of noncash impairment charges related primarily to certain long-lived asset groups in the Powder River Basin, western Oklahoma and Kansas that were not recoverable, a

$153.4 million noncash impairment charge related to goodwill and a $30.5 million noncash impairment charge related to our 10.2% investment in Venice Energy Services Company.

◦$261.6 million in higher volumes primarily in the Rocky Mountain region, Mid-Continent region and Permian Basin, offset partially by lower volumes in the Barnett Shale,

◦$98.9 million related to wider commodity price differentials,

◦$63.8 million in lower transportation costs in the Rocky Mountain region, and

- the negative impact of Winter Storm Uri of $46.2 million in exchange services due primarily to decreased volumes across our operations and higher electricity costs;

Capital expenditures decreased due primarily to completed and paused capital-growth projects in 2020.

2021 vs. 2020 - Volumes increased due primarily to increased production primarily in the Rocky Mountain region, Mid-Continent region and Permian Basin, increased ethane production in the Rocky Mountain region, and the impact of curtailed production across our system in 2020, offset partially by the impact of Winter Storm Uri in 2021 and lower volumes in the Barnett Shale.

Impairments - The year ended December 31, 2020, includes $71.6 million of noncash impairment charges related primarily to certain inactive assets and a $7.2 million noncash impairment charge related to our 50% investment in Chisholm Pipeline Company.

Roadrunner, in which we have a 50% ownership interest, has contracted all of its westbound capacity through 2041.

Northern Border Pipeline, in which we have a 50% ownership interest, has contracted substantially all of its long-haul transportation capacity through the fourth quarter 2022.

In February 2021, our subsidiary, Midwestern Gas Transmission Company (Midwestern), filed a proposed change in rates pursuant to Section 4 of the Natural Gas Act with the FERC.

In February 2022, Midwestern filed a Stipulation and Offer of Settlement with the FERC for approval.

As part of our hedging strategy, we use commodity derivative financial instruments and physical-forward contracts described in Note [removed: C] [added: D] of the Notes to Consolidated Financial Statements in this Annual Report to reduce the impact of near-term price fluctuations of natural gas, NGLs and condensate.

Under certain fee with POP contracts, our contractual fees and POP percentage may increase or decrease if [added: production volumes, delivery pressures or commodity prices change relative to specified thresholds.]

| Commodity Contracts | | | December 31, [removed: 2021] [added: 2022] | | | | | | December 31, [removed: 2020] [added: 2021] | | |

| Crude oil and NGLs | | | $ | [removed: 40.6] [added: 34.6] | | | | | $ | [removed: 20.0] [added: 40.6] | |

| Natural gas | | | [removed: 11.5] [added: 18.0] | | | | | | [removed: 10.6] [added: 11.5] | | |

| Total change in estimated fair value of commodity contracts | | | $ | [removed: 52.1] [added: 52.6] | | | | | $ | [removed: 30.6] [added: 52.1] | |

Our sensitivity analysis represents an estimate of the reasonably possible gains and losses that would be recognized on our commodity derivative contracts assuming hypothetical movements in future market prices and is not necessarily indicative of [removed: actual results that may occur.]

The following tables set forth hedging information for our Natural Gas Gathering and Processing segment’s forecasted equity volumes for the [removed: periods] [added: period] indicated:

| | | | | | | Year Ending December 31, [removed: 2022] [added: 2024] | | | | | | | | | | | | | | | | | |

| NGLs - excluding ethane (*MBbl/d*) - Conway/Mont Belvieu | | | | | | [removed: 11.7] [added: 10.7] | | | | | | $ | [removed: 0.96] [added: 1.23] | | / gallon | | | | | | [removed: 69%] [added: 67%] | | |

| Condensate (*MBbl/d*) - WTI-NYMEX | | | | | | [removed: 1.6] [added: 1.7] | | | | | | $ | [removed: 63.10] [added: 85.48] | | / Bbl | | | | | | [removed: 72%] [added: 67%] | | |

| Natural gas (*BBtu/d*) - NYMEX and basis | | | | | | [removed: 109.5] [added: 99.2] | | | | | | $ | [removed: 3.27] [added: 3.50] | | / MMBtu | | | | | | 75% | | |

| Natural gas (*BBtu/d*) - NYMEX and basis | | | | | | [removed: 17.3] [added: 16.2] | | | | | | $ | [removed: 5.06] [added: 7.18] | | / MMBtu | | | | | | 11% | | |

Our Natural Gas Gathering and Processing segment’s commodity price sensitivity is estimated as a hypothetical change in the price of NGLs, crude oil and natural gas at December 31, [removed: 2021.][added: 2022.]

- a $0.01 per gallon change in the composite price of NGLs, excluding ethane, would change adjusted EBITDA for the years ending December 31, [removed: 2022] [added: 2023] and [removed: 2023,] [added: 2024,] by [removed: $2.6] [added: $2.5] million and [removed: $2.7] [added: $2.6] million, respectively;

- a $1.00 per barrel change in the price of crude oil would change adjusted EBITDA for the years ending December 31, [removed: 2022] [added: 2023] and [removed: 2023,] [added: 2024,] by [removed: $0.8] [added: $0.9] million and [removed: $0.9] [added: $1.0] million, respectively; and

- a $0.10 per MMBtu change in the price of residue natural gas would change adjusted EBITDA for the years ending December 31, [removed: 2022] [added: 2023] and [removed: 2023,] [added: 2024,] by [removed: $5.3] [added: $4.8] million and [removed: $5.5] [added: $5.2] million, respectively.

We may manage interest-rate risk through the use of fixed-rate debt, floating-rate debt and [removed: interest-][added: interest-rate swaps.]

At December 31, [removed: 2021] [added: 2022,] and [removed: 2020,] [added: December 31, 2021,] we had forward-starting interest-rate swaps with notional amounts totaling [removed: $1.1] [added: $0.4] billion [added: and $1.1 billion, respectively,] to hedge the variability of interest payments on a portion of our forecasted debt issuances.

At December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] we had derivative [removed: liabilities] [added: assets] of [removed: $145.5] [added: $10.9] million and [removed: $203.4] [added: derivative liabilities of $145.5] million, respectively, related to these interest-rate swaps.

| | | | December 31, [removed: 2021] [added: 2022] | | | | | | December 31, [removed: 2020] [added: 2021] | | |

| Forward-starting interest-rate swaps | | | $ | [removed: 19.6] [added: 13.0] | | | | | $ | [removed: 12.9] [added: 19.6] | |

See Note [removed: C] [added: D] of the Notes to Consolidated Financial Statements in this Annual Report for more information on our hedging activities.

In [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] approximately [removed: 90%] [added: 95% and 90%, respectively,] of the downstream commodity sales in our Natural Gas Gathering and Processing segment were made to customers rated investment-grade by S&P, approved through comparable internal counterparty analysis, or were secured by letters of credit or other collateral.

We also earn sales revenue on the downstream sales of [removed: NGL products.][added: purity NGLs.]

In [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] approximately [removed: 70%] [added: 85%] and [removed: 75%,] [added: 70%,] respectively, of this segment’s commodity sales were made to customers rated investment-grade by S&P, approved through comparable internal counterparty analysis, or were secured by letters of credit or other collateral.

In [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] approximately [removed: 85%] [added: 90% and 85%, respectively,] of our revenues in this segment were from customers rated investment-grade by S&P, approved through comparable internal counterparty analysis, or were secured by letters of credit or other collateral.

actual results that may occur.

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| | | | | | | | | | | | | | | | | | | | | | | | |

In 2022, we settled $750 million of our forward-starting interest-rate swaps related to our underwritten public offering of $750 million senior unsecured notes, resulting in a gain of $28.1 million, which is included in accumulated other comprehensive loss and amortized into interest expense over the term of the related debt.

In December 2022, we terminated the remaining $375 million of our forward-starting interest swaps that had mandatory termination dates of December 31, 2022.

We simultaneously entered into forward-starting interest-rate swaps with the same notional amounts at current market rates to hedge the variability of interest payments on a portion of our forecasted debt issuances that may result from changes in the benchmark interest rate before the debt is issued.

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

production volumes, delivery pressures or commodity prices change relative to specified thresholds.

In certain commodity price environments, our contractual fees on these fee with POP contracts may decrease, which would impact the average fee rate in our Natural Gas Gathering and Processing segment.

| NGLs - excluding ethane (*MBbl/d*) - Conway/Mont Belvieu | | | | | | 0.9 | | | | | | $ | 1.11 | | / gallon | | | | | | 5% | | |

| Condensate (*MBbl/d*) - WTI-NYMEX | | | | | | 0.2 | | | | | | $ | 74.95 | | / Bbl | | | | | | 7% | | |

rate swaps.

We are incorporated under the laws of the state of Oklahoma, and our common stock is listed on the NYSE under the trading symbol “OKE.” We are a leading midstream service provider and own one of the nation’s premier NGL systems, connecting NGL supply in the Rocky Mountain, Permian and Mid-Continent regions with key market centers and own an extensive network of [removed: natural gas] gathering, processing, [removed: storage and] [added: fractionation,] transportation [added: and storage] assets.

| | | | Legend | | | | | | | | | [removed: ] [added: ] | | | | | |

| | | | | | | | | | | | | We are connected to supply in natural gas and NGL producing basins and have significant basin diversification, including the Williston, Permian, Powder River and DJ [removed: Basins] [added: Basins,] and the [removed: STACK and] SCOOP [added: and STACK] areas. In our Natural Gas Gathering and Processing segment, we have more than 3 million dedicated acres in the Williston Basin and approximately 300,000 dedicated acres in the [removed: STACK and] SCOOP [added: and STACK] areas. In our Natural Gas Liquids segment, we are the largest NGL takeaway provider in the Williston and Powder River Basins; Oklahoma, including the [removed: STACK and] SCOOP [added: and STACK] areas; Kansas; and the Texas Panhandle. We also have a significant presence in the Permian Basin. | | | | | |

| | | | | | | | | | | | | [removed: ] [added: ] | | | | | |

| NGLs extracted at [added: natural gas] processing plants, both third-party and our own, are then gathered by our NGL gathering pipelines. | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | Residue natural gas is transported to storage facilities and end users, such as large industrial customers, natural gas and electric utilities serving commercial and residential consumers, and [added: can ultimately reach] international markets through liquefied natural gas exports and cross-border pipelines. | | | | | |

Although the energy industry has experienced many [removed: up and down] [added: commodity] cycles, we have positioned ourselves to reduce exposure to direct commodity price volatility.

Each of our three segments are primarily fee-based, and our consolidated earnings were approximately 90% fee-based in [removed: 2021.][added: 2022.]

While our Natural Gas Gathering and Processing segment’s earnings are primarily fee-based, we have direct commodity price exposure related primarily to [added: our] fee with POP [removed: contracts.][added: contracts, and we have hedged approximately 70% of our forecasted equity volumes for 2023.]

In addition, our Natural Gas Gathering and Processing and Natural Gas Liquids segments are exposed to volumetric risk as a result of drilling and [added: well] completion activity, [removed: normal volumetric well decline,] severe weather [removed: disruption,] [added: disruptions,] operational [removed: outages and] [added: outages, global] crude oil, NGL and natural gas [removed: demand.][added: demand, changes in gas-to-oil ratios and normal volumetric well declines.]

Our Natural Gas Pipelines segment is not exposed to significant volumetric risk due to nearly all of our capacity being subscribed under [removed: long-term] [added: long-term,] firm fee-based contracts.

We [removed: began implementing] [added: successfully implemented] our return to office plan in early 2022, and we [removed: will continue] [added: have continued] to take safety precautions for our employees who work in the field or report to a ONEOK facility.

Sustainability and Social [removed: Responsibility -] [added: Responsibility \-] In [removed: 2021 and 2022,] [added: 2023,] we qualified for inclusion in the S&P Global Sustainability [removed: Yearbook.][added: Yearbook for the third year in a row.]

We continue to look for ways to reduce our [removed: environmental impact] [added: GHG emissions] and utilize more efficient technologies.

In September 2021, we announced a [removed: 30%] [added: companywide] absolute GHG emissions reduction [removed: target, or] [added: target of] 2.2 million metric [removed: tons,] [added: tons] of [added: carbon dioxide equivalents from] our combined Scope 1 and Scope 2 [added: GHG] emissions by [removed: 2030, compared with 2019 base-year levels.][added: 2030.]

Natural Gas - In our Natural Gas Gathering and Processing segment, [removed: gathered and processed volumes in the Rocky Mountain region] [added: we benefited from] increased [added: volumes, higher realized commodity prices, net of hedging, and higher average fee rates] in [removed: 2021,] [added: 2022,] compared with [removed: 2020,] [added: 2021,] due primarily to increased producer [removed: activity, rising gas-to-oil ratios] [added: activity in the Rocky Mountain] and [added: Mid-Continent regions, offset partially by] the impact of [removed: curtailed production] [added: winter weather] in [removed: 2020.][added: the Rocky Mountain region in 2022.]

[removed: Upon] [added: We expect additional earnings benefit in 2023 due to the] completion of [added: our 200 MMcf/d] Demicks Lake [removed: III, which is expected] [added: III natural gas processing plant] in the first [removed: quarter 2023,] [added: quarter, which increased] our total processing capacity [removed: will be] [added: to] approximately 1.9 Bcf/d in the Williston Basin.

[added: Overview -] In our Natural Gas Pipelines segment, our assets are connected to key supply areas and demand centers, including export markets in Mexico via Roadrunner and supply areas in Canada and the United States via our interstate and intrastate [removed: natural gas pipelines and Northern Border Pipeline, which enable us to provide essential natural gas transportation and storage services.]

NGLs - In our Natural Gas Liquids segment, [removed: NGL volumes] [added: we benefited from] increased [added: volumes and higher average fee rates] in [removed: 2021,] [added: 2022,] compared with [removed: 2020, due primarily to] [added: 2021, from] increased production in the Rocky Mountain [removed: region, Mid-Continent] region and [added: the] Permian Basin, [removed: increased ethane production in the Rocky Mountain region and the impact of curtailed production across our system in 2020,] offset partially by [removed: the impact of Winter Storm Uri in 2021 and lower volumes in the Barnett Shale.][added: higher costs.]

- Zero incidents - we commit to [added: developing processes to drive] a zero-incident culture for the well-being of our employees, contractors and communities.

Safety and environmental responsibility continue to be [removed: a] primary [added: areas of] focus for us, and our emphasis on [removed: personal and process] safety has produced improving trends in the key indicators we track.

[added: We] believe our internally generated cash flows will allow us to fund capital-growth projects in our existing operating regions and to provide value-added products and services that contribute to long-term growth, profitability and [removed: business diversification.]

Producing consistent and strong returns on invested capital will allow us to not only reward our [removed: shareholders,] [added: shareholders] but also provide the means and opportunity to serve our additional stakeholders, including employees, communities and the environment.

[removed: ][added: ]

The Powder River Basin is primarily located in Wyoming, which includes the NGL-rich Niobrara Shale and [removed: Frontier, Turner] [added: Frontier] and [removed: Sussex] [added: Turner] formations where we provide gathering and processing services to customers in the eastern portion of [removed: Wyoming.][added: the state.]

*Mid-Continent region* - The Mid-Continent region includes the oil-producing, NGL-rich [removed: STACK and] SCOOP [removed: areas] and [added: STACK areas including] the Cana-Woodford Shale, Woodford Shale, Springer Shale, Meramec, Granite Wash and Mississippian Lime formations of Oklahoma and [removed: Kansas, and] the Hugoton [removed: Basin.][added: Basin in Kansas.]

[removed: ][added: ]

- [removed: 17,500] [added: 17,200] miles of natural gas gathering pipelines;

- [removed: 13] [added: 14] natural gas processing plants with [removed: 1.7] [added: 1.9] Bcf/d of processing capacity in the Rocky Mountain region, and nine natural gas processing plants with 0.9 Bcf/d of processing capacity in the Mid-Continent region, and up to 150 MMcf/d of processing capacity in the Mid-Continent region through a long-term processing services agreement with an unaffiliated third party; and

We [removed: are in] [added: recently completed] the [removed: process] [added: construction] of [removed: constructing] our 200 MMcf/d Demicks Lake III natural gas processing plant in the Williston Basin, which is [removed: not] included in the assets listed above.

After performing these services, we sell the commodities and remit a portion of the commodity sales [removed: proceeds to the producer less our contractual fees.]

Utilization - The utilization rates for our natural gas processing plants were [removed: 69%] [added: 70%] and [removed: 66%] [added: 69%] for [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively, [removed: which includes 81% and 70%] [added: due primarily to increased producer activity] in the Rocky Mountain region [removed: for 2021] and [removed: 2020, respectively.][added: the SCOOP and STACK areas of Oklahoma.]

See Note [removed: M] [added: N] of the Notes to Consolidated Financial Statements in this Annual Report for additional discussion of our unconsolidated affiliates.

We believe our natural gas gathering [removed: facilities] [added: facilities,] upstream of our natural gas processing [removed: plants] [added: plants,] meet the criteria used by the FERC for [removed: nonjurisdictional] [added: non-jurisdictional] natural gas gathering facility status.

Overview - Our Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store [removed: NGL products,] [added: purity NGLs,] primarily in Oklahoma, Kansas, Texas, New Mexico and the Rocky Mountain region, which includes the Williston, Powder River and DJ Basins.

We own or have an ownership interest in FERC-regulated NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming and Colorado, and terminal and storage facilities in Kansas, [removed: Missouri,] Nebraska, Iowa and Illinois.

We have a 50% ownership interest in Overland [removed: Pass Pipeline Company,] [added: Pass,] which operates an interstate NGL pipeline originating in Wyoming and Colorado and terminating in Kansas.

We also own FERC-regulated NGL distribution pipelines in Kansas, [removed: Missouri,] Nebraska, Iowa, Illinois and Indiana that connect our Mid-Continent assets with Midwest markets, including Chicago, Illinois.

[removed: ][added: ]

- [removed: 9,120] [added: 9,140] miles of gathering pipelines with operating capacity of 1,790 MBbl/d, including [removed: 6,330] [added: 6,350] miles of FERC-regulated pipelines with operating capacity of 1,490 MBbl/d;

Business Update and Market Conditions - We experienced earnings growth in 2022, compared with 2021, due primarily to increased producer activity across our operations, higher realized commodity prices, net of hedging, and higher average fee rates.

In 2023, we expect to benefit from higher volumes, our completed Demicks Lake III natural gas processing plant and the expected completion of our MB-5 NGL fractionator, highlighting our extensive and integrated assets that are located in some of the most productive shale basins in the United States.

Medford Incident - On July 9, 2022, a fire occurred at our 210 MBbl/d Medford, Oklahoma, NGL fractionation facility.

All personnel were safe and accounted for with temporary evacuations of local residents taken as a precautionary measure.

On January 9, 2023, we reached an agreement with our insurers to settle all claims for physical damage and business interruption related to the Medford incident.

Under the terms of the settlement agreement, we agreed to resolve the claims for total insurance payments of $930 million, $100 million of which was received in 2022.

The remaining $830 million was received in the first quarter 2023.

The proceeds serve as settlement for property damage, business interruption claims to the date of the settlement and as payment in lieu of future business interruption insurance claims.

Subsequent to settling the insurance claims, we announced plans to construct MB-6, a new 125 MBbl/d NGL fractionator in Mont Belvieu, Texas.

See Part II, Item 7, Recent Developments, in this Annual Report for more information on the Medford incident.

Geopolitical events and supply chain - Geopolitical events have disrupted global supply chains and caused volatile commodity prices for natural gas, NGLs and crude oil.

The United States has banned the import of oil and other energy commodities from Russia, and European countries have taken steps to reduce imports of Russian oil and natural gas.

In addition, a continued Gulf Coast liquified natural gas facility outage has further disrupted the overseas and domestic natural gas markets.

These events have highlighted the importance of a strong national energy supply and infrastructure supporting the United States economy and national security.

We operate an integrated, reliable, resilient and diversified network of NGL and natural gas gathering, processing, fractionation, transportation and storage assets connecting supply in the Rocky Mountain, Mid-Continent, Permian and Gulf Coast regions with key market centers.

We believe our assets are well positioned to provide midstream services to producers and end-use markets as they respond to domestic and international demand.

Inflation - Inflation in the United States increased significantly in late 2021 and 2022.

This rise in inflation generally resulted in higher costs in 2022.

However, many of our NGL and natural gas processing contracts include fee escalators or fuel recovery mechanisms that fully offset the increase in costs in 2022.

While we expect inflation to remain elevated, we do not expect a material impact on our results of operations as a result of these contract escalators.

Winter weather - In the second and fourth quarters of 2022, we experienced winter weather events in the Rocky Mountain region that brought disruptions to our operations.

Our employees in the region were prepared and made the necessary operational adjustments to maintain the safety of our employees, their families and our assets.

Region-wide power outages in the second quarter and blizzard conditions in both quarters negatively impacted the gathered and processed volumes in our Natural Gas Gathering and Processing segment, and NGL volumes, including volumes from third parties, delivered to and transported by our Natural Gas Liquids segment.

In 2022, we received an MSCI ESG Rating of AAA and received a perfect score of 100 in the Human Rights Campaign Corporate Equality Index.

Additionally, in 2022, our ESG Risk Rating was in the lowest-risk quintile of the Sustainalytics’ refiners and pipelines industry, indicating that our ESG risk management is in the top 20% of our industry.

The target represents a 30%

reduction in combined operational Scope 1 and location-based Scope 2 GHG emissions attributable to ONEOK assets as of December 31, 2019.

We have achieved reductions totaling approximately 0.5 million metric tons of the targeted 2.2 million metric tons of carbon dioxide equivalents, primarily as a result of methane emissions mitigation, system optimizations, electrification of certain natural gas compression equipment and lower carbon-based electricity in states in which we operate.

We are evaluating the development of renewable energy and low-carbon projects, including opportunities that may complement our extensive midstream assets and expertise.

For more information on our GHG emissions, see “GHG emissions” in the “Regulatory, Environmental and Safety Matters” section.

Capital Ventures Opportunity - In 2022, we formed a capital ventures team focused on pursuing investments in early-stage energy technology companies.

During the third quarter 2022, we reached an agreement between us, several other Oklahoma energy companies and organizations and an established energy-focused venture capital firm to commit funds of up to $50 million, collectively, toward a new venture capital fund.

We also intend to make direct equity investments in early-stage energy technology companies that help to improve our operations and are aligned with energy transformation.

We completed our first direct equity energy investment during the fourth quarter 2022 in a hyperspectral satellite company that is expected to increase our and the industry’s asset monitoring capabilities.

In our Natural Gas Pipelines segment, continued demand from local distribution companies, electric-generation facilities and large industrial companies resulted in low-cost expansions that position us well to provide additional services to our customers.

In April 2022, we completed a 1.1 Bcf expansion of our Texas natural gas storage facilities’ capacities, and the expansion is fully subscribed through 2032.

We are currently expanding the injection capabilities of our Oklahoma natural gas storage facilities which will allow us to utilize and subscribe an additional 4 Bcf of our existing storage capacity, with expected completion in the second quarter 2023.

We have subscribed 100% of the incremental 4 Bcf of storage capacity through 2027 and 90% through 2029.

In addition, we have begun the electrification of certain compression assets for Viking to improve the reliability of our operations while lowering our Scope 1 emissions from this equipment.

This project is expected to cost approximately $95 million and be completed in the third quarter 2023.

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

Business Update and Market Conditions - We experienced earnings growth from increased volumes in 2021, compared with 2020, due primarily to increased producer activity and rising gas-to-oil ratios in the Rocky Mountain region, production curtailments in 2020, increased ethane production in the Rocky Mountain region and higher commodity prices, in both our Natural Gas Gathering and Processing and Natural Gas Liquids segments, highlighting both the resiliency of our integrated assets and the economic recovery from the pandemic.

We expect volumes to increase in 2022 due to continued increases in producer activity, continued rising gas-to-oil ratios in the Rocky Mountain region, the recent completion of our Bear Creek plant expansion and increased ethane demand from the petrochemical industry.

In our Natural Gas Liquids segment, we are primarily exposed to commodity price risk resulting from the relative values of the various NGL products to each other, the value of NGLs in storage and the relative value of NGLs to natural gas.

In the first quarter 2021, Winter Storm Uri brought significant challenges to the energy industry and our operating areas.

Our employees were proactive in preparing for the severe winter weather, made the necessary adjustments to keep our assets operational and provided exceptional service to meet the needs of our customers during the difficult weather conditions.

Increased demand for natural gas, propane and electricity, coupled with supply reductions from producer wellhead freeze-offs and power outages impacting processing plants in the Mid-Continent and Rocky Mountain regions and the Permian Basin and fractionators in the Mid-Continent region, resulted in high commodity prices at certain market hubs, particularly in the Mid-Continent region and in Texas.

Commodity prices quickly returned to previous levels as the weather improved and natural gas supply returned.

Winter Storm Uri impacted all three of our operating segments, resulting in a net positive impact to our financial results, primarily in the first quarter 2021, as our ability to meet increased demand for natural gas and to provide services during the period offset the unfavorable volume impacts and higher electricity costs.

Our well-positioned natural gas storage assets and market connected pipelines in our Natural Gas Pipelines segment were able to meet critical needs during this period of severe winter weather.

The reliability of our interstate and intrastate assets, including storage, enabled us to continue to provide our customers access to transportation services, park-and-loan services and additional natural gas supply, if available, which improved our financial results.

However, this was partially offset by producer wellhead freeze-offs, which reduced February volumes in our Natural Gas Gathering and Processing and Natural Gas Liquids segments.

As we continue to monitor the COVID-19 pandemic, we remain committed to managing the impact of the pandemic on our employees.

We continue to protect our workforce and, as always, we remain focused on operating our assets safely, reliably and in an environmentally responsible manner.

ONEOK is a critical infrastructure business as defined by Homeland Security and, therefore, our workforce has remained fully engaged within federal, state and local government issued guidelines and safety-related ordinances.

We continue to apply risk-management and cybersecurity measures designed so that our systems remain functional in order to both serve our operational needs and to provide service to our customers.

In addition, we received a perfect score of 100 in the Human Rights Campaign 2021 Corporate Equality Index, were upgraded from A to AA at MSCI Inc. ESG ratings, were named a Top 100 U.S. Companies Supporting Healthy Communities and Families, were listed as one of America’s Most Responsible Companies for 2022 by Newsweek and were ranked in the top 10% in the Refiners and Pipelines industry group in Sustainalytics ESG Risk Ranking.

We have an environmental sustainability team that accelerated our ongoing environmental stewardship efforts and is exploring ways to lower our GHG emissions even further.

We are dedicated to the evaluation and development of renewable energy and low-carbon projects and are actively

researching opportunities that will complement our extensive midstream assets and expertise, strengthening the role we expect to play in the transformation to a lower-carbon economy.

Scope 1 and 2 emissions represent our total operational emissions, including direct emissions from sources we operate and indirect emissions from the generation of purchased power.

We anticipate several potential pathways toward achieving our emissions reduction target, which could include the electrification of certain natural gas compression assets across our operations, methane mitigation through best management practices and system optimizations.

Additionally, we are identifying potential opportunities to collaborate with utilities and power generators to accelerate the availability of lower-carbon power options across our operations.

We will maintain a disciplined capital approach and will continue to discuss our total capital expenditures and provide our expected total capital spend annually in the “Liquidity and Capital Resources” section in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this, and future, Annual Reports.

In November 2021, we announced the completion of our Bear Creek plant expansion, which increased our total processing capacity to approximately 1.7 Bcf/d in the Williston Basin.

In addition, as we expect to continue to benefit from increased producer activity and continued rising gas-to-oil ratios in the Rocky Mountain region, we recently announced plans to restart construction on our 200 MMcf/d Demicks Lake III natural gas processing plant.

In the Mid-Continent region, we are experiencing increased producer drilling activity in 2022 in the SCOOP and STACK areas.

Our ability to provide reliable service throughout the extreme weather conditions of Winter Storm Uri highlighted the importance of market-connected pipelines and storage assets and the value of these services.

In addition, during the first quarter 2021, we sold natural gas that we owned and held in storage, which benefited our segment’s financial results.

We continue to monitor market conditions and sell our natural gas in storage during favorable market conditions.

During the extreme winter weather periods, we maximized natural gas storage withdrawals for firm service customers serving critical needs.

In response to increased producer activity and the expected increased demand for ethane as two new petrochemical plants come online in 2022, we recently announced plans to restart construction on our 125 MBbl/d MB-5 fractionator in Mont Belvieu, Texas, which is fully contracted.

MB-5 is expected to be completed in the third quarter 2023 and will increase our NGL fractionation capacity to more than 1 MMBbl/d across our entire system.

We

Our recently completed Bear Creek plant expansion increased our gathering and processing total capacity to approximately 1.7 Bcf/d and will enable us to capture expected natural gas production from new wells.

Our utilization rates in the Rocky Mountain region increased in 2021 due primarily to increased producer activity, rising gas-to-oil ratios and the impact of curtailed production in 2020.

Our 2021 utilization rates include the impact of capacity made available by our Demicks Lake II processing plant and Bear Creek plant expansion.

- eight NGL product terminals.

Utilization - Increased volumes drove higher utilization rates at our NGL fractionators, which were offset by the full year impact of increased capacity on our NGL gathering pipelines.

Overview - Our Natural Gas Pipelines segment, through its wholly owned assets, provides transportation and storage services to end users.

Information about our legal proceedings is included in Note [removed: N] [added: O] of the Notes to Consolidated Financial Statements in this Annual Report.

For the fiscal year ended December 31, [removed: 2021.][added: 2022.]

[removed: ][added: ]

Aggregate market value of registrant’s common stock held by non-affiliates based on the closing trade price on June 30, [removed: 2021,] [added: 2022,] was [removed: $24.4] [added: $24.5] billion.

On February [removed: 22, 2022,] [added: 21, 2023,] the Company had [removed: 446,213,285] [added: 447,220,972] shares of common stock outstanding.

Portions of the definitive proxy statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held May [removed: 25, 2022,] [added: 24, 2023,] are incorporated by reference in Part III.

[removed: 2021] [added: 2022] ANNUAL REPORT

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| $2.5 Billion Credit Agreement | | | ONEOK’s $2.5 billion revolving credit agreement, as amended [added: and restated] | | |

| Annual Report | | | Annual Report on Form 10-K for the year ended December 31, [removed: 2021] [added: 2022] | | |

| CFTC | | | [removed: U.S.] [added: United States] Commodity Futures Trading Commission | | |

| Guardian [removed: Pipeline] | | | Guardian Pipeline, L.L.C., a wholly owned subsidiary of ONEOK, Inc. | | |

| [removed: NGL products] [added: Purity NGLs] | | | Marketable natural gas liquid purity products, such as ethane, ethane/propane mix, propane, iso-butane, normal butane and natural gasoline | | |

| Northern Border [removed: Pipeline] | | | Northern Border Pipeline Company, a 50% owned joint venture | | |

| Overland Pass [removed: Pipeline] | | | Overland Pass Pipeline Company, LLC, a 50% owned joint venture | | |

Forward-looking statements may include words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” [removed: “target,”] “guidance,” “intend,” “may,” “might,” “outlook,” “plan,” “potential,” “project,” “scheduled,” “should,” [added: “target,”] “will,” “would” and other words and terms of similar meaning.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| [Signatures](#i293bdc4d79a0408a99c0166c9640eb0f_238) | | | | | | | | | [114](#i293bdc4d79a0408a99c0166c9640eb0f_238) | | |

| Guardian Term Loan Agreement | | | Guardian’s senior unsecured three-year $120 million term loan agreement dated June 24, 2022 | | |

| Inflation Reduction Act | | | Inflation Reduction Act of 2022 | | |

| Term SOFR | | | The forward-looking term rate based on SOFR | | |

| Viking | | | Viking Gas Transmission Company, a wholly owned subsidiary of ONEOK, Inc. | | |

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

| [Signatures](#ib56725b8b26746a0828c8d94b670d72c_238) | | | | | | | | | [111](#ib56725b8b26746a0828c8d94b670d72c_238) | | |

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

Our common stock is listed on the NYSE under the trading symbol “OKE.” The corporate name ONEOK is used in [removed: newspaper] stock listings.

At February [removed: 22, 2022,] [added: 21, 2023,] there were [removed: 13,198] [added: 13,064] holders of record of our [removed: 446,213,285] [added: 447,220,972] outstanding shares of common stock.

For information regarding our Employee Stock Award Program and other equity compensation plans, see Note [removed: J] [added: K] of the Notes to Consolidated Financial Statements and “Equity Compensation Plan Information” included in Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, in this Annual Report.

The following performance graph compares the performance of our common stock with the S&P 500 Index, the Alerian Midstream Energy Select Index and a ONEOK Peer Group during the period beginning on December 31, [removed: 2016,] [added: 2017,] and ending on December 31, [removed: 2021.][added: 2022.]

at December 31, [removed: 2016,] [added: 2017,] and at the End of Every Year Through December 31, [removed: 2021.][added: 2022.]

[removed: ][added: ]

| | | | | | | [removed: Cumulative Total Return] | | | | | | [added: Cumulative Total Return] | | | | | | | | | | | | | | | | | | | | | [added: | | |]

| | | | | | | [added: | | | | | |] Years Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | |]

| | | | | | | [removed: 2017] | | | | | | 2018 | | | | | | 2019 | | | | | | 2020 | | | | | | 2021 | | | [added: 2022 | | |]

(a) - The [added: current] ONEOK Peer Group is composed of the following companies: DCP Midstream, LP; Energy Transfer LP; EnLink Midstream, LLC; Enterprise Products Partners L.P.; Kinder Morgan, Inc.; Magellan Midstream Partners, L.P.; MPLX LP; NuStar Energy L.P.; Plains All American Pipeline, L.P.; Targa Resources Corp.; [added: Western Midstream Partners, LP;] and The Williams Companies, Inc.

(b) - The Alerian Midstream Energy Select Index measures the composite performance of approximately [removed: 33] [added: 29] North American energy infrastructure companies who are engaged in midstream activities involving energy commodities.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| ONEOK, Inc. | | | | | | | | | | | | $ | 106.28 | | | | | $ | 157.06 | | | | | $ | 88.96 | | | | | $ | 146.64 | | $ | 174.36 | |

| S&P 500 Index | | | | | | | | | | | | $ | 95.62 | | | | | $ | 125.72 | | | | | $ | 148.85 | | | | | $ | 191.58 | | $ | 156.88 | |

| ONEOK Peer Group (a) | | | | | | | | | | | | $ | 88.62 | | | | | $ | 104.19 | | | | | $ | 76.75 | | | | | $ | 102.24 | | $ | 129.86 | |

| Alerian Midstream Energy Select Index (b) | | | | | | | | | | | | $ | 82.33 | | | | | $ | 100.72 | | | | | $ | 77.13 | | | | | $ | 108.56 | | $ | 129.35 | |

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ONEOK, Inc. | | | | | | $ | 97.92 | | | | | $ | 104.07 | | | | | $ | 153.80 | | | | | $ | 87.11 | | | | | $ | 143.59 | |

| S&P 500 Index | | | | | | $ | 121.83 | | | | | $ | 116.49 | | | | | $ | 153.17 | | | | | $ | 181.35 | | | | | $ | 233.41 | |

| ONEOK Peer Group (a) | | | | | | $ | 93.45 | | | | | $ | 77.86 | | | | | $ | 87.11 | | | | | $ | 64.37 | | | | | $ | 91.97 | |

| Alerian Midstream Energy Select Index (b) | | | | | | $ | 100.76 | | | | | $ | 82.95 | | | | | $ | 101.49 | | | | | $ | 77.72 | | | | | $ | 109.39 | |

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

We have audited the accompanying consolidated balance sheets of ONEOK, Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the [removed: Company’s] [added: Company's] internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

Critical Audit [removed: Matter][added: Matters]

[removed: Many] [added: Most] of the contracts in [removed: its] [added: our] derivative portfolio are executed in liquid markets where price transparency exists.

[removed: Fair value measurements classified as Level 3] [added: These balances] are composed [removed: predominantly] of [removed: exchange-cleared] [added: exchange cleared] and over-the-counter derivatives to hedge [added: natural gas basis and] NGL price [removed: risk.][added: risk and over-the-counter interest-rate derivatives.]

| | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Commodity sales | | | | | | $ | [removed: 15,180,264] [added: 20,975,462] | | | | | $ | [removed: 7,255,259] [added: 15,180,264] | | | | | $ | [removed: 8,916,047] [added: 7,255,259] | |

| Services | | | | | | [removed: 1,360,045] [added: 1,411,430] | | | | | | [removed: 1,286,983] [added: 1,360,045] | | | | | | [removed: 1,248,320] [added: 1,286,983] | | |

| Total revenues (Note [removed: P)] [added: Q)] | | | | | | [removed: 16,540,309] [added: 22,386,892] | | | | | | [removed: 8,542,242] [added: 16,540,309] | | | | | | [removed: 10,164,367] [added: 8,542,242] | | |

| Cost of sales and fuel (exclusive of items shown separately below) | | | | | | [removed: 12,256,655] [added: 17,909,866] | | | | | | [removed: 5,110,146] [added: 12,256,655] | | | | | | [removed: 6,788,040] [added: 5,110,146] | | |

| Operations and maintenance | | | | | | [removed: 900,420] [added: 958,246] | | | | | | [removed: 761,176] [added: 900,420] | | | | | | [removed: 863,708] [added: 761,176] | | |

| Depreciation and amortization | | | | | | [removed: 621,701] [added: 626,132] | | | | | | [removed: 578,662] [added: 621,701] | | | | | | [removed: 476,535] [added: 578,662] | | |

| Impairment charges (Notes [removed: D] [added: E] and [removed: E)] [added: F)] | | | | | | — | | | | | | [removed: 607,200] [added: —] | | | | | | [removed: —] [added: 607,200] | | |

| General taxes | | | | | | [removed: 166,668] [added: 191,458] | | | | | | [removed: 125,028] [added: 166,668] | | | | | | [removed: 119,156] [added: 125,028] | | |

| Operating income | | | | | | [removed: 2,596,259] [added: 2,807,419] | | | | | | [removed: 1,361,357] [added: 2,596,259] | | | | | | [removed: 1,914,353] [added: 1,361,357] | | |

| Equity in net earnings from investments (Note [removed: M)] [added: N)] | | | | | | [removed: 122,520] [added: 147,720] | | | | | | [removed: 143,241] [added: 122,520] | | | | | | [removed: 154,541] [added: 143,241] | | |

| Impairment of equity investments (Note [removed: M)] [added: N)] | | | | | | — | | | | | | [removed: (37,730)] [added: —] | | | | | | [removed: —] [added: (37,730)] | | |

| Allowance for equity funds used during construction | | | | | | [removed: 1,682] [added: 2,551] | | | | | | [removed: 23,662] [added: 1,682] | | | | | | [removed: 64,815] [added: 23,662] | | |

| Other income [removed: (expense)] [added: (expense), net] | | | | | | [removed: (3,333)] [added: (32,099)] | | | | | | [removed: 24,672] [added: (3,333)] | | | | | | [removed: 9,055] [added: 24,672] | | |

| Interest expense (net of capitalized interest of [removed: $25,150, $75,436] [added: $57,426, $25,150] and [removed: $107,275,] [added: $75,436,] respectively) | | | | | | [removed: (732,924)] [added: (675,946)] | | | | | | [removed: (712,886)] [added: (732,924)] | | | | | | [removed: (491,773)] [added: (712,886)] | | |

| Income before income taxes | | | | | | [removed: 1,984,204] [added: 2,249,645] | | | | | | [removed: 802,316] [added: 1,984,204] | | | | | | [removed: 1,650,991] [added: 802,316] | | |

| Income taxes (Note [removed: L)] [added: M)] | | | | | | [removed: (484,498)] [added: (527,424)] | | | | | | [removed: (189,507)] [added: (484,498)] | | | | | | [removed: (372,414)] [added: (189,507)] | | |

| Net income | | | | | | [removed: 1,499,706] [added: 1,722,221] | | | | | | [removed: 612,809] [added: 1,499,706] | | | | | | [removed: 1,278,577] [added: 612,809] | | |

| Net income available to common shareholders | | | | | | $ | [removed: 1,498,606] [added: 1,721,121] | | | | | $ | [removed: 611,709] [added: 1,498,606] | | | | | $ | [removed: 1,277,477] [added: 611,709] | |

| Basic EPS (Note [removed: I)] [added: J)] | | | | | | $ | [removed: 3.36] [added: 3.85] | | | | | $ | [removed: 1.42] [added: 3.36] | | | | | $ | [removed: 3.09] [added: 1.42] | |

| Diluted EPS (Note [removed: I)] [added: J)] | | | | | | $ | [removed: 3.35] [added: 3.84] | | | | | $ | [removed: 1.42] [added: 3.35] | | | | | $ | [removed: 3.07] [added: 1.42] | |

| Basic | | | | | | [removed: 446,403] [added: 447,507] | | | | | | [removed: 431,105] [added: 446,403] | | | | | | [removed: 413,560] [added: 431,105] | | |

| Diluted | | | | | | [removed: 447,403] [added: 448,447] | | | | | | [removed: 431,782] [added: 447,403] | | | | | | [removed: 415,444] [added: 431,782] | | |

| Net income | | | | | | $ | [removed: 1,499,706] [added: 1,722,221] | | | | | $ | [removed: 612,809] [added: 1,499,706] | | | | | $ | [removed: 1,278,577] [added: 612,809] | |

| Change in fair value of derivatives, net of tax of [removed: $60,896, $49,292] [added: $(27,914), $60,896] and [removed: $44,149,] [added: $49,292,] respectively | | | | | | [removed: (203,868)] [added: 93,451] | | | | | | [removed: (165,023)] [added: (203,868)] | | | | | | [removed: (147,803)] [added: (165,023)] | | |

| Derivative amounts reclassified to net income, net of tax of [removed: $(69,134), $(6,313)] [added: $(60,019), $(69,134)] and [removed: $6,058,] [added: $(6,313),] respectively | | | | | | [removed: 228,999] [added: 200,933] | | | | | | [removed: 21,097] [added: 228,999] | | | | | | [removed: (21,057)] [added: 21,097] | | |

| Change in retirement and other postretirement benefit plan obligations, net of tax of [removed: $(14,929), $7,812] [added: $(15,761), $(14,929)] and [removed: $2,910,] [added: $7,812,] respectively | | | | | | [removed: 49,976] [added: 52,764] | | | | | | [removed: (26,154)] [added: 49,976] | | | | | | [removed: (9,696)] [added: (26,154)] | | |

| Other comprehensive income (loss) of unconsolidated affiliates, net of tax of [removed: $(1,490), $2,201] [added: $(4,764), $(1,490)] and [removed: $2,152,] [added: $2,201,] respectively | | | | | | [removed: 4,991] [added: 15,947] | | | | | | [removed: (7,369)] [added: 4,991] | | | | | | [removed: (7,205)] [added: (7,369)] | | |

| Total other comprehensive income (loss), net of tax | | | | | | [removed: 80,098] [added: 363,095] | | | | | | [removed: (177,449)] [added: 80,098] | | | | | | [removed: (185,761)] [added: (177,449)] | | |

| Comprehensive income | | | | | | $ | [removed: 1,579,804] [added: 2,085,316] | | | | | $ | [removed: 435,360] [added: 1,579,804] | | | | | $ | [removed: 1,092,816] [added: 435,360] | |

| | | | | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Cash and cash equivalents [removed: |] [added: at beginning of period] | | | | | [removed: $] | 146,391 | | | | | [removed: $] | 524,496 | | [added: | | | | 20,958 | | |]

| Accounts receivable, net | | | | | | [removed: 1,441,786] [added: 1,532,292] | | | | | | [removed: 829,796] [added: 1,441,786] | | |

*Accounting for the Medford Incident*

As described in Note B to the consolidated financial statements, on July 9, 2022, a fire occurred at the Company’s 210 MBbl/d Medford, Oklahoma, natural gas liquids fractionation facility.

The Company has property damage and business interruption coverage against which they developed claims related to the Medford incident and recorded accruals for the expected insurance recoveries.

Management records recoveries for incurred costs and lost earnings related to its business interruption coverage for the amount probable of recovery, not to exceed the actual losses incurred, and for lost earnings that have been realized and are no longer considered a gain contingency.

Management assessed property damage to the facility and incurred costs and lost earnings related to business interruption, as well as timing of recognition under applicable insurance recovery guidance, and recorded accruals of $150.7 million for the year ended December 31, 2022, which was comprised of property damage of $45.6 million, with a corresponding write off of assets due to property damage of the facility; $9 million related to incurred costs in excess of the deductible that were probable of recovery, with an offset to the operating and maintenance line item; and $96.1 million primarily related to third-party fractionation costs incurred subsequent to the 45-day business interruption waiting period, with an offset to other operating (income) expense.

The Company received a $100 million unallocated payment from the insurers in the fourth quarter of 2022, and had recorded an outstanding insurance receivable of $50.7 million as of December 31, 2022.

The principal considerations for our determination that performing procedures relating to the accounting for the Medford incident is a critical audit matter are (i) the significant judgment by management when assessing the application of accounting guidance for business interruption and the resulting recognition of incurred costs and lost earnings; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s assessment of the application of accounting guidance for business interruption and the resulting recognition of incurred costs and lost earnings.

These procedures included testing the effectiveness of controls relating to the application of accounting guidance for business interruption and recognition of the incurred costs and lost earnings.

These procedures also included, among others, (i) reading the related customer contracts to assess lost earnings; (ii) evaluating management’s assessment of the incurred costs and lost earnings, including their assessment of the application of the appropriate accounting guidance for business interruption; (iii) testing the incurred costs, lost earnings, and related recovery, which included testing the appropriate presentation within the financial statements; and (iv) tracing the insurance payments received to the Company’s general ledger.

February 28, 2023

| Other operating (income) expense, net (Note B) | | | | | | (106,229) | | | | | | (1,394) | | | | | | (1,327) | | |

| | | | | | | 2022 | | | | | | 2021 | | |

| | | | | | | 2022 | | | | | | 2021 | | |

| Other current liabilities | | | | | | 267,671 | | | | | | 397,975 | | |

| Net income | | | | | | $ | 1,722,221 | | | | | $ | 1,499,706 | | | | | $ | 612,809 | |

| Depreciation and amortization | | | | | | 626,132 | | | | | | 621,701 | | | | | | 578,662 | | |

| Deferred income taxes | | | | | | 463,419 | | | | | | 472,057 | | | | | | 186,730 | | |

| December 31, 2022 | | | | | | 20,000 | | | | | | 474,916,234 | | | | | | $ | — | | | | | $ | 4,749 | | | | | $ | 7,253,154 | |

| Net income | | | | | | — | | | | | | 1,722,221 | | | | | | — | | | | | | 1,722,221 | | |

| Other comprehensive income (Note I) | | | | | | 363,095 | | | | | | — | | | | | | — | | | | | | 363,095 | | |

| December 31, 2022 | | | | | | $ | (108,256) | | | | | $ | 50,396 | | | | | $ | (706,158) | | | | | $ | 6,493,885 | |

Our assets are connected to key supply areas and demand centers, including supply areas in Canada and the United States via our intrastate and interstate natural gas pipelines and Northern Border, and export markets in Mexico via Roadrunner which enable us to provide essential natural gas transportation and storage services.

We record revenue when the commodity is delivered to the

Occasionally, we sell unfractionated NGLs to customers at an index-based price less third-party fractionation costs.

These costs are included as a reduction to commodity sales revenue.

The third-party fractionation costs we incurred associated with the Medford incident (Note B) were primarily under this type of agreement.

In our Notes to Consolidated Financial Statements, we also state separately certain amounts for regulated operations where they are defined by the SEC.

In Notes E and R we have made certain reclassifications to prior year amounts to conform to current year presentation.

MEDFORD INCIDENT

On July 9, 2022, a fire occurred at our 210 MBbl/d Medford, Oklahoma, natural gas liquids fractionation facility.

All personnel were safe and accounted for with temporary evacuations of local residents taken as a precautionary measure.

Subject to the terms and conditions of our insurance policies and any applicable sub-limits, we have property damage and business interruption coverage with a combined per occurrence limit of $2 billion and deductibles of $5 million per occurrence for property damage and a 45-day waiting period per occurrence for business interruption coverage.

Beginning in August 2022, we developed claims related to the Medford incident and recorded accruals for the expected insurance recoveries.

We assessed incurred costs and lost earnings related to business interruption and property damage to our facility, as well as timing of recognition under applicable insurance recovery guidance, and recorded accruals of $150.7 million in 2022.

We received a $100 million unallocated payment from our insurers in the fourth quarter 2022.

We assessed the property damage to our facility and wrote off assets totaling $45.6 million for the year ended December 31, 2022, which represents the value associated with certain damaged Medford facility property.

We recorded an insurance receivable that was probable of recovery and fully offsets our noncash property losses, resulting in no impact to our Consolidated Statement of Income.

We expect to continue to operate NGL pipeline assets in Medford along with existing offices for regional operations.

In addition, we are preserving certain Medford assets for future potential NGL facilities that could be constructed in Medford to enhance our NGL business as the market evolves.

Our property insurance policy also includes coverage for expenses incurred in response to the Medford incident.

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

*Valuation of Level 3 Commodity Derivative Assets and Liabilities*

As described in Notes A and B to the consolidated financial statements, the Company’s level 3 commodity contracts derivative assets and liabilities total $9.3 million and $123.6 million, respectively, as of December 31, 2021.

As disclosed by management, commodity price risk includes basis risk, which is the difference in price between various locations where commodities are purchased and sold.

Management records all derivative instruments at fair value, with the exception of normal purchases and normal sales transactions that are expected to result in physical delivery.

These measurements are based on inputs that may include one or more unobservable inputs, including internally developed commodity price curves, that incorporate market data from broker quotes and third-party pricing services.

The commodity derivatives are generally valued using forward quotes provided by third-party pricing services that are validated with other market data.

The principal considerations for our determination that performing procedures relating to the valuation of level 3 commodity derivative assets and liabilities is a critical audit matter are (i) the significant judgment by management to determine the fair value of these derivatives; (ii) a high degree of auditor judgment, subjectivity and effort in evaluating audit evidence related to the valuation due to the use of internally developed commodity price curves that incorporate market data from broker quotes and third-party pricing services; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to the valuation of level 3 commodity derivative assets and liabilities, including controls over the Company’s model, significant assumptions, and data.

These procedures also included, among others, the involvement of professionals with specialized skill and knowledge to assist in developing an independent estimate of the level 3 commodity derivative assets and liabilities and comparison of the independent estimate to management’s estimate to evaluate the reasonableness of management’s estimate.

Developing the independent estimate involved testing the completeness and accuracy of data provided by management and evaluating management’s assumptions related to the internally developed commodity price curves which incorporate market data from broker quotes and third-party pricing services.

March 1, 2022

| | | | | | | | | | | | | | | | | | | | | |

| (Gain) loss on sale of assets | | | | | | (1,394) | | | | | | (1,327) | | | | | | 2,575 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Accrued taxes | | | | | | 97,537 | | | | | | 89,428 | | |

| Other current liabilities | | | | | | 300,438 | | | | | | 83,032 | | |

| Cumulative effect adjustment for adoption of ASU 2016-02, “Leases (Topic 842)” | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| December 31, 2019 | | | | | | 20,000 | | | | | | 445,016,234 | | | | | | — | | | | | | 4,450 | | | | | | 7,403,895 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| January 1, 2019 | | | | | | $ | (188,239) | | | | | $ | — | | | | | $ | (851,806) | | | | | $ | 6,579,543 | |

| Cumulative effect adjustment for adoption of ASU 2016-02, “Leases (Topic 842)” | | | | | | — | | | | | | (67) | | | | | | — | | | | | | (67) | | |

| Other comprehensive loss (Note H) | | | | | | (177,449) | | | | | | — | | | | | | — | | | | | | (177,449) | | |

| Other, net | | | | | | — | | | | | | — | | | | | | — | | | | | | 21,930 | | |

Our interstate pipelines are regulated by the FERC and are located in North Dakota, Minnesota, Wisconsin, Illinois, Indiana, Kentucky, Tennessee, Oklahoma, Texas and New Mexico.

Our intrastate natural gas pipeline and storage assets are located in Oklahoma, Kansas and Texas.

Our assets connect major natural gas producing basins and market hubs with end-use customers.

Many of the contracts in our derivative portfolio are executed in liquid markets where price transparency exists.

These balances are composed of exchange cleared derivatives to hedge natural gas basis and NGL price risk at certain market locations and over-the-counter interest-rate derivatives.

These balances are composed predominantly of exchange-cleared and over-the-counter derivatives to hedge NGL price risk at certain market locations.

These commodity derivatives are generally valued using forward quotes provided by third-party pricing services that are validated with other market data.

We believe any measurement uncertainty at December 31, 2021, is immaterial as our Level 3 fair value measurements are based on unadjusted pricing information from broker quotes and third-party pricing services.

We use the output method

In our Consolidated Financial Statements and our Notes to Consolidated Financial Statements, regulated operations are defined pursuant to Financial Accounting Standards Board’s (FASB) Accounting Standards Codification 980, Regulated Operations.

In January 2021, we adopted ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies certain concepts in Topic 740, Income Taxes.

The impact of adopting this standard was not material.

offsetting derivative net liability positions under master-netting arrangements in the table above.

| | | | | | | December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Financial contracts | | | | | | $ | 6,697 | | | | | $ | — | | | | | $ | 103,801 | | | | | $ | 110,498 | | | | | $ | (110,498) | | | | | $ | — | |

Based on our evaluation under that framework, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2021.][added: 2022.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein (Item 8).

There have been no changes in our internal control over financial reporting during the quarter ended December 31, [removed: 2021,] [added: 2022,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

Information concerning our directors is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

Information on compliance with Section 16(a) of the Exchange Act is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

Information concerning the code of ethics, or code of business conduct, is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

Information concerning the Nominating Committee procedures is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

Information concerning the Audit Committee is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

Information concerning the Audit Committee Financial Experts is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

Information on executive compensation is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

Information concerning the ownership of certain beneficial owners is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

Information on security ownership of directors and officers is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

The following table sets forth certain information concerning our equity compensation plans as of December 31, [removed: 2021:][added: 2022:]

| Equity compensation plans approved by security holders (1) | | | | | | [removed: 3,237,097] [added: 3,320,600] | | | | | | | | | | | | — | | | | | | | | | [removed: 6,077,029] [added: 5,111,244] | | | | | |

| Equity compensation plans not approved by security holders (2) | | | | | | [removed: 330,901] [added: 330,002] | | | | | | | | | $ | | | [removed: 58.76] [added: 65.70] | | | | | | | | | — | | | | | |

For a brief description of the material features of these plans, see Note [removed: J] [added: K] of the Notes to Consolidated Financial Statements in this Annual Report.

Column (c) includes [removed: 573,622,] [added: 459,886,] 130,204 and [removed: 5,373,203] [added: 4,521,154] shares available for future issuance under our Employee Stock Purchase Plan, Employee Stock Award Program and Equity Incentive Plan, respectively.

For a brief description of the material features of these plans, see Notes K and [removed: J] [added: L] of the Notes to Consolidated Financial Statements in this Annual Report.

The price used for these plans to calculate the weighted-average exercise price in the table is [removed: $58.76,] [added: $65.70,] which represents the [removed: 2021] [added: 2022] year-end closing price of our common stock on the NYSE.

| Total | | | | | | 3,650,602 | | | | | | | | | $ | | | 65.70 | | | | | | | | | 5,111,244 | | | | | |

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

| Total | | | | | | 3,567,998 | | | | | | | | | $ | | | 58.76 | | | | | | | | | 6,077,029 | | | | | |

Information on certain relationships and related transactions and director independence is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

Information concerning the principal accountant’s fees and services is set forth in our [removed: 2022] [added: 2023] definitive Proxy Statement and is incorporated herein by this reference.

[Table of Cont](#ib56725b8b26746a0828c8d94b670d72c_7)[ents](#ib56725b8b26746a0828c8d94b670d72c_7)

| | | | (a) | | | Report of Independent Registered Public Accounting Firm (PCAOB ID: 238) | | | [removed: 54-55] [added: 56-57] | | |

| | | | (b) | | | Consolidated Statements of Income for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] | | | [removed: 56] [added: 58] | | |

| | | | (c) | | | Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] | | | [removed: 57] [added: 59] | | |

| | | | (d) | | | Consolidated Balance Sheets as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | [removed: 58-59] [added: 60-61] | | |

| | | | (e) | | | Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] | | | [removed: 61] [added: 63] | | |