ONEOK (OKE) 10-K risk factor changes: FY2023 vs FY2022

Our gathering and transportation pipeline systems are dependent upon production from natural gas and crude oil wells, which naturally [removed: declines] [added: decline] over time.

- demand and prices for natural gas, [removed: NGLs] [added: NGLs, Refined Products] and crude oil;

- crude oil and associated natural gas field characteristics and production performance; [removed: and]

- capacity constraints and/or [removed: shut downs] [added: shutdowns] on the pipelines that transport crude oil, natural [removed: gas and] [added: gas,] NGLs [added: and Refined Products] from producing areas and our facilities.

If we are not able to obtain new supplies to replace the natural decline in volumes from existing production or reductions in volumes because of competition, [removed: 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 flows.

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

[added: 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.

The volatility of natural gas, [added: NGL, Refined Products and] crude oil [removed: and NGL] prices could affect adversely our earnings and cash flows.

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

[removed: As commodity] prices decline, we could be paid less for our commodities thereby reducing our cash flows.

- the occurrence of wars [added: (such as the Russian invasion of Ukraine), the activities of the Organization of Petroleum Exporting Countries (OPEC)] and other [added: non-OPEC oil producing countries with large production capacity, or other] geopolitical conditions [added: (including instability in the Middle East)] impacting supply and demand for natural gas, [removed: NGLs] [added: NGLs, Refined Products] and crude oil;

- the effects of imports and exports on the price of natural gas, [added: NGLs, Refined Products,] crude [removed: oil, NGL] [added: oil] and liquefied natural gas;

- technology and improved efficiency impacting supply and demand for natural gas, [removed: NGLs] [added: NGLs, Refined Products] and crude oil.

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

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

In [removed: September] 2021, we announced a companywide absolute GHG emissions reduction target of 2.2 million metric tons of carbon dioxide equivalents from our combined Scope 1 and Scope 2 emissions by [removed: 2030.][added: 2030 for our legacy ONEOK assets.]

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 [removed: 31.][added: 31, 2019.]

We may be subject to [removed: physical and financial] risks associated with [added: the physical impacts of] climate change.

To the extent the severity or frequency of extreme weather events increases, this could increase our cost of providing services, including the cost of insurance, and [removed: decrease] the availability of certain insurance [removed: coverages.][added: coverages could decrease.]

Our operations are subject to all the risks and hazards typically associated with the operation of [removed: 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, 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 conditions (including extreme cold weather), infectious disease including a [removed: pandemic,] [added: pandemic (such as COVID-19),] 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, floods and other similar events beyond our control.

Production areas outside of our operating regions may compete with natural [removed: gas and] [added: gas,] NGL [added: and crude oil] supply originating in production areas connected to our systems, which may cause [removed: natural gas and NGLs] [added: products] in supply areas connected to our systems to be diverted to markets other than our traditional market areas and may affect capacity utilization adversely on our pipeline systems and our ability to renew or replace existing contracts.

[removed: Either of these possibilities could result] in [removed: lower revenues, which] [added: these expenditures, costs or liabilities] could affect adversely our business, results of operations, financial position and cash flows.

Certain of our businesses are exposed to market risk and the impact of market fluctuations in natural gas, [removed: NGLs] [added: NGL, Refined Products] and crude oil prices.

To manage the risk from market price fluctuations in natural gas, NGLs, [added: Refined Products and] crude oil and electricity prices, we may use derivative instruments such as swaps, futures, forwards and options.

Finally, hedging arrangements for forecasted sales and purchases are used to reduce our exposure to commodity price fluctuations and may limit the benefit we would otherwise receive if market prices for natural gas, [added: NGLs, Refined Products and] crude oil [removed: and NGLs] differ from the stated price in the hedge instrument for these commodities.

If any of our systems [removed: are] [added: is] damaged, [removed: fail] [added: fails] to function properly or otherwise [removed: become] [added: becomes] unavailable, we may incur substantial costs to repair or replace them and may experience loss or corruption of critical data and interruptions or delays in our ability to perform critical functions, which could affect adversely our business and results of operations.

A significant failure, compromise, breach or interruption in our systems, or those of our [removed: vendors,] [added: vendors or counterparties,] could result in a disruption of our operations, physical or environmental damages, customer dissatisfaction, damage to our reputation and a loss of customers or revenues.

If any such failure, interruption or similar event results in the improper disclosure of information maintained in our information systems and networks or those of our [removed: vendors,] [added: vendors and counterparties,] including personnel, [removed: customer and] [added: customer,] vendor [added: and counterparty] information, we could also be subject to liability under relevant contractual obligations and laws and regulations protecting personal data and privacy.

Efforts by us and our vendors [added: and counterparties] to develop, implement and maintain security measures may not be successful in anticipating, detecting or preventing these events from occurring, due in part to attackers’ ever-changing methods and 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.

Current efforts by the federal government, such as the Improving Critical Infrastructure Cybersecurity executive order, and the TSA security directives [removed: issued in May and July 2021, and July 2022,] have utilized significant internal and external resources, and any potential future statutes, regulations or orders could lead to further increased regulatory compliance costs, insurance coverage costs or capital expenditures.

Growing our business by constructing new pipelines and facilities or making modifications to our existing facilities subjects us to construction risk and supply risks, should adequate natural [removed: gas or NGL] [added: gas, NGL, Refined Products and crude oil] supply be unavailable upon completion of the facilities.

- projects may increase demand for labor, materials [removed: (which may be even more difficult to obtain due to supply chain constraints)] and rights of way, which may, in turn, affect our costs and schedule;

- we may be required to rely on third parties downstream of our facilities to have available capacity for our delivered natural [removed: gas or] [added: gas,] NGLs, [added: Refined Products and crude oil,] which may not be operational; and

As a result, new facilities may not be able to attract enough natural [removed: gas or NGLs] [added: gas, NGLs, Refined Products and crude oil] to achieve our expected investment return, which could affect adversely our business, results of operations, financial position and cash flows.

Measurement adjustments on our pipeline [removed: system] [added: systems] may be impacted materially by changes in estimation, type of commodity and other factors.

[removed: Natural gas and NGL] [added: Product] measurement adjustments occur as part of the normal operating conditions associated with our assets.

The quantification and resolution of measurement adjustments are complicated by several factors including: (i) the significant quantities (*i.e.*, thousands) of measurement equipment that we use across our [removed: natural gas and NGL] systems, [removed: primarily around our gathering and processing assets;] (ii) varying qualities of natural gas in the streams gathered and processed through our systems and the mixed nature of NGLs gathered and fractionated; and (iii) variances in measurement that are inherent in metering technologies and standards.

In the competition for supply, we may have significant levels of excess capacity on our [removed: natural gas and NGL pipelines,] [added: pipeline,] processing, [removed: fractionation] [added: fractionation, terminal] and storage assets.

Our [removed: natural gas and NGL pipelines,] [added: pipeline,] processing, [removed: fractionation] [added: fractionation, terminal] and storage assets compete with other [removed: pipelines, processing, fractionation and storage] [added: similar] assets for natural [removed: gas] [added: gas, NGL, Refined Products] and [removed: NGL] [added: crude oil] supply delivered to the markets we serve.

You should consider carefully the following discussion of risks, as well as all of the other information contained in this Annual Report.

Our business, financial conditions, results of operations or prospects could be materially and adversely affected by any of these risks or uncertainties.

- regulatory compliance;

- reserve performance; and

As commodity

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- public health crises, including pandemics (such as COVID-19);

Reduced volatility in energy prices or new government regulations could discourage our storage customers from holding positions in Refined Products, crude oil and natural gas, which could adversely affect our business.

The demand for the storage services has resulted in part from customers’ desire to have the ability to take advantage of profit opportunities created by the volatility in prices of Refined Products, crude oil and natural gas.

Periods of prolonged stability or declines in these commodity prices could reduce demand for our storage services.

If federal, state or international regulations are passed that discourage our customers from storing these commodities, demand for our storage services could decrease, in which case we may be unable to identify customers willing to contract for such services or be forced to reduce the rates we charge for our services.

The realization of any of these risks could adversely affect our business.

We depend on producers, gathering systems, refineries and pipelines owned and operated by others to supply our assets, and any closures, interruptions or reduced activity levels at these facilities may adversely affect our business.

We depend on crude oil production and on connections with gathering systems, refineries and pipelines owned and operated by third parties to supply our assets.

We cannot control or predict the amount of product that will be delivered to us by the gathering systems and pipelines that supply our assets, nor can we control or predict the output of refineries that supply our Refined Products pipelines and terminals.

Changes in the quality or quantity of this crude oil production, outages at these refineries or reduced or interrupted throughput on gathering systems or pipelines due to weather-related or other natural causes, competitive forces, testing, line repair, damage, reduced operating pressures or other causes could reduce shipments on our pipelines or result in our being unable to receive products at or deliver products from our terminals, any of which could adversely affect our business.

Refineries that supply or are supplied by our facilities are subject to regulatory developments, including but not limited to low carbon fuel standards, regulations regarding fuel specifications, plant emissions and safety and security requirements that could significantly increase the cost of their operations and reduce their operating margins.

In addition, the profitability of the refineries that supply our facilities is subject to regional and global supply and demand dynamics that are difficult to predict.

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A period of sustained weak demand or increased costs could make refining uneconomic for some refineries, including those directly or indirectly connected to our Refined Products and crude oil pipelines.

The closure of a refinery that delivers product to or receives crude oil from our pipelines could reduce the volumes we transport.

Further, the closure of these or other refineries could result in our customers electing to store and distribute Refined Products and crude oil through their proprietary terminals, which could result in a reduction in demand for our storage services.

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- product price differentials;

- location price differentials;

- seasonal price differentials;

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Any significant increase

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Our ability to use net operating losses and certain other tax attributes to offset future taxable income may be limited.

We currently have substantial U.S. federal net operating loss (“NOL”) carry forwards and other state tax attributes.

Our ability to use these tax attributes to reduce our future U.S. federal and state income tax obligations depends on many factors, including our future taxable income, the timing of which is uncertain.

In addition, our ability to use NOL carryforwards and other tax attributes may be subject to significant limitations under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) and corresponding provisions of state law.

Under Section 382 of the Code and corresponding provisions of state law, if a corporation undergoes an ownership change, which is generally defined as a greater than 50 percent change in its equity ownership over a three-year period, the company’s ability to utilize U.S. NOL carryforwards and other tax attributes may be limited.

Determining the limitation under Section 382 of the Code is highly complex.

We believe our U.S. NOL carryforwards and other tax attributes are not currently subject to a limitation as a result of an ownership change.

However, it is possible that an ownership change may occur in the future, which may materially impact our ability to use our U.S. NOL carryforwards and other tax attributes to reduce U.S. federal and state taxable income.

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Rate regulation, challenges by shippers of the rates we charge for transportation on our pipelines or changes in the jurisdictional characterization of our assets or activities by federal, state or local regulatory agencies may reduce the amount of cash we generate.

Our investors should consider the following risks that could affect us and our business.

Although we have tried to identify key factors, our investors need to be aware that other risks may prove to be important in the future.

New risks may emerge at any time, and we cannot predict such risks or estimate the extent to which they may affect our financial performance.

Investors should consider carefully the following discussion of risks and the other information included or incorporated by reference in this Annual Report, including “Forward-Looking Statements,” which are included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Volatility in commodity prices may have an impact on many

For example, in March 2020, unsuccessful negotiations between the Organization of the Petroleum Exporting Countries (OPEC) and Russia regarding crude oil production cuts resulted in a price war between Saudi Arabia and Russia.

As a result, the global supply of crude oil significantly exceeded demand and led to a collapse in crude oil prices.

While the

For residential customers, heating and cooling represent their largest energy use.

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

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.

In our Natural Gas Pipelines segment, the displacement of natural gas originating in supply areas connected to our pipeline systems by supply sources that are closer to the end-use markets could reduce demand for our services.

- the price differentials between the individual purity NGLs with respect to our NGL transportation and fractionation agreements;

- the location price differentials in the price of natural gas and NGLs;

- the seasonal price differentials in natural gas and NGLs related to our storage operations;

We use software to help manage and operate our businesses, and this may subject us to increased risks.

distribution policies of our unconsolidated affiliates.

The COVID-19 pandemic has affected adversely, and could further affect adversely, our results of operations.

The COVID-19 pandemic led to global and regional economic disruption, volatility in the financial markets and a weakened commodity price environment.

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

Uncertainty remains regarding the duration of global impacts due to COVID-19.

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, including our executive officers, creating operational challenges and impacting our ability to access capital markets.

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

The degree to which the pandemic further impacts our business and results of operations will depend on future developments beyond our control, including the success of vaccination efforts and the effectiveness of such vaccines against future mutations of the COVID-19 virus, how quickly and to what extent economic and operating conditions resume to pre-COVID-19 levels, and the severity and duration of reduced global and regional economic activity resulting from the pandemic.

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.

such initiatives, when they will become effective or the impact on our capital expenditures, competitive position and results of operations.

Our $2.5 Billion Credit Agreement contains provisions that restrict our ability to finance future operations or capital needs or to expand or pursue our business activities.

We could also face

- increased regulatory requirements.

This shortage of skilled labor could continue over an extended period.

Any failure to maintain effective internal

| | | | | | | [removed: *(Millions] [added: | | | | | | (*Millions] of [removed: dollars)*] [added: dollars*)] | | | [added: | | | | | | | | | | | | | | | | | |]

For additional information on the Medford [removed: incident,] [added: Incident,] see [added: Part II, Item 8,] Note [removed: B] [added: C] of the Notes to Consolidated Financial Statements in this Annual Report.

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

The remaining $830 million was received in the first quarter [added: of] 2023.

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

Ethane [removed: Production] [added: Economics] - Price differentials between ethane and natural gas can cause natural gas processors to [removed: extract] [added: recover] ethane or leave it in the natural gas stream, known as ethane rejection.

Ethane volumes under long-term contracts delivered to our NGL system increased [removed: approximately 20] [added: 25] MBbl/d to an average of [removed: 450] [added: 475] MBbl/d [removed: in 2022,] [added: during 2023,] compared with [removed: 430] [added: an average of 450] MBbl/d in [removed: 2021,] [added: 2022,] due primarily to changes in ethane extraction economics.

We estimate that there are [removed: more than 225] [added: approximately 250] MBbl/d of discretionary ethane, consisting of [removed: more than 125] [added: approximately 150] MBbl/d in the Rocky Mountain region and approximately 100 MBbl/d in the Mid-Continent region, that [removed: can] [added: could] be recovered and transported on our system.

[added: Capital Projects \-] Our primary [removed: capital-growth] [added: capital] projects are outlined in the table below:

| [removed: Natural] [added: Natural] Gas Gathering and [removed: Processing] [added: Processing] | | | | | | [removed: (*In millions*)] [added: $] | [added: 1,244] | | | | | [added: $ | 1,037 | | | | | $ | 889 | |]

| Natural Gas Liquids | | | | | | [added: *(In millions)*] | | | | | |

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

| Viking compressor stations | | | Electrification and replacement of certain compressor assets | | | [removed: $95] [added: $110] | | | [removed: Third Quarter 2023] [added: Completed] | | |

The net proceeds, after deducting underwriting discounts, commissions and offering expenses, were [removed: $742 million.][added: $5.2 billion.]

In [removed: July 2022,] [added: June 2023,] we redeemed [removed: the remaining $895.8 million of] our [removed: 3.375%] [added: $500 million, 7.5%] senior notes due [removed: October 2022] [added: September 2023] at 100% of the principal amount, plus accrued and unpaid interest, with cash on [removed: hand and short-term borrowings.][added: hand.]

[removed: We expect the redemption price to equal] [added: In February 2023, we redeemed our $425 million, 5.0% senior notes due September 2023 at] 100% of the principal [removed: amount of the notes,] [added: amount,] plus accrued and unpaid interest, [removed: which we will pay] with cash on hand.

Dividends - During [removed: 2022,] [added: 2023,] we paid common stock dividends totaling [removed: $3.74] [added: $3.82] per share, [removed: which is consistent with] [added: an increase of 2% compared to] the [removed: prior year.][added: 2022 dividend of $3.74 per share.]

In February [removed: 2023,] [added: 2024,] we paid a quarterly common stock dividend of [removed: $0.955] [added: $0.99] per share [removed: ($3.82] [added: ($3.96] per share on an annualized basis), an increase of [removed: 2%] [added: 3.7%] compared with the same quarter in the prior year.

Adjusted EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, noncash impairment charges, income taxes, [removed: allowance for equity funds used during construction,] noncash compensation expense and certain other noncash items.

| | | | | | | Years Ended December 31, | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | |

| Financial Results | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | $ Increase (Decrease) | | | | | | | | |

| Cost of sales and fuel (exclusive of items shown separately below) | | | | | | [removed: 17,909.9] [added: 11,929] | | | | | | [removed: 12,256.7] [added: 17,910] | | | | | | [removed: 5,110.1] [added: 12,257] | | | | | | [removed: 5,653.2] [added: (5,981)] | | | | | | [removed: 7,146.6] [added: 5,653] | | |

| Equity in net earnings from investments [added: (a)] | | | | | | [removed: $] [added: —] | [removed: 147.7] | | | | | [removed: $] [added: 5] | [removed: 122.5] | | | | | [removed: $] [added: 4] | [removed: 143.2] | | | | | [removed: 25.2] [added: (5)] | | | | | | [removed: (20.7)] [added: 1] | | |

| Diluted EPS | | | | | | $ | [removed: 3.84] [added: 5.48] | | | | | $ | [removed: 3.35] [added: 3.84] | | | | | $ | [removed: 1.42] [added: 3.35] | | | | | [removed: 0.49] [added: 1.64] | | | | | | [removed: 1.93] [added: 0.49] | | |

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

[removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] \- Operating income increased [removed: $211.1 million] [added: $1.3 billion] primarily as a result of the following:

*•Natural Gas Gathering and Processing* - an increase of [removed: $127.7 million due primarily to higher realized commodity prices, net of hedging, and higher average fee rates and $53.8] [added: $227] million from higher volumes in the Rocky Mountain and Mid-Continent [removed: regions; *and*][added: regions and an increase of $49 million due primarily to higher average fee rates;]

- [removed: *Consolidated Operating Costs -*] an increase of [removed: $82.7] [added: $62] million [added: in operating costs] due primarily to higher [added: employee-related costs,] outside [removed: services,] [added: services and] materials and supplies expense [removed: and property taxes, related] [added: due] primarily to the growth of our [removed: operations.][added: operations, and higher property insurance premiums.]

Net income and diluted EPS increased due primarily to the items discussed above, [removed: lower interest expense related to increased capitalized interest and lower debt balances and] higher equity in net earnings from [removed: investments.][added: investments, higher interest income due to both higher cash balances and higher interest rates and net gains on extinguishment of debt related to open market repurchases.]

Capital expenditures increased due primarily to our [removed: capital-growth] [added: capital] projects, including [removed: the construction of] our [removed: Demicks Lake III natural gas processing plant, our MB-5 fractionator] [added: MB-6 fractionator, NGL pipeline expansion projects] and the Viking compression project.

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

Selected Financial Results and Operating Information for the Year Ended December 31, [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] \- The consolidated and segment financial results and operating information for the year ended December 31, [removed: 2021,] [added: 2022,] compared with the year ended December 31, [removed: 2020,] [added: 2021,] are included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our [removed: 2021] [added: 2022] 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.

[removed: Growth] [added: Capital] Projects - Our Natural Gas Gathering and Processing segment [removed: has invested] [added: invests] in [removed: growth] [added: capital] projects in NGL-rich areas [removed: in the Williston Basin.][added: where we operate.]

See [removed: “Growth] [added: “Capital] Projects” in the “Recent Developments” section for [added: a] discussion of our [removed: capital-growth] [added: capital] projects.

| | | | | | | (*Millions of dollars*) | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | |]

| Gathering, compression, dehydration and processing fees and other revenue | | | | | | [removed: 168.9] [added: 179] | | | | | | [removed: 156.4] [added: 169] | | | | | | [removed: 159.2] [added: 156] | | | | | | [removed: 12.5] [added: 10] | | | | | | [removed: (2.8)] [added: 13] | | |

| Cost of sales and fuel (exclusive of depreciation and operating costs) | | | | | | [removed: (5,116.6)] [added: (28)] | | | | | | [removed: (3,226.1)] [added: (25)] | | | | | | [removed: (844.0)] [added: (11)] | | | | | | [removed: 1,890.5] [added: 3] | | | | | | [removed: 2,382.1] [added: 14] | | |

| Operating costs, excluding noncash compensation adjustments | | | | | | [removed: (386.6) | | | | | | (351.4) | | | | | | (320.0) | | | | | | 35.2 | | | | | | 31.4] [added: (192)] | | |

| Equity in net earnings [removed: (loss)] from investments [added: (a)] | | | | | | [removed: 4.9] [added: —] | | | | | | [removed: 3.8] [added: 35] | | | | | | [removed: (1.1)] [added: 21] | | | | | | [removed: 1.1] [added: (35)] | | | | | | [removed: 4.9] [added: 14] | | |

[removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] - Adjusted EBITDA increased [removed: $147.5] [added: $207] million, primarily as a result of the following:

Magellan Acquisition - On September 25, 2023, we completed the Magellan Acquisition.

The acquisition strategically diversifies our complementary asset base and allows for significant expected synergies.

Pursuant to the Merger Agreement, each common unit of Magellan was exchanged for a fixed ratio of 0.667 shares of ONEOK common stock and $25.00 of cash, for a total consideration of $14.1 billion.

In addition, we assumed Magellan's debt at the fair value of $4.0 billion.

We issued approximately 135 million shares of common stock, with a fair value of approximately $9.0 billion as of the closing date of the Magellan Acquisition.

We funded the cash portion of the acquisition with an underwritten public offering of $5.25 billion senior unsecured notes.

For additional information on the Magellan Acquisition, see Part II, Item 8, Note B of the Notes to Consolidated Financial Statements in this Annual Report.

See Part 1, Item 1A “Risk Factors” for further discussion of risks related to the Magellan Acquisition.

Additional information regarding the financial results and operating information of our Refined Products and Crude segment subsequent to the closing of the Magellan Acquisition is provided in “Financial Results and Operating Information.”

Market Condition - We experienced increased volumes across our system in 2023, compared with 2022, highlighting our extensive and integrated assets located in, and connected with, some of the most productive shale basins, refining regions and demand centers, in the United States.

The remaining $830 million was received in the first quarter of 2023, resulting in a one-time settlement gain of $779 million.

The Medford incident resulted in an increase in operating income and adjusted EBITDA of $663 million, from the settlement gain of $779 million, offset partially by $146 million of third-party fractionation costs compared with an approximately $30

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million unfavorable impact of the 45-day waiting period in the year ended December 31, 2022.

| West Texas NGL pipeline expansion | | | Increase capacity to 740 MBbl/d in the Permian Basin | | | $520 | | | First Quarter 2025 | | |

| Elk Creek pipeline expansion | | | Increase capacity to 435 MBbl/d out of the Rocky Mountain region | | | $355 | | | First Quarter 2025 | | |

Debt Issuances - In August 2023, we completed an underwritten public offering of $5.25 billion senior unsecured notes consisting of $750 million, 5.55% senior notes due 2026; $750 million, 5.65% senior notes due 2028; $500 million, 5.80% senior notes due 2030; $1.5 billion, 6.05% senior notes due 2033; and $1.75 billion, 6.625% senior notes due 2053.

The net proceeds were used to fund the cash consideration and other costs related to the Magellan Acquisition.

Debt Repayments \- In 2023, we repurchased in the open market outstanding principal of certain of our senior notes in the amount of $322 million for an aggregate repurchase price of $280 million, including accrued and unpaid interest, with cash on hand.

In connection with these open market repurchases, we recognized $41 million of net gains on extinguishment of debt.

Share Repurchase Program - In January 2024, our Board of Directors authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock and targets the program to be largely utilized over the next four years.

We expect shares to be acquired from time to time in open-market transactions or through privately negotiated transactions at our discretion, subject to market conditions and other factors.

We expect any purchases to be funded by cash on hand, cash flow from operations and short-term borrowings.

The program will terminate upon completion of the repurchase of $2.0 billion of common stock or on January 1, 2029, whichever occurs first.

As of February 20, 2024, no shares have been repurchased under the program.

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Following the Magellan Acquisition, we performed a review of our calculation methodology of adjusted EBITDA, and beginning in 2023, we updated our calculation to include the adjusted EBITDA related to our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments.

In prior periods, our calculation included equity in net earnings from investments.

This change resulted in an additional $62 million of adjusted EBITDA in 2023, and we have not restated prior periods.

Adjusted EBITDA from our unconsolidated affiliates is calculated consistently with the definition above and excludes items such as interest, depreciation, income taxes and other noncash items.

Although the amounts related to our unconsolidated affiliates are included in the calculation of adjusted EBITDA, such inclusion should not be understood to imply that we have control over the operations and resulting revenues, expenses or cash flows of such unconsolidated affiliates.

| Commodity sales | | | | | | $ | 15,614 | | | | | $ | 20,976 | | | | | $ | 15,180 | | | | | (5,362) | | | | | | 5,796 | | |

| Services | | | | | | 2,063 | | | | | | 1,411 | | | | | | 1,360 | | | | | | 652 | | | | | | 51 | | |

| Total revenues | | | | | | 17,677 | | | | | | 22,387 | | | | | | 16,540 | | | | | | (4,710) | | | | | | 5,847 | | |

| Operating costs | | | | | | 1,535 | | | | | | 1,149 | | | | | | 1,067 | | | | | | 386 | | | | | | 82 | | |

| Depreciation and amortization | | | | | | 769 | | | | | | 626 | | | | | | 622 | | | | | | 143 | | | | | | 4 | | |

| Transaction costs | | | | | | 158 | | | | | | — | | | | | | — | | | | | | 158 | | | | | | — | | |

| Other operating income, net | | | | | | (786) | | | | | | (105) | | | | | | (2) | | | | | | 681 | | | | | | 103 | | |

| Operating income | | | | | | $ | 4,072 | | | | | $ | 2,807 | | | | | $ | 2,596 | | | | | 1,265 | | | | | | 211 | | |

| Equity in net earnings from investments | | | | | | $ | 202 | | | | | $ | 148 | | | | | $ | 122 | | | | | 54 | | | | | | 26 | | |

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 | | | | | | | | |

| 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.

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.

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.

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

| Demicks Lake III plant | | | 200 MMcf/d processing plant in the core of the Williston Basin | | | $188 | | | Completed | | |

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

Debt Issuances and Repayments \- In November 2022, we completed an underwritten public offering of $750 million, 6.1% senior unsecured notes due 2032.

The proceeds were used primarily to repay all outstanding amounts under our commercial paper program.

The remainder was used for general corporate purposes.

Subsequent event - We elected to redeem our $425 million, 5.0% senior notes due September 2023, with a redemption effective date in late February 2023.

| Commodity sales | | | | | | $ | 20,975.5 | | | | | $ | 15,180.3 | | | | | $ | 7,255.2 | | | | | 5,795.2 | | | | | | 7,925.1 | | |

| Services | | | | | | 1,411.4 | | | | | | 1,360.0 | | | | | | 1,287.0 | | | | | | 51.4 | | | | | | 73.0 | | |

| Total revenues | | | | | | 22,386.9 | | | | | | 16,540.3 | | | | | | 8,542.2 | | | | | | 5,846.6 | | | | | | 7,998.1 | | |

| Operating costs | | | | | | 1,149.7 | | | | | | 1,067.0 | | | | | | 886.1 | | | | | | 82.7 | | | | | | 180.9 | | |

| Depreciation and amortization | | | | | | 626.1 | | | | | | 621.7 | | | | | | 578.7 | | | | | | 4.4 | | | | | | 43.0 | | |

Our exposure to market risk discussed below includes forward-looking statements and represents an estimate of possible changes in future earnings that could occur assuming hypothetical future movements in interest rates or commodity [removed: prices.][added: prices within our derivative portfolio.]

Our risk-management function follows policies and procedures established by our Risk Oversight and Strategy Committee to monitor our natural gas, [added: NGL, Refined Products,] condensate and [removed: NGL] [added: crude oil] marketing activities and interest rates to ensure our hedging activities mitigate market risks and comply with approved thresholds or limits.

See Note A of the Notes to Consolidated Financial Statements in this Annual Report for [added: a] discussion on our accounting policies for our derivative instruments and the impact on our Consolidated Financial Statements.

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

| Commodity Contracts | | | December 31, [removed: 2022] [added: 2023] | | | | | | December 31, [removed: 2021] [added: 2022] | | |

| [removed: Crude] [added: Refined Products, crude] oil and NGLs | | | $ | [removed: 34.6] [added: 67] | | | | | $ | [removed: 40.6] [added: 35] | |

| Natural gas | | | [removed: 18.0] [added: 5] | | | | | | [removed: 11.5] [added: 18] | | |

| Total change in estimated fair value of commodity contracts | | | $ | [removed: 52.6] [added: 72] | | | | | $ | [removed: 52.1] [added: 53] | |

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 [added: actual results that may occur.]

We are exposed to interest-rate risk through borrowings under our $2.5 Billion Credit Agreement, commercial paper [removed: program] [added: program, term loan agreements] and long-term debt issuances.

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

[removed: We simultaneously entered into] [added: At December 31, 2022, we had] forward-starting interest-rate swaps with [removed: the same] notional amounts [removed: at current market rates] [added: totaling $0.4 billion] to hedge the variability of interest payments on a portion of our forecasted debt [removed: issuances that may result from changes in the benchmark interest rate before the debt is issued.][added: issuances.]

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

We assess the creditworthiness of our counterparties on an ongoing basis and require security, including [removed: prepayments] [added: prepayments, letters of credit, liens] and other forms of collateral, when appropriate.

In [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] approximately [removed: 95%] [added: 90%] and [removed: 90%,] [added: 95%,] 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 [removed: analysis,] [added: analysis] or were secured by letters of credit or other collateral.

In [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] approximately 85% [removed: and 70%, respectively,] of this segment’s commodity sales were made to customers rated investment-grade by S&P, approved through comparable internal counterparty [removed: analysis,] [added: analysis] or were secured by letters of credit or other collateral.

In [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] approximately 90% [removed: and 85%, respectively,] of our revenues in this segment were from customers rated investment-grade by S&P, approved through comparable internal counterparty [removed: analysis,] [added: analysis] or were secured by letters of credit or other collateral.

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Treasury locks are agreements to pay the difference between the benchmark Treasury rate and the rate that is designated in the terms of the agreement.

In the second quarter of 2023, we entered into $1.1 billion of Treasury locks to hedge the variability of interest payments on a portion of our forecasted debt issuances.

In the third quarter of 2023, we settled all of our Treasury locks related to our underwritten public offering of $5.25 billion senior unsecured notes associated with the Magellan Acquisition.

At both December 31, 2023, and December 31, 2022, we had no outstanding Treasury lock agreements.

In the third quarter of 2023, we settled all of our $0.4 billion forward-starting interest-rate swaps related to our underwritten public offerings of $5.25 billion senior unsecured notes associated with the Magellan Acquisition.

At December 31, 2023, we had no outstanding forward-starting interest-rate swaps.

*Refined Products and Crude -* Our Refined Products and Crude segment’s customers include refiners, wholesalers, retailers, traders, railroads, airlines and regional farm cooperatives.

In the fourth quarter of 2023, approximately 70% 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, liens, or other collateral.

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Although our businesses are primarily fee-based, in our Natural Gas Gathering and Processing segment, we are exposed to commodity price risk as a result of retaining a portion of the commodity sales proceeds associated with our fee with POP contracts.

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

We are exposed to basis risk between the various production and market locations where we buy and sell commodities.

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

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

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 period indicated:

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

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

| | | | | | | Year Ending December 31, 2023 | | | | | | | | | | | | | | | | | |

| | | | | | | Volumes Hedged | | | | | | Average Price | | | | | | | | | Percentage Hedged | | |

| NGLs - excluding ethane (*MBbl/d*) - Conway/Mont Belvieu | | | | | | 10.7 | | | | | | $ | 1.23 | | / gallon | | | | | | 67% | | |

| Condensate (*MBbl/d*) - WTI-NYMEX | | | | | | 1.7 | | | | | | $ | 85.48 | | / Bbl | | | | | | 67% | | |

| Natural gas (*BBtu/d*) - NYMEX and basis | | | | | | 99.2 | | | | | | $ | 3.50 | | / MMBtu | | | | | | 75% | | |

| | | | | | | Year Ending December 31, 2024 | | | | | | | | | | | | | | | | | |

| Natural gas (*BBtu/d*) - NYMEX and basis | | | | | | 16.2 | | | | | | $ | 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, 2022.

Condensate sales are typically based on the price of crude oil.

Assuming normal operating conditions, we estimate the following for our forecasted equity volumes:

- a $0.01 per gallon change in the composite price of NGLs, excluding ethane, would change adjusted EBITDA for the years ending December 31, 2023 and 2024, by $2.5 million and $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, 2023 and 2024, by $0.9 million and $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, 2023 and 2024, by $4.8 million and $5.2 million, respectively.

These estimates do not include any effects of hedging or effects on demand for our services or natural gas processing plant operations that might be caused by, or arise in conjunction with, commodity price fluctuations.

For example, a change in the gross processing spread may cause a change in the amount of ethane extracted from the natural gas stream, impacting gathering and processing financial results for certain contracts.

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.

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

All of our interest-rate swaps are designated as cash flow hedges.

At December 31, 2022 and 2021, we had derivative assets of $10.9 million and derivative liabilities of $145.5 million, respectively, related to these interest-rate swaps.

The following table presents the effect of a 10% hypothetical change in interest rates on the estimated fair value of our interest-rate derivative instruments as of the dates indicated:

| | | | December 31, 2022 | | | | | | December 31, 2021 | | |

| Forward-starting interest-rate swaps | | | $ | 13.0 | | | | | $ | 19.6 | |

Our sensitivity analysis represents an estimate of the reasonably possible gains and losses that would be recognized on our interest-rate derivative contracts assuming hypothetical movements in future interest rates and is not necessarily indicative of actual results that may occur.

Actual gains and losses may differ from estimates due to actual fluctuations in interest rates, as well as changes in our interest-rate derivative portfolio during the year.

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

[removed: | | | | | | | Natural Gas Gathering & Processing | | | | | | | | | | | |][added: - 17,400 miles of natural gas gathering pipelines;]

[removed: | | | | | | |] [added: -] Natural Gas [removed: Liquids | | | | | | | | | | | |][added: Liquids;]

[removed: | | | | | | |] [added: -] Natural Gas [removed: Pipelines | | | | | | | | | | | |][added: Pipelines; and]

[removed: | Raw natural gas is typically gathered at the wellhead, compressed and transported through pipelines to our processing facilities.] Most raw natural gas produced at the wellhead also contains a mixture of NGL components, including ethane, propane, iso-butane, normal butane and natural gasoline. [removed: | | | | | | | | | | | | | | | | | |]

[removed: |] Gathered wellhead natural gas is directed to our processing plants to remove [removed: NGLs,] [added: NGLs] resulting in residue natural gas (primarily methane). [removed: | | | | | | | | | | | | Once processed, residue natural gas is recompressed and delivered to intrastate and interstate natural gas pipelines primarily in our Natural Gas Pipelines segment. | | | | | |]

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

[removed: |] [added: Overview of Operations - In our Natural Gas Liquids segment,] NGLs [added: that are] extracted at natural gas processing plants, both third-party and our own, are [removed: then] gathered by our NGL gathering pipelines. [removed: | | | | | | | | | | | | | | | | | |]

[removed: |] Gathered NGLs are directed to our downstream fractionators in the Mid-Continent [removed: region] and [removed: Mont Belvieu, Texas,] [added: Gulf Coast regions] to be separated into [removed: purity products. | | | | | | | | | | | | | | | | | |][added: Purity NGLs.]

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

[removed: |] Purity [removed: products] [added: NGLs] are stored or distributed to our customers, such as petrochemical companies, propane distributors, heating fuel users, ethanol producers, refineries and exporters. [removed: | | | | | | | | | | | | | | | | | |]

Each of our [removed: three] [added: four reportable] segments are primarily fee-based, and our consolidated earnings were [removed: approximately 90%] [added: more than 85%] fee-based in [removed: 2022.][added: 2023.]

[removed: While our Natural Gas Gathering and Processing segment’s earnings are primarily fee-based, we have direct commodity price exposure related primarily to our fee with POP contracts, and we] [added: We] have hedged approximately [removed: 70%] [added: 60%] of our forecasted equity volumes for [removed: 2023.][added: our Natural Gas Gathering and Processing segment in 2024.]

[removed: Medford Incident - On] [added: In] July [removed: 9,] 2022, a fire occurred at our 210 MBbl/d Medford, Oklahoma, [removed: NGL] [added: natural gas liquids] fractionation facility.

[removed: On] [added: Medford Incident - In] January [removed: 9,] 2023, we reached an agreement with our insurers to settle all claims for physical damage and business interruption related to the Medford [removed: incident.][added: incident that occurred at our 210 MBbl/d Medford, Oklahoma, NGL fractionation facility in July 2022.]

The remaining $830 million was received in the first quarter [removed: 2023.][added: of 2023, resulting in a one-time settlement gain of $779 million.]

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

See [added: “Recent Developments” in] Part II, Item 7, [removed: Recent Developments,] [added: Management’s Discussion and Analysis of Financial Condition and Results of Operations,] in this Annual Report for more information on [removed: the Medford incident.][added: our capital projects.]

[removed: Winter weather - In the second and fourth quarters of 2022, we experienced] [added: Our 2022 utilization rates were impacted by] winter weather [removed: events] in the Rocky Mountain region [removed: that brought disruptions to our operations.][added: in the second and fourth quarters of 2022.]

Sustainability and Social Responsibility \- [removed: In 2023,] [added: Through our participation in the 2023 S&P Global Corporate Sustainability Assessment,] we qualified for inclusion in the S&P Global Sustainability Yearbook for the [removed: third year in a row.][added: fourth consecutive year, scoring within the top 15% of the Oil and Gas Storage and Transportation industry.]

Additionally, in [removed: 2022, our] [added: 2023, we received an MSCI] ESG [removed: Risk] Rating [removed: was in the lowest-risk quintile] of [removed: the Sustainalytics’ refiners] [added: AAA,] and [removed: pipelines industry, indicating that] our ESG [removed: risk management is] [added: Risk Rating, as assessed by Morningstar Sustainalytics, was] in the top 20% of [removed: our] [added: the refiners and pipelines] industry.

In [removed: September] 2021, we announced a companywide absolute GHG emissions reduction target of 2.2 million metric tons of carbon dioxide equivalents from our combined Scope 1 and Scope 2 GHG emissions by 2030.

[added: 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 [removed: 0.5] [added: 1.1] 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.

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

Natural Gas - In our Natural Gas Gathering and Processing segment, [removed: we benefited from] [added: processed volumes] increased [removed: volumes, higher realized commodity prices, net of hedging, and higher average fee rates] in [removed: 2022,] [added: 2023,] compared with [removed: 2021,] [added: 2022,] due primarily to increased producer activity in the Rocky Mountain and Mid-Continent [removed: regions, offset partially by] [added: regions and] the impact of winter weather in the Rocky Mountain region in [added: the second and fourth quarters of] 2022.

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

[removed: We are currently expanding the] [added: In 2023, we completed an expansion of our] injection capabilities of our Oklahoma natural gas storage facilities which [removed: will allow] [added: allowed] us to utilize and subscribe an additional 4 Bcf of our existing storage [removed: capacity, with expected completion in the second quarter 2023.][added: capacity.]

In addition, we [removed: have begun] [added: completed] the electrification of certain compression assets [removed: for] [added: on] Viking to [removed: improve the] [added: maintain] reliability of our operations while lowering our Scope 1 emissions from this equipment.

Viking [removed: will seek] [added: is seeking] to recover its investment in the project through a proposed [removed: change] [added: increase] in rates [removed: expected to be] filed in [removed: third quarter] [added: July] 2023.

NGLs - In our Natural Gas Liquids segment, we benefited from increased volumes [removed: and higher average fee rates] in [removed: 2022,] [added: 2023,] compared with [removed: 2021, from] [added: 2022, due primarily to] increased production in the [added: Permian Basin and] Rocky Mountain [removed: region and the Permian Basin, offset partially by higher costs.][added: region.]

See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this Annual Report for more information on our [removed: growth] [added: capital] projects, results of operations, liquidity and capital resources.

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

We continue to actively research opportunities that will complement our extensive [removed: midstream] assets and expertise, strengthening the role we expect to play in the transformation to a lower-carbon economy.

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

We report operations in the following [added: four] business segments:

[removed: ][added: ]

[removed: Overview -] Our Natural Gas Gathering and Processing segment provides [added: these] midstream services to producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma.

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

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

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 deliver energy products and services vital to an advancing world.

We are a leading midstream service provider of gathering, processing, fractionation, transportation, storage and marine export services.

As one of the largest diversified energy infrastructure companies in North America, we are delivering energy that makes a difference in the lives of people in the U.S. and around the world.

Through our more than 50,000-mile pipeline network, we transport the natural gas, NGLs, Refined Products and crude oil that help meet domestic and international energy demand, contribute to energy security and provide safe, reliable and responsible energy solutions needed today and into the future.

The midstream value chain is a vital part of the energy industry.

After crude oil and natural gas are produced from upstream wells, we use our extensive infrastructure to process and transport these raw materials, readying them for end use.

For transportation of crude oil, natural gas, Refined Products and NGLs, pipelines are generally the most reliable, lowest cost, least carbon intensive and safest alternative for intermediate and long-haul movements between markets.

[T](#i744ac9b651184fe6ad5bdf7abbd2f649_7)[able of Contents](#i744ac9b651184fe6ad5bdf7abbd2f649_7)

Magellan Acquisition \- On September 25, 2023, we completed the Magellan Acquisition.

The acquisition strategically diversifies our complementary asset base and allows for significant expected synergies.

Pursuant to the Merger Agreement, each common unit of Magellan was exchanged for a fixed ratio of 0.667 shares of ONEOK common stock and $25.00 of cash, for a total consideration of $14.1 billion.

In addition, we assumed Magellan’s debt at the fair value of $4.0 billion.

We issued approximately 135 million shares of common stock, with a fair value of approximately $9.0 billion as of the closing date of the Magellan Acquisition.

We funded the cash portion of the acquisition with an underwritten public offering of $5.25 billion senior unsecured notes.

For additional information on the Magellan Acquisition, see Part II, Item 8, Note B of the Notes to Consolidated Financial Statements in this Annual Report.

See Part 1, Item 1A “Risk Factors” for further discussion of risks related to the Magellan Acquisition.

Business Update and Market Conditions - We experienced increased volumes across our system in 2023, compared with 2022, highlighting our extensive and integrated assets located in, and connected with, some of the most productive shale basins, refining regions and demand centers in the United States.

Due to market demand and a more favorable completion schedule, in January 2023, we announced plans to construct a new 125 MBbl/d MB-6 NGL fractionator in Mont Belvieu, Texas, instead of immediately rebuilding our Medford NGL fractionator.

The MB-6 fractionator is expected to be in service in the first quarter of 2025 and will 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 comparable to the capacity lost at Medford.

In addition, our 125 MBbl/d MB-5 NGL fractionator was completed in April 2023, which has reduced the need for third-party fractionation while the new MB-6 fractionator is being constructed.

For additional information on the Medford Incident, see Part II, Item 8, Note C of the Notes to Consolidated Financial Statements in this Annual Report.

Capital Allocation - We continue to focus on maintaining prudent financial strength and flexibility.

In January 2024, our Board of Directors increased our quarterly dividend to 99 cents per share and announced a targeted 3% to 4% annual dividend growth rate.

Our Board of Directors also authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock and targets it to be largely utilized over the next four years.

Additionally, in the fourth quarter of 2023, we opportunistically repurchased in the open market $322 million of our senior notes at a discount to par value using operating cash flows.

At December 31, 2023, we had $338 million of cash and cash equivalents and no borrowings under our $2.5 Billion Credit Agreement.

In 2023, we qualified for inclusion in the Dow Jones Sustainability North American Index, part of the Dow Jones Sustainability Indices, which recognizes global sustainability leaders.

We continue to

[T](#i744ac9b651184fe6ad5bdf7abbd2f649_7)[able of Contents](#i744ac9b651184fe6ad5bdf7abbd2f649_7)

In February 2024, the FERC approved our Saguaro Connector Pipeline, L.L.C.’s Presidential Permit application to construct and operate new international border-crossing facilities at the U.S. and Mexico border.

The proposed border facilities would connect upstream with a potential intrastate pipeline, the Saguaro Connector pipeline.

Additionally, the proposed border facilities would connect at the international boundary with a new pipeline under development in Mexico for delivery to a liquefied natural gas export facility on the west coast of Mexico.

The final investment decision on the Saguaro Connector pipeline is expected by mid-year 2024.

In addition to construction of our MB-6 fractionator, activities are underway to complete the looping of the West Texas NGL pipeline, which will more than double our NGL capacity out of the Permian Basin.

The full loop is expected to be in service in the first quarter of 2025.

We also have begun initial work, primarily on long-lead-time components, towards expanding the Elk Creek pipeline to 435 MBbl/d to provide capacity for growing volumes in the Rocky Mountain region, which will bring our total pipeline capacity out of the Rocky Mountain region to 575 MBbl/d.

The Elk Creek pipeline expansion is expected to be in service in the first quarter of 2025.

Refined Products and Crude - Our 2023 results include the period from September 25, 2023, to December 31, 2023.

During this time, we benefited from mid-year tariff increases and long-haul shipments of Refined Products, as well as increased shipments on our crude oil system compared to the pre-acquisition period.

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 gathering, processing, fractionation, transportation and storage assets.

We apply our core capabilities of gathering, processing, fractionating, transporting, storing and marketing natural gas and NGLs through vertical integration across the midstream value chain to provide our customers with premium services while generating consistent and sustainable earnings growth.

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

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

| | | | | | | | | | | | | 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 Basins, and the SCOOP 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 SCOOP 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 SCOOP and STACK areas; Kansas; and the Texas Panhandle. We also have a significant presence in the Permian Basin. | | | | | |

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.

In addition, our Natural Gas Gathering and Processing and Natural Gas Liquids segments are exposed to volumetric risk as a result of drilling and well completion activity, severe weather disruptions, operational outages, global crude oil, NGL and natural gas 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 long-term, firm fee-based contracts.

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

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

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.

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.

See Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in this Annual Report for more information on our exposure to market risk.

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.

The target represents a 30%

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.

We expect additional earnings benefit in 2023 due to the completion of our 200 MMcf/d Demicks Lake III natural gas processing plant in the first quarter, which increased our total processing capacity to approximately 1.9 Bcf/d in the Williston Basin.

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

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

In addition, we expect to benefit from the completion of our 125 MBbl/d MB-5 fractionator in Mont Belvieu, Texas, in the second quarter 2023.

business diversification.

- Maximizing total shareholder return - we plan to grow earnings and sustain our dividend by efficiently allocating capital to investments that produce returns above our cost of capital.

- Natural Gas Liquids; and

- Natural Gas Pipelines.

We recently completed the construction of our 200 MMcf/d Demicks Lake III natural gas processing plant in the Williston Basin, which is included in the assets listed above.

We have elected to use a $1 million threshold for disclosing environmental proceedings.

For the fiscal year ended December 31, [removed: 2022.][added: 2023.]

[removed: ][added: ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [added: a] smaller reporting company or an emerging growth company.

Aggregate market value of registrant’s common stock held by non-affiliates based on the closing trade price on June 30, [removed: 2022,] [added: 2023,] was [removed: $24.5] [added: $27.4] billion.

On February [removed: 21, 2023,] [added: 20, 2024,] the Company had [removed: 447,220,972] [added: 583,159,446] 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: 24, 2023,] [added: 22, 2024,] are incorporated by reference in Part III.

[removed: 2022] [added: 2023] ANNUAL REPORT

| [Part [removed: I.](#i293bdc4d79a0408a99c0166c9640eb0f_13)] [added: I.](#i744ac9b651184fe6ad5bdf7abbd2f649_13)] | | | | | | | | | Page No. | | |

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| [Item [removed: 13.](#i293bdc4d79a0408a99c0166c9640eb0f_223)] [added: 13.](#i744ac9b651184fe6ad5bdf7abbd2f649_226)] | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i293bdc4d79a0408a99c0166c9640eb0f_223)] [added: Independence](#i744ac9b651184fe6ad5bdf7abbd2f649_226)] | | | | | | [removed: [104](#i293bdc4d79a0408a99c0166c9640eb0f_223)] [added: [106](#i744ac9b651184fe6ad5bdf7abbd2f649_226)] | | |

| [Item [removed: 14.](#i293bdc4d79a0408a99c0166c9640eb0f_226)] [added: 14.](#i744ac9b651184fe6ad5bdf7abbd2f649_229)] | | | [Principal Accounting Fees and [removed: Services](#i293bdc4d79a0408a99c0166c9640eb0f_226)] [added: Services](#i744ac9b651184fe6ad5bdf7abbd2f649_229)] | | | | | | [removed: [104](#i293bdc4d79a0408a99c0166c9640eb0f_226)] [added: [107](#i744ac9b651184fe6ad5bdf7abbd2f649_229)] | | |

| [Item [removed: 15.](#i293bdc4d79a0408a99c0166c9640eb0f_232)] [added: 15.](#i744ac9b651184fe6ad5bdf7abbd2f649_235)] | | | [Exhibits, Financial Statement [removed: Schedules](#i293bdc4d79a0408a99c0166c9640eb0f_232)] [added: Schedules](#i744ac9b651184fe6ad5bdf7abbd2f649_235)] | | | | | | [removed: [105](#i293bdc4d79a0408a99c0166c9640eb0f_232)] [added: [107](#i744ac9b651184fe6ad5bdf7abbd2f649_235)] | | |

| [Item [removed: 16.](#i293bdc4d79a0408a99c0166c9640eb0f_235)] [added: 16.](#i744ac9b651184fe6ad5bdf7abbd2f649_238)] | | | [Form 10-K [removed: Summary](#i293bdc4d79a0408a99c0166c9640eb0f_235)] [added: Summary](#i744ac9b651184fe6ad5bdf7abbd2f649_238)] | | | | | | [removed: [113](#i293bdc4d79a0408a99c0166c9640eb0f_235)] [added: [117](#i744ac9b651184fe6ad5bdf7abbd2f649_238)] | | |

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

| [removed: $1.5 Billion] [added: Guardian] Term Loan Agreement | | | [removed: The] [added: Guardian’s] senior unsecured [removed: delayed-draw] three-year [removed: $1.5 billion] [added: $120 million] term loan agreement dated [removed: November 19, 2018] [added: June 2022] | | |

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

| Annual Report | | | Annual Report on Form 10-K for the year ended December 31, [removed: 2022] [added: 2023] | | |

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

| [removed: Guardian] [added: Viking] Term Loan Agreement | | | [removed: Guardian’s] [added: Viking’s] senior unsecured three-year [removed: $120] [added: $60] million term loan agreement dated [removed: June 24, 2022] [added: March 2023] | | |

| [removed: Inflation Reduction Act] [added: IRA] | | | Inflation Reduction Act of 2022 | | |

| Intermediate Partnership | | | ONEOK Partners Intermediate Limited Partnership, a wholly owned subsidiary of [removed: ONEOK Partners, L.P.] [added: ONEOK.] | | |

| ONEOK Partners | | | ONEOK Partners, L.P., a wholly owned subsidiary of [removed: ONEOK, Inc.] [added: ONEOK] | | |

[T](#i744ac9b651184fe6ad5bdf7abbd2f649_7)[able of Contents](#i744ac9b651184fe6ad5bdf7abbd2f649_7)

| [Item 1C.](#i744ac9b651184fe6ad5bdf7abbd2f649_1968) | | | [Cybersecurity](#i744ac9b651184fe6ad5bdf7abbd2f649_1968) | | | | | | [40](#i744ac9b651184fe6ad5bdf7abbd2f649_1968) | | |

| [Part III.](#i744ac9b651184fe6ad5bdf7abbd2f649_214) | | | | | | | | | | | |

| [Part IV.](#i744ac9b651184fe6ad5bdf7abbd2f649_232) | | | | | | | | | | | |

| [Signatures](#i744ac9b651184fe6ad5bdf7abbd2f649_241) | | | | | | | | | [118](#i744ac9b651184fe6ad5bdf7abbd2f649_241) | | |

[T](#i744ac9b651184fe6ad5bdf7abbd2f649_7)[able of Contents](#i744ac9b651184fe6ad5bdf7abbd2f649_7)

| BridgeTex | | | BridgeTex Pipeline Company, LLC, a 30% owned joint venture | | |

| CERCLA | | | Comprehensive Environmental Response Cleanup and Liability Act, as amended | | |

| GWh | | | Gigawatt hour | | |

| HOU | | | Midland West Texas Intermediate American Gulf Coast Futures | | |

| LDC | | | Local distribution company | | |

| Magellan | | | Magellan Midstream Partners, L.P., a wholly owned subsidiary of ONEOK | | |

| Magellan Acquisition | | | The transaction completed on September 25, 2023, pursuant to which ONEOK acquired all of Magellan’s outstanding common units in a cash-and-stock transaction, pursuant to the Merger Agreement | | |

| Merger Agreement | | | Agreement and Plan of Merger of ONEOK, Otter Merger Sub, LLC and Magellan, dated May 14, 2023 | | |

[T](#i744ac9b651184fe6ad5bdf7abbd2f649_7)[able of Contents](#i744ac9b651184fe6ad5bdf7abbd2f649_7)

| MVP | | | MVP Terminalling, LLC, a 25% owned joint venture | | |

| RCRA | | | Resource Conservation and Recovery Act, as amended | | |

| RINs | | | Renewable Identification Numbers, which represent credits required for renewable fuel standard compliance | | |

| Refined Products | | | The output from crude oil refineries, including products such as gasoline, diesel fuel, aviation fuel, kerosene and heating oil | | |

| Saddlehorn | | | Saddlehorn Pipeline Company, LLC, a 30% owned joint venture | | |

[T](#i744ac9b651184fe6ad5bdf7abbd2f649_7)[able of Contents](#i744ac9b651184fe6ad5bdf7abbd2f649_7)

| | | | | | |

| [Part III.](#i293bdc4d79a0408a99c0166c9640eb0f_211) | | | | | | | | | | | |

| [Part IV.](#i293bdc4d79a0408a99c0166c9640eb0f_229) | | | | | | | | | | | |

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

| CFTC | | | United States Commodity Futures Trading Commission | | |

| LIBOR | | | London Interbank Offered Rate | | |

| MMBbl/d | | | Million barrels per day | | |

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

| WTI | | | West Texas Intermediate | | |

[T](#i744ac9b651184fe6ad5bdf7abbd2f649_7)[able of Contents](#i744ac9b651184fe6ad5bdf7abbd2f649_7)

Risk Management and Strategy - We are an essential critical infrastructure business, and cybersecurity is a high priority for our leadership and Board of Directors.

In 2021, the Transportation Security Administration (TSA) began releasing security directives establishing cybersecurity requirements for our industry.

We promptly responded to these directives when released and continue to work collaboratively with our government counterparts to improve security throughout our technology systems.

We engage in an annual comprehensive Enterprise Risk Management (ERM) process designed to identify and manage risk.

Our annual ERM assessment is designed to enable our Board of Directors to establish a mutual understanding with management of the effectiveness of our risk-management practices and capabilities, to review our risk exposures and to elevate certain key risks for discussion at the board level.

Our ERM program is overseen by our chief financial officer.

Our ERM process encompasses the identification and assessment of a broad range of risks, including cybersecurity, and the development and testing of controls to mitigate these risks.

In order to manage these cybersecurity risks, including our use of third-party software and cloud vendors, we have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information.

We take a cross-disciplinary approach to cybersecurity and physical security.

Our cybersecurity risk management program is integrated with our ERM program and shares common methodologies, reporting channels and governance processes that apply across the ERM program to other legal compliance, strategic, operational and financial risk areas.

Our program generally incorporates the guidelines of the widely utilized National Institute of Standards and Technology Cybersecurity Framework, though this does not imply we meet any particular technical standards, specifications or requirements.

In addition, we conduct risk assessments of third-party software and cloud vendors by utilizing security questionnaires prior to procurement.

On a regular basis, we engage consultants to conduct penetration tests and architecture design reviews.

As of the date of this report, we are not aware of any cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.

We face certain ongoing risks from cybersecurity threats that, if realized and material, may materially affect us, including our operations, business strategy, results of operations or financial condition.

See Part 1, Item 1A “Risk Factors” for a discussion of risks factors related to cybersecurity.

Governance - Security is governed by the Security Advisory team, an executive advisory committee composed of company officers, including our chief executive officer, our chief financial officer and our chief enterprise services officer, who meet regularly to evaluate ongoing security threats and incidents, to define policy and to prioritize initiatives.

This advisory team is chaired by our vice president of cybersecurity and physical security, who has more than twenty years of relevant experience in the field of cyber and physical security.

In his role, our vice president of cybersecurity and physical security also supervises efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which include briefings from internal security personnel, alerts and reports produced by security tools deployed in our technology infrastructure and threat intelligence and other information obtained from governmental, public or private sources, including external cybersecurity service providers.

Identified cybersecurity threats and incidents are monitored and assessed for materiality by this cross-functional Security Advisory team.

This assessment includes whether our Board of Directors should be informed of a threat or incident.

Cybersecurity risks are communicated and discussed with our Board of Directors at least annually in conjunction with our overall ERM program.

As part of its oversight responsibilities, our Board of Directors also receives frequent updates from executive management on our company’s physical and cybersecurity efforts.

[T](#i744ac9b651184fe6ad5bdf7abbd2f649_7)[able of Contents](#i744ac9b651184fe6ad5bdf7abbd2f649_7)

At February [removed: 21, 2023,] [added: 20, 2024,] there were [removed: 13,064] [added: 13,034] holders of record of our [removed: 447,220,972] [added: 583,159,446] outstanding shares of common stock.

The following performance graph compares the performance of our common stock with the S&P 500 Index, the Alerian Midstream Energy Select [added: Index, the S&P 500 Energy] Index and a ONEOK Peer Group during the period beginning on December 31, [removed: 2017,] [added: 2018,] and ending on December 31, [removed: 2022.][added: 2023.]

at December 31, [removed: 2017,] [added: 2018,] and at the End of Every Year Through December 31, [removed: 2022.][added: 2023.]

[removed: ][added: ]

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

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

| | | | [removed: | | |] [added: 2019] | | | | | | [removed: 2018] [added: 2020] | | | | | | [removed: 2019] | | | [added: 2021] | | | [removed: 2020] | | | [added: 2022] | | | [removed: 2021] | | | [removed: 2022] [added: 2023] | | |

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

(b) - The Alerian Midstream Energy Select Index measures the composite performance of approximately [removed: 29] [added: 25] North American energy infrastructure companies [removed: who] [added: that] are engaged in midstream activities involving energy commodities.

[T](#i744ac9b651184fe6ad5bdf7abbd2f649_7)[able of Contents](#i744ac9b651184fe6ad5bdf7abbd2f649_7)

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

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

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

| ONEOK, Inc. | | | $ | 147.77 | | | | | $ | 83.70 | | | | | | | | $ | 137.97 | | | | | $ | 164.05 | | | | | $ | 185.63 | |

| S&P 500 Index | | | $ | 131.49 | | | | | $ | 155.68 | | | | | | | | $ | 200.37 | | | | | $ | 164.08 | | | | | $ | 207.21 | |

| S&P 500 Energy Index (a) | | | $ | 111.81 | | | | | $ | 74.16 | | | | | | | | $ | 114.49 | | | | | $ | 189.40 | | | | | $ | 186.71 | |

| Alerian Midstream Energy Select Index (b) | | | $ | 121.76 | | | | | $ | 92.76 | | | | | | | | $ | 133.62 | | | | | $ | 158.45 | | | | | $ | 182.54 | |

| ONEOK Peer Group (c) | | | $ | 115.22 | | | | | $ | 84.74 | | | | | | | | $ | 115.08 | | | | | $ | 148.51 | | | | | $ | 174.65 | |

(a) - The S&P 500 Energy Index is a subindex of the S&P 500 that includes those companies classified as members of the energy sector.

Beginning in 2024, we will replace the Alerian Midstream Energy Select Index with the S&P 500 Energy Index as it is more relevant to our business subsequent to the Magellan Acquisition.

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

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

| 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 | |

We have audited the accompanying consolidated balance sheets of ONEOK, Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] 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: 2022,] [added: 2023,] including the related notes (collectively referred to as the “consolidated financial [removed: statements”).][added: statements”).We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).]

[removed: We also have audited] [added: Also in our opinion,] the [removed: Company's] [added: Company maintained, in all material respects, effective] internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: Framework] (2013) issued by the [removed: Committee of Sponsoring Organizations of the Treadway Commission (COSO).][added: 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: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023] in conformity with accounting principles generally accepted in the United States of America.

[removed: Management] [added: We] assessed [removed: property damage to the facility and] incurred costs and lost earnings related to business [removed: interruption,] [added: interruption and property damage to our facility,] as well as timing of recognition under applicable insurance recovery guidance, and recorded accruals of [removed: $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] [added: $151] million [removed: related to incurred costs] in [removed: excess of the deductible] [added: 2022 for insurance recoveries] that [removed: were probable of recovery, with an] offset [removed: to the operating and maintenance line item; and $96.1 million primarily related to third-party fractionation costs] [added: our] incurred [removed: subsequent to the 45-day business interruption waiting period, with an offset to other operating (income) expense.][added: costs and losses.]

[removed: February 28, 2023][added: | | | | | | | | | | | | | | | | | | | 2023 | | |]

| ONEOK, Inc. and Subsidiaries | | | | | | | | | | | | | | | | | | [removed: | | |]

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

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| | | | [removed: | | | (*Thousands] [added: *(Millions] of dollars, except per share amounts*) | | | | | | | | | | | | | | | [added: | | |]

| Cost of sales and fuel (exclusive of items shown separately below) | | | | | | [removed: 17,909,866] [added: 11,929] | | | | | | [removed: 12,256,655] [added: 17,910] | | | | | | [removed: 5,110,146] [added: 12,257] | | |

| Operations and maintenance | | | | | | [removed: 958,246] [added: 1,319] | | | | | | [removed: 900,420] [added: 958] | | | | | | [removed: 761,176] [added: 900] | | |

| Depreciation and amortization | | | | | | [removed: 626,132] [added: $] | [added: (621)] | | | | | [removed: 621,701] [added: $] | [added: (5)] | | | | | [removed: 578,662] [added: $] | [added: (626)] | |

| Other operating [removed: (income) expense,] [added: income,] net (Note [removed: B)] [added: C)] | | | | | | [removed: (106,229)] [added: (786)] | | | | | | [removed: (1,394)] [added: (105)] | | | | | | [removed: (1,327)] [added: (2)] | | |

| Operating income | | | | | | [removed: 2,807,419] [added: 4,072] | | | | | | [removed: 2,596,259] [added: 2,807] | | | | | | [removed: 1,361,357] [added: 2,596] | | |

| Equity in net earnings from investments (Note N) | | | | | | [removed: 147,720] [added: 202] | | | | | | [removed: 122,520] [added: 148] | | | | | | [removed: 143,241] [added: 122] | | |

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

| [removed: Allowance] [added: Capital expenditures (less allowance] for equity funds used during [removed: construction | | |] [added: construction)] | | | [removed: 2,551] [added: (1,595)] | | | | | | [removed: 1,682] [added: (1,202)] | | | | | | [removed: 23,662] [added: (697)] | | |

| Other income (expense), net | | | | | | [removed: (32,099)] [added: 89] | | | | | | [removed: (3,333)] [added: (29)] | | | | | | [removed: 24,672] [added: (1)] | | |

| Less: Preferred stock dividends | | | | | | [removed: 1,100] [added: 1] | | | | | | [removed: 1,100] [added: 1] | | | | | | [removed: 1,100] [added: 1] | | |

| Net income available to common shareholders | | | | | | $ | [removed: 1,721,121] [added: 2,658] | | | | | $ | [removed: 1,498,606] [added: 1,721] | | | | | $ | [removed: 611,709] [added: 1,499] | |

| Basic EPS (Note J) | | | | | | $ | [removed: 3.85] [added: 5.49] | | | | | $ | [removed: 3.36] [added: 3.85] | | | | | $ | [removed: 1.42] [added: 3.36] | |

| Diluted EPS (Note J) | | | | | | $ | [removed: 3.84] [added: 5.48] | | | | | $ | [removed: 3.35] [added: 3.84] | | | | | $ | [removed: 1.42] [added: 3.35] | |

| Average shares [removed: *(thousands)*] [added: *(millions)*] | | | | | | | | | | | | | | | | | | | | |

| Derivative amounts reclassified to net income, net of tax of [removed: $(60,019), $(69,134)] [added: $21, $(60)] and [removed: $(6,313),] [added: $(69),] respectively | | | | | | [removed: 200,933] [added: (66)] | | | | | | [removed: 228,999] [added: 201] | | | | | | [removed: 21,097] [added: 229] | | |

| Change in retirement and other postretirement benefit plan obligations, net of tax of [removed: $(15,761), $(14,929)] [added: $2, $(16)] and [removed: $7,812,] [added: $(15),] respectively | | | | | | [removed: 52,764] [added: (9)] | | | | | | [removed: 49,976] [added: 53] | | | | | | [removed: (26,154)] [added: 50] | | |

| Other comprehensive income (loss) of unconsolidated affiliates, net of tax of [removed: $(4,764), $(1,490)] [added: $1, $(5)] and [removed: $2,201,] [added: $(1),] respectively | | | | | | [removed: 15,947] [added: (5)] | | | | | | [removed: 4,991] [added: 16] | | | | | | [removed: (7,369)] [added: 5] | | |

| Total other comprehensive [removed: income (loss),] [added: income,] net of tax | | | | | | [removed: 363,095] [added: 75] | | | | | | [removed: 80,098] [added: 363] | | | | | | [removed: (177,449)] [added: 80] | | |

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

| | | | | | | [added: 2023 | | | | | |] 2022 | | | | | | 2021 | | |

| Assets | | | | | | [removed: (*Thousands] [added: *(Millions] of [removed: dollars*)] [added: dollars)*] | | | | | | | | |

| Cash and cash equivalents | | | | | | $ | [removed: 220,227] [added: 338] | | | | | $ | [removed: 146,391] [added: 220] | |

| Accounts receivable, net | | | | | | [removed: 1,532,292] [added: 1,705] | | | | | | [removed: 1,441,786] [added: 1,532] | | |

| Materials and supplies | | | | | | [removed: 148,985] [added: 148] | | | | | | [removed: 153,019] [added: 149] | | |

| Commodity imbalances | | | | | | [removed: 42,983] [added: 26] | | | | | | [removed: 39,609] [added: 43] | | |

| Property, plant and equipment | | | | | | [removed: 25,015,135] [added: 38,454] | | | | | | [removed: 23,820,539] [added: 25,015] | | |

| Accumulated depreciation and amortization | | | | | | [removed: 5,062,609] [added: 5,757] | | | | | | [removed: 4,500,665] [added: 5,063] | | |

| Net property, plant and equipment (Note [removed: E)] [added: F)] | | | | | | [removed: 19,952,526] [added: 32,697] | | | | | | [removed: 19,319,874] [added: 19,952] | | |

| [removed: Investments and other assets] [added: Other investments (c)] | | | | | | [added: —] | | | | | | [added: —] | | | [added: | | | — | | | | | | — | | | | | | 29 | | | | | | 29 | | |]

| Investments in unconsolidated affiliates (Note N) | | | | | | [removed: 801,794] [added: 1,874] | | | | | | [removed: 797,613] [added: 802] | | |

| Other assets | | | | | | [removed: 324,132] [added: 319] | | | | | | [removed: 366,457] [added: 324] | | |

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Magellan Midstream Partners, L.P., (“Magellan”) from its assessment of internal control over financial reporting as of December 31, 2023, because it was acquired by the Company in a purchase business combination during 2023.

We have also excluded Magellan from our audit of internal control over financial reporting.

Magellan is a wholly owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 32% and 6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

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*Acquisition of Magellan Midstream Partners, LP – Valuation of the Pipelines and Intangible Assets*

As described in Note B to the consolidated financial statements, the Company purchased Magellan on September 25, 2023.

Pursuant to the merger agreement, each common unit of Magellan was exchanged for a fixed ratio of 0.667 shares of ONEOK common stock and $25.00 of cash, for a total consideration of $14.1 billion.

In addition, the Company assumed Magellan’s debt with a fair value of $4.0 billion.

The acquisition resulted in the recognition of $11.8 billion of property, plant and equipment (PP&E), a significant portion of which relates to pipelines, and $1.0 billion of intangible assets, which relate to customer relationships.

The Magellan acquisition was accounted for using the acquisition method of accounting for business combinations, which requires, among other things, assets acquired and liabilities assumed to be recorded at their fair values on the acquisition date.

As disclosed by management, in order to estimate the fair value of assets acquired and liabilities assumed, management utilized valuation techniques that included discounted cash flow and cost methods.

The discounted cash flow method utilizes assumptions that include, but are not limited to, estimated future cash flows, discount rates applied to estimated future cash flows, estimated rates of return and estimated customer attrition rates.

Cost methods estimate the fair value of assets based on the estimated construction cost of the assets, and requires the use of various inputs and assumptions.

The principal considerations for our determination that performing procedures relating to valuation of the pipelines and intangible assets related to the acquisition of Magellan is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the pipelines and intangible assets acquired; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the estimated construction cost used to value the pipelines acquired, and the estimated future cash flows, discount rates applied to estimated future cash flows, estimated rates of return and estimated customer attrition rates used to value the intangible assets acquired; 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 acquisition accounting, including controls over management’s valuation of the pipelines and intangible assets related to the acquisition.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the pipelines and intangible assets acquired; (ii) evaluating the appropriateness of the cost method used to determine the fair value of the pipelines and the discounted cash flow model used to determine the fair value of the intangible assets (collectively the “valuation methods”); (iii) testing the completeness and accuracy of underlying data used in the valuation methods; and (iv) evaluating the reasonableness of the significant assumptions used by management related to the estimated construction cost used to value the pipelines acquired, and the estimated future cash flows, discount rates applied to estimated future cash flows, estimated rates of return and estimated customer attrition rates used to value the intangible assets acquired.

Evaluating management’s assumptions related to the estimated future cash flows used to value the intangible assets involved

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evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of Magellan and (ii) consistency with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the valuation methods and (ii) the reasonableness of the estimated construction cost used to value the pipelines, and discount rates applied to estimated future cash flows, estimated rates of return and estimated customer attrition rates used to value the intangible assets.

February 27, 2024

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| Commodity sales | | | | | | $ | 15,614 | | | | | $ | 20,976 | | | | | $ | 15,180 | |

| Services | | | | | | 2,063 | | | | | | 1,411 | | | | | | 1,360 | | |

| Total revenues (Note P) | | | | | | 17,677 | | | | | | 22,387 | | | | | | 16,540 | | |

| General taxes | | | | | | 216 | | | | | | 191 | | | | | | 167 | | |

| Transaction costs (Note B) | | | | | | 158 | | | | | | — | | | | | | — | | |

| Interest expense (net of capitalized interest of $43, $57 and $25, respectively) | | | | | | (866) | | | | | | (676) | | | | | | (733) | | |

| Income before income taxes | | | | | | 3,497 | | | | | | 2,250 | | | | | | 1,984 | | |

| Income taxes (Note M) | | | | | | (838) | | | | | | (528) | | | | | | (484) | | |

| Basic | | | | | | 484.3 | | | | | | 447.5 | | | | | | 446.4 | | |

| Diluted | | | | | | 485.4 | | | | | | 448.4 | | | | | | 447.4 | | |

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| Net income | | | | | | $ | 2,659 | | | | | $ | 1,722 | | | | | $ | 1,500 | |

| Change in fair value of derivatives, net of tax of $(46), $(28) and $61, respectively | | | | | | 155 | | | | | | 93 | | | | | | (204) | | |

| Comprehensive income | | | | | | $ | 2,734 | | | | | $ | 2,085 | | | | | $ | 1,580 | |

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| | | | | | | 2023 | | | | | | 2022 | | |

| Inventories | | | | | | 639 | | | | | | 432 | | |

| Other current assets | | | | | | 252 | | | | | | 172 | | |

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

*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.

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.

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

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

| Commodity sales | | | | | | $ | 20,975,462 | | | | | $ | 15,180,264 | | | | | $ | 7,255,259 | |

| Services | | | | | | 1,411,430 | | | | | | 1,360,045 | | | | | | 1,286,983 | | |

| Total revenues (Note Q) | | | | | | 22,386,892 | | | | | | 16,540,309 | | | | | | 8,542,242 | | |

| Impairment charges (Notes E and F) | | | | | | — | | | | | | — | | | | | | 607,200 | | |

| General taxes | | | | | | 191,458 | | | | | | 166,668 | | | | | | 125,028 | | |

| Interest expense (net of capitalized interest of $57,426, $25,150 and $75,436, respectively) | | | | | | (675,946) | | | | | | (732,924) | | | | | | (712,886) | | |

| Income before income taxes | | | | | | 2,249,645 | | | | | | 1,984,204 | | | | | | 802,316 | | |

| Income taxes (Note M) | | | | | | (527,424) | | | | | | (484,498) | | | | | | (189,507) | | |

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

| Basic | | | | | | 447,507 | | | | | | 446,403 | | | | | | 431,105 | | |

| Diluted | | | | | | 448,447 | | | | | | 447,403 | | | | | | 431,782 | | |

| | | | | | | (*Thousands of dollars*) | | | | | | | | | | | | | | |

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

| Change in fair value of derivatives, net of tax of $(27,914), $60,896 and $49,292, respectively | | | | | | 93,451 | | | | | | (203,868) | | | | | | (165,023) | | |

| Comprehensive income | | | | | | $ | 2,085,316 | | | | | $ | 1,579,804 | | | | | $ | 435,360 | |

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

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

| ONEOK, Inc. and Subsidiaries | | | | | | | | | | | | | | |

| CONSOLIDATED BALANCE SHEETS | | | | | | | | | | | | | | |

| NGLs and natural gas in storage | | | | | | 431,740 | | | | | | 427,880 | | |

| Other current assets | | | | | | 171,548 | | | | | | 165,689 | | |

| Total current assets | | | | | | 2,547,775 | | | | | | 2,374,374 | | |

| Goodwill and net intangible assets (Note F) | | | | | | 752,867 | | | | | | 763,295 | | |

| Total investments and other assets | | | | | | 1,878,793 | | | | | | 1,927,365 | | |

| (Continued) | | | | | | | | | | | | | | |

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

| Equity (Note H) | | | | | | | | | | | | | | |

| ONEOK shareholders’ equity: | | | | | | | | | | | | | | |

| Total equity | | | | | | 6,493,885 | | | | | | 6,015,163 | | |

Our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) have concluded that our disclosure controls and procedures [added: (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act)] were effective as of the end of the period covered by this [removed: report based on the evaluation of the controls and procedures required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act.][added: report.]

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in [removed: Exchange Act] Rule [removed: 13a-15(f).][added: 13a-15(f) and 15d-15(f) of the Exchange Act.]

Based on our evaluation under that framework, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2022.][added: 2023.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] 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: 2022,] [added: 2023,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Our evaluation of the effectiveness of internal control over financial reporting excludes the Magellan Acquisition.

Our Consolidated Statement of Income for the year ended December 31, 2023, includes approximately 6% of total revenue and our Consolidated Balance Sheet as of December 31, 2023, includes approximately 32% of total assets attributable to Magellan that was excluded from management’s assessment of the effectiveness of internal controls over financial reporting.

In accordance with guidance issued by the SEC, companies are allowed to exclude acquisitions from their assessment of internal control over financial reporting during the first year subsequent to the acquisition while integrating the acquired operations.

Information concerning our directors is set forth in our [removed: 2023] [added: 2024] 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: 2023] [added: 2024] 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: 2023] [added: 2024] definitive Proxy Statement and is incorporated herein by this reference.

Information concerning [removed: the Nominating Committee procedures] [added: our corporate governance] is set forth in our [removed: 2023] [added: 2024] definitive Proxy Statement and is incorporated herein by this reference.

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Corporate Governance

Nominating Committee Procedures

Audit Committee

Information concerning the Audit Committee is set forth in our 2023 definitive Proxy Statement and is incorporated herein by this reference.

Audit Committee Financial Experts

Information concerning the Audit Committee Financial Experts is set forth in our 2023 definitive Proxy Statement and is incorporated herein by this reference.

Information on executive compensation is set forth in our [removed: 2023] [added: 2024] definitive Proxy Statement and is incorporated herein by this reference.

Information concerning the ownership of certain beneficial owners is set forth in our [removed: 2023] [added: 2024] definitive Proxy Statement and is incorporated herein by this reference.

Information on security ownership of directors and officers is set forth in our [removed: 2023] [added: 2024] 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: 2022:][added: 2023:]

| [added: Plan Category] | | | | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | | | | | | | | | [removed: Weighted-Average Exercise] [added: Weighted-Average Exercise] Price [removed: of Outstanding Options, Warrants] [added: of Outstanding Options, Warrants] and [removed: Rights] [added: Rights (3)] | | | | | | | | | | | | Number of [removed: Securities Remaining] [added: Securities Remaining] Available [removed: For Future] [added: For Future] Issuance [removed: Under Equity Compensation Plans (Excluding Securities in Column (a))] [added: Under Equity Compensation Plans (4)] | | | | | |

| Equity compensation plans approved by security holders (1) | | | | | | [removed: 3,320,600] [added: 4,431,349] | | | | | | | | | | | | — | | | | | | | | | [removed: 5,111,244] [added: 5,743,377] | | | | | |

| Equity compensation plans not approved by security holders (2) | | | | | | [removed: 330,002] [added: 366,202] | | | | | | | | | $ | | | [removed: 65.70] [added: 70.22] | | | | | | | | | — | | | | | |

(1) - Includes shares granted under our Employee Stock Purchase Plan, Employee Stock Award Program and restricted stock incentive unit awards and performance unit awards granted under our former Long-Term Incentive Plan, our former Equity Compensation [removed: Plan and] [added: Plan,] our Equity Incentive [added: Plan and the assumed former Magellan Midstream Partners, L.P. Long-Term Incentive] Plan.

[removed: Column (c) includes 459,886,] [added: (4) - Includes 1,722,186,] 130,204 and [removed: 4,521,154] [added: 3,881,987] shares available for future issuance under our Employee Stock Purchase Plan, Employee Stock Award Program and Equity Incentive Plan, respectively.

The price used for these plans to calculate the weighted-average exercise price in the table is [removed: $65.70,] [added: $70.22,] which represents the [removed: 2022] [added: 2023] year-end closing price of our common stock on the NYSE.

| Total | | | | | | 4,797,551 | | | | | | | | | $ | | | 70.22 | | | | | | | | | 5,743,377 | | | | | |

| Plan Category | | | | | | (a) | | | | | | | | | (b) (3) | | | | | | | | | | | | (c) | | | | | |

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

Information on certain relationships and related transactions and director independence is set forth in our [removed: 2023] [added: 2024] definitive Proxy Statement and is incorporated herein by this reference.

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Information concerning the principal accountant’s fees and services is set forth in our [removed: 2023] [added: 2024] definitive Proxy Statement and is incorporated herein by this reference.

| | | | (a) | | | Report of Independent Registered Public Accounting Firm (PCAOB ID: 238) | | | [removed: 56-57] [added: 59-61] | | |

| | | | (b) | | | Consolidated Statements of Income for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: 58] [added: 62] | | |

| | | | (c) | | | Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: 59] [added: 63] | | |

| | | | (d) | | | Consolidated Balance Sheets as of December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] | | | [removed: 60-61] [added: 64] | | |

| | | | (e) | | | Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: 63] [added: 65] | | |

| | | | (f) | | | Consolidated Statements of Changes in Equity for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: 64-65] [added: 66-67] | | |

| | | | (g) | | | Notes to Consolidated Financial Statements | | | [removed: 66-101] [added: 68-104] | | |

| | | | [removed: 4] [added: 3.3] | | | [Certificate of Designation for Convertible Preferred Stock of WAI, Inc. (now ONEOK, Inc.) filed November 21, 2008 (incorporated by reference from Exhibit 3.1 to ONEOK, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed August 1, 2012 (File No. 1-13643)).](http://www.sec.gov/Archives/edgar/data/1039684/000103968412000084/exhibit_3-1.htm) | | |

| | | | [removed: 4.1] [added: 3.4] | | | [Certificate of Designation for Series C Participating Preferred Stock of ONEOK, Inc. filed November 21, 2008 (incorporated by reference from Exhibit No. 3.1 to ONEOK, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed August 1, 2012 (File No. 1-13643)).](http://www.sec.gov/Archives/edgar/data/1039684/000103968412000084/exhibit_3-1.htm) | | |

| | | | [removed: 4.2] [added: 4.1] | | | [Fifth Supplemental Indenture, dated as of June 30, 2017, by and among ONEOK, Inc., ONEOK Partners, L.P., ONEOK Partners Intermediate Limited Partnership and The Bank of New York Mellon Trust, as trustee (incorporated by reference from Exhibit 4.1 to ONEOK Inc.’s Current Report on Form 8-K filed July 3, 2017 (File No. 1-13643)).](http://www.sec.gov/Archives/edgar/data/1039684/000119312517220993/d418169dex41.htm) | | |

| | | | 4.7 | | | [removed: [Thirteenth] [added: [Fourteenth] Supplemental Indenture, dated March 20, 2015, among ONEOK Partners, L.P., ONEOK Partners Intermediate Limited Partnership and Wells Fargo Bank, N.A., as trustee, with respect to the [removed: 3.80%] [added: 4.90%] Senior Notes due [removed: 2020] [added: 2025] (incorporated by reference to Exhibit [removed: 4.2] [added: 4.3] to ONEOK Partners, L.P.’s Current Report on Form 8-K filed on March 20, 2015 (File No. [removed: 1-12202)).](http://www.sec.gov/Archives/edgar/data/909281/000119312515099861/d892858dex42.htm)] [added: 1-12202)).](http://www.sec.gov/Archives/edgar/data/909281/000119312515099861/d892858dex43.htm)] | | |

| | | | [removed: 4.8] [added: 4.16] | | | [removed: [Fourteenth] [added: [Eleventh] Supplemental Indenture, dated [removed: March 20, 2015,] [added: September 12, 2013,] among ONEOK Partners, L.P., ONEOK Partners Intermediate Limited Partnership and Wells Fargo Bank, N.A., as trustee, with respect to the [removed: 4.90%] [added: 5.000%] Senior Notes due [removed: 2025] [added: 2023] (incorporated by reference to Exhibit 4.3 to ONEOK Partners, L.P.’s Current Report on Form 8-K filed [removed: on March 20, 2015] [added: September 12, 2013] (File No. [removed: 1-12202)).](http://www.sec.gov/Archives/edgar/data/909281/000119312515099861/d892858dex43.htm)] [added: 1-12202)).](http://www.sec.gov/Archives/edgar/data/909281/000119312513365109/d596840dex43.htm)] | | |