NARRATIVE DESCRIPTION OF BUSINESS
We reportoperations in thefol f lowing four businesssegments:
•Natur t al GasGathering andProcessing;
•Natur t al Gas Liquids;
•Natur t al Gas Pipelines; and
•Refin f ed Products and Crude.
Natural Gas Gatheringand Processing g g
Overviewof Operations - Inour NaturalGas Gathering and Processing segment, rawnatur t al gas is typically gathered at the wellhead, compressed and transported throughpipelines to our processing facilities. Most rawnatur t al gas produced at the wellhead also contains amixture of NGL components, including ethane, propane, iso-butane, normalbutane and natural gasoline. Gathered wellhead naturalgas is directed to our processing plants to remove NGLsresulting inresidue d naturalgas (primarily methane) Residue d naturalgas is then recompressed and delivered to naturalgas pipelines,storage facilities andend users. The NGLsseparated fromthe rawnatur t al gas are delivered throughNGLpipelines to fractionationfaci f litiesfor f further processing Some of the heavier NGLsmay separate upstreamof processing andfra f ctionationand aresold ascondensate at NGL or crude r oilmarkets.Our NaturalGas Gathering and Processing segment provides these midstream services to producers in theregions listedbelow
Rocky Mountain region - The WillistonBasin is located in portions of NorthDakotaand Montanaand includes the oilproducing,NGL-rich BakkenShale and Three Forksfor f mations.We havemore than3milliondedicated acres in the Williston Basin.
ThePowder River Basin is primarily located in EasternWyoming, which includes the NGL-rich Niobrara, Frontier, Turner and Mowryf r formations.
Mid-Continent region - The Mid-Continentregion includes the naturalgas andoil-producingAnadarkoBasin, which includes the NGL-rich SCOOP and STACK areas,Cana-Woodfor f d Shale,Woodfor f d Shale, SpringerShale, Meramec, Granite Wash, Cherokee and Mississippian Lime formations of Oklahoma We have more than 600,000 dedicated acres in theAnadarko Basin, excluding EnLink As aresultofthe EnLink Acquisitions, we havemore thandoubled our presence in the MidContinentregionby expanding our existing presence inthe Cana-Woodfor f d Shale,Woodfor f d Shale and STACK area, while also beginning to operate in theArkoma-Woodfor f d Shale
PermianBasin region - The PermianBasin is a large,natur t al gas-rich sedimentaryb r asin composed of the Midland Basin, located in West Texas, and theDelawareBasin, located in WestTexas and Southeastern New Mexico. As aresultofthe EnLink Acquisitions, we have a meaningful f presence in the PermianBasin, providing gathering and processing services in the Midland and Delaware Basins.
NorthTexa T sregion - The North Texas region is located inthe BarnettShale, one of the largest onshorenatur t al gasfie f lds inthe United States. As aresultofthe EnLink Acquisitions, wenow provide gathering and processing services in theBarnett Shale.
Property - t OurNatur t al GasGathering and Processing segmentincludes the following assets,which arewholly owned, except wherenoted,and exclude EnLink, which isshownseparatelybelow:
• 13,500 miles of naturalgas gathering pipelines; and
• Natur t al gas processing plants with 1.9 Bcf/dof processing capa a city in the Rocky Mountainregionand 1.0 Bcf/d inthe Mid-Continentregion, whichwere 84% and77% utilized in 2024 and2023,respectively. In addition, we have up to 150MMcf/dofprocessissing capacity in theMid-Continentregionthrough along-term processing services agreement with an unaffiliated thirdparty.
We calculateutilizationrates using a weighted-average approach, adjustingfor f thedates thatassets were placed in or removed fromservice
Thefol f lowing are the NaturalGas Gathering and Processing segmentassets added as a result of the EnLinkAcquisitions:
•9,000 milesofnatur t al gasgathering pipelines(includesgross mileageofa consolidated, partially ownedsubsidiary); and
•Natur t al gas processing plants with1.4 Bcf/dof processing capa a city in the Mid-Continentregion, 1.7 Bcf/dof processing capa a city in the PermianBasin region (includesgross operating capa a city of a consolidated, partiallyowned subs u idiary),0 8 Bcf/dof processing capacity in the NorthTexasregion.
Sources of Earnings - Earnings forthissegment arederived primarily from thefol f lowing typesofservice contracts:
•Fee withPOP contractswithno producer take-in-kind rights - We purchaseraw naturalgas andchargecontractua t lfee f s for providing midstream services, which include gathering, treating, compressing andprocessing theproducers’ naturalgas.After performing these services, wesellthe commodities and remit aportionofthe commodity sales proceeds to theproducers lessour contractua t lfee f s. This type of contract represented 76% and 72% of suppl u y volumes in this segment, excluding EnLink, for2024 and2023, respectively
•Fee withPOP contractswith producer take-in-kind rights - We purchase aportionofthe rawnatur t al gasstream, charge fees for providing themidstream services listedabove a ,retur t ncertain commodities to theproducer,sellthe remaining commodities and remit aportionofthe commodity sales proceeds to the producer less our contractua t lfee f s. This type of contract represented 19% of suppl u y volumes in this segment, excluding EnLink, forboth2024 and2023 EnLink’sservice contracts are primarilyfee f withPOP contractswithproducer take-in-kind rights tocertain commodities
•Fee-only- Underthis type of contract, wechargeafee f forthe midstream services we provide basedonvolumes gathered, processed, treated and/or compressed.Our fee-onlycontractsrepresented 5% and 9% ofsupply volumes in this segment, excluding EnLink, for2024 and2023, respectively
Forcommodity sales, we contract to deliver residuenatur t al gas, condensate and/or unfra f ctionated NGLs todownstream customers ata specified delivery point.Our salesofNGLs are primarily to our affi f liate in the Natur t al Gas Liquids segment.
Unconsolidated Affi f liates -Our unconsolidated affi f liates in this segmentare not material
See Note O of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f additionaldiscussion of our unconsolidated affi f liates.
Government Regulation - The FERC traditionally hasmaintained thata naturalgas processing plant isnot afaci f lityfor f the transportationorsaleofnatur t al gas in interstatecommerce and, therefor f e, is not subj u ect to jurisdictionunderthe NaturalGas Act. Although theFERC has made no specificdeclarationas to the jurisdictionalstatusofour naturalgas processing operations or facilities, our naturalgas processing plants areprimarily involved inextracting NGLs and, therefor f e, areexempt fromFERC jurisdiction. The Natur t al GasAct also exemptsnatur t al gasgathering facilitiesfro f mthe jurisdictionofthe FERC. We believe our naturalgas gatheringfaci f lities, upstream of our naturalgas processing plants,meet thecriteria usedbythe FERC fornon-jurisdictionalnatur t al gasgathering facility status t Interstate transmission facilitiesremainsubject to FERC jurisdiction. TheFERC has historically distinguished between these two typesoffaci f lities, either interstate or intrastate, ona fact-specificbasis.We transportresidue d naturalgas fromcertain of our naturalgas processing plants to interstate pipelines in accordance with Section311(a) of the Natur t al GasPolicy Act of 1978, as amended. Thestateswhere we operate have statut t es regulating, to varying degrees, the gathering ofnatur t al gas inthosestates. In each state, regulation isappl a iedona case-by-case basis ifa complaint isfile f d against the gathererwiththe appropriate stateregulatorya r gency.
Seefur f ther discussion in the “Regulatory, r Environmentaland Safety Matters”section.
Natural Gas Liquids q
Overviewof Operations - Inour NaturalGas Liquids segment, NGLsextracted at our ownand third-party natur t al gas processing plants are gatheredbyour NGL gathering pipelines.Gathered NGLs are directed to our downstream fractionators to be separated into PurityNGLs. Purity NGLs are stored or distributed to our customers, suchas petrochemical companies, propane distributors, diluentusers,ethanolproducers, refineries andexporters
We provide midstream services to producersofNGLs inthe RockyM k ountainregion, Mid-Continentregion, PermianBasin and Gulf Coastregion(including Louisiana) anddeliver thoseproducts to themarket. Our primary markets include the MidContinent inConway, Kansas, the GulfCoast in Mont Belvieu, Texas, Louisianaand theuppe u r Midwest The majo a rity of the pipeline-connected naturalgas processing plants in the WillistonBasin,Oklahoma, Kansas and the Texas Panhandle aswellas a large number inthe PermianBasin,Barnett Shale, EastTexas and Louisianaregions areconnected to our NGL gathering
systems. Through our NGL gathering and distribution pipelines, and fractionation, terminal andstorage facilities, we provvide needed midstream services while connecting key suppl u yand demand areas.
Property t -Our r NaturalGas Liquids segment includes the following assets, which arewholly owned, exceptwhere noted a , nd exclude EnLinkk, which isshownseparatelybelow:
• 9,300 milesofgathering pipelines;
• 4,800 milesof distributionpipelines;
• NGL fractionators with combined operating capacity of 960 MBbl/d (includes interests in our proportionalshare of operating capacity), including 310 MBbl/d in theMid-Continentregionand 650 MBbl/d in theMont Belvieu, e Texas area, whichwere 92% and98% utilized in 2024 and2023, respectively;
• one issomerizationunitwithoperating capacityof 10 MBbl/d;
• one etthane/propane splittetterwith ith ope operatintingcapacityof40MBbl/dl/d;
• NGL storage facilitieswithoperating storagecapacity of 30 MMBbl; and
• eightPurity NGLs terminals
We completed the construc r tionofour 125 MBbl/d MB-6 fractionator, which is included inthe assets listedabove a .We are in theprocessofreconstruc r ting our 210 MBbl/d fractionator in Medford,Oklahoma, which isexcludedfro f mthe assets listed above.
In addition, we have access to 6 MMBbl of combined NGL storagecapacity at facilities in Kansas and Texas and 60 MBbl/d of NGL fractionation capa a city in the GulfCoast through service agreements
Thefol f lowing are the NaturalGas Liquids segmentassets added as a result of the EnLinkAcquisitions:
• 800 milesofgathering pipelines(includesgross mileageofa consolidated, partially ownedsubsidiary);
• NGL fractionators with combined operating capacity of 235 MBbl/d; and
• NGL storage facilitywithoperatingstorage capacity of approximately 10 MMBbl
See “RecentDevelopments” in Part II, Item 7, Management’s Discussion andAnalysisofFinancial Conditionand Resultsof Operations, inthisAnnual Reportfor f more informationonour capital proje o cts.
Sources of Earnings - Earnings forour NaturalGas Liquids segmentare derivedprimarily fromfee f -based services and commodity sales and purchases.Wepurchase NGLs and condensatefro f mthird parties, as wellas fromour NaturalGas Gathering and Processing segment. We also sell NGLs toour affi f liate in the Refin f ed Products and Crude segment. Our business activities are categorized as follows:
• Exchangeservices - We utilize our assets to gather, transport, treat andfra f ctionate NGLs, converting them into marketable Purity NGLs, anddeliver them to amarketcenterorcustomer-designated location. Some of these exchange volumes areundercontractswithminimumvolumecommitments that provide aminimum level of revenues regardless of volumetric throughput.Our exchange services activities are primarily fee-based and include some rateregulated tariffs; however, we alsocapture certain product price differentials through thefra f ctionation process.
• Transportationand storageservices -We transportPurityNGLs and certain RefinedProducts, primarily under regulated tariffs.Tariffs f specifyt f he maximumrates we maychargeour customers and the general terms and conditions fortransportationservice on our pipelines. Ourstorage activitiesconsist primarily of fee-based NGL storageservices atour Mid-Continentand Gulf Coaststorage facilities.
•Optimizationand marketing - We utilizeour assets, contractportfol f io andmarket knowledge to capture location, product andseasonal price differentials through thepurchase and sale of unfra f ctionated NGLs and Purity NGLs.We transport Purity NGLsbetween the Mid-Continentregion, upper Midwest and GulfCoast regions to capture the location price differentials between market centers.Our marketing activities also include utilizing our NGL storage facilities tocapture seasonal price differentials andserving marine, truck andrailmarkets.Our isomerizationactivities capture theprice differentialwhennormalbutane isconverted into themorevaluabl a e iso-butane atour isomerization unit inConway, Kansas.
In themajority of our exchange services contracts, we purchase the unfra f ctionated NGLs atthe tailgateofthe processing plant anddeduc d tcontractua t lfee f srelated to the transportationand fractionationservices we mustperform before we can sell them as Purity NGLs. To theextentwe holdunfra f ctionated NGLs in inventory, r therelated contractua t lfees f arenot recognizeduntil the unfractionated inventoryi r sfra f ctionated and sold
Unconsolidated Affi f liates -We have a 50% ownershipinterest inOverland Pass, whichoperates an interstate NGLpipeline system extending 760 miles, originating inWyoming and Colorado and terminating in Kansas. Ourother unconsolidated affi f liates inthissegment arenot material
See Note O of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f additionaldiscussion of unconsolidated affi f liates.
Government Regulation - The operations andrevenuesofour NGLpipelines are regulated by various state and federal government agencies.Our interstate NGLpipelines areregulated underthe Interstate CommerceAct, which gives the FERC jurisdictiontoregulate the terms and conditions of service, rates, including depreciationand amortization policies, and initiation of service. Certainaspects of our intrastate NGLpipelines that provide commoncarrier service are subj u ect to thejurisdictionof various state agencies inthe states whereweoperate.
Seefur f ther discussion in the “Regulatory, r Environmentaland Safety Matters”section.
Natural Gas Pipelines
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Overviewof Operations - Inour NaturalGas Pipelines segment, we receive residue naturalgas fromthird parties and our own naturalgas processing plants and interconnecting pipelines Residue d naturalgas is transportedorstoredfor f endusers, suchas large industrialcustomers,natur t al gas and electricutilities serving commercialand residentialconsumers and can ultimately reach internationalmarkets through liquified naturalgas exports andcross border pipelines
Ourassets areconnected to key supplyareas anddemandcenters, including exportmarkets in Mexico via Roadrunne r rand suppl u yareas in Canada and the United Statesvia our interstate and intrastatenatur t al gas pipelines and NorthernBorder, which enablesus to provide essentialnatur t al gas transportation andstorage services.Growing demand fromdata centers and continueddemandfro f m local distributioncompanies,electric-generationfaci f lities and large industrialcompanies suppor u t lowcost expansions thatpositionuswellto provide additionalservices to our customerswhenneeded
Intrastate Pipe i lines and Storage -Our intrastate naturalgas pipeline andstorage assets are located in Oklahoma, Texas and Kansas.Our Oklahoma intrastatepipeline and storage assets have access tomajor naturalgas production areas in the MidContinentregion. Our Texas intrastate pipeline and storage assets have access to majo a rnatur t al gas producingfor f mations in the Texas Panhandle. These assets provide shippers access to westernmarkets,several markets to the southeastalong the Gulf Coast, including the HoustonShip Channel, the Mid-Continentmarketto the north andexports to Mexico.Our storage facilities provide 61 Bcfofworking gasstorage capacity Additionally,as aresultofthe EnLink Acquisitions, we also have intrastate pipeline and storage assets in Louisianaand North Texas.Our intrastate pipeline andstorage companies primarily include:
•ONEOK Gas Transportation, whichtransports naturalgas throughout thestate of Oklahomaand has access to the majo a rnatur t al gas production areas in the Mid-Continentregion, which include the SCOOP and STACK areas and the Cana-Woodfor f d Shale,Woodfor f d Shale, SpringerShale, Meramec, Granite Washand Mississippian Lime formations. ONEOK Gas Transportation is connected to our ONEOK GasStorage facilities inOklahoma, which provide 50 Bcfof workinggas storagecapacity;
•ONEOK WesTex Transmission, whichtransports naturalgas throughout thewestern portionofthe stateof Texas, including the Waha Hub area whereother pipelinesmay be accessedfor f transportationtowestern markets, exports to Mexico,several markets to the southeastalong the GulfCoast, including the HoustonShip Channeland the MidContinentmarketto the north. It has access tomajor naturalgas producingfor f mations in the Texas Panhandle, including the Granite Washfor f mationand Delaware and Midland Basins in thePermianBasin.ONEOK WesTex Transmission is connected to our ONEOKTexasGas Storagefac f ilities, which provide 8Bcf of workinggas storage capacity;
•Bridgeline Pipeline, acquiredwiththe EnLink Acquisitions, whichprovides transportationand storageservices to a varietyofcustomers including South Louisiana industrialcompanies, power companies, utilities and Gulf Coast LNG facilities;
• Louisiana Intrastate Gas (LIG) Pipeline, acquiredwiththe EnLink Acquisitions, which is anatur t al gas pipelinesystem providing aful f ly integrated wellhead to burnertip valuechain that includes local gathering,processing, transmissions and treatingservices to Louisianaproducers. The LIG Pipeline has access to the Haynesville shaleproducing areaand connects toseveral othernatur t al gas pipelines, providing additionalsystemsupply, and to the Jefferson Island storage facility; and
•AcaciaPipeline, acquiredwiththe EnLink Acquisitions, whichprovides transportationservices toconnectproduction fromthe BarnettShale to markets inNorthTexas.
Interstate Natural Gas PipelineDivestiture -OnNov. 19, 2024, we entered into a definitive agreementwithDTMidstream, Inc. to sell threeofour wholly owned interstatenatur t al gas pipelinesystems, including Guardian and Viking, located in the Upper Midwest, and Midwestern Gas Transmission Company, located between Tennessee and the Chicago Hub near Joliet, Illinois. On Dec. 31, 2024, we completed the sale of these assets
InterstatePipelines - Sabi a ne Pipelinewas acquiredwiththe EnLink Acquisitions and is an interstatenatur t al gas pipeline that transports naturalgas between Port Arthur, Texas, and the Henry Hublocated in Erath, Louisiana. The Sabine Pipeline also owns andoperates the HenryH r ub, theofficial delivery mechanismand pricing point forChicago Mercantile Exchange’s NYMEX naturalgas futures.
Propertyt OurNNatur t al Gas Pipelines segment includes the following wholly ownedassets andexclude EnLink, which i s sshown separately beloww:
•5,200 milesofnatur t al gas pipelines, which were 97% and 96% subs u cribed in 2024 and2023, respectively; and
•seven underground naturalgas storagefaci f lities with 61 Bcfoftotal activeworking naturalgas storagecapacity which were 75% and76% subs u cribed in 2024 and2023, respectively
Ourstorage includes two underground naturalgas storagefaci f lities inOklahoma, twounderground naturalgas storagefaci f lities in Kansas and three underground naturalgas storagefaci f lities in Texas.
Thefol f lowing are the NaturalGas Pipelinesegment assets added as a result of the EnLinkAcquisitions:
•3,200 milesofnatur t al gas pipelines; and
•four f underground naturalgas storagefac f ilitieswithappr a oximately 13 Bcfoftotalactiveworking naturalgas storage capa a city
Sources of Earnings - Earnings forour NaturalGas Pipelines segmentare derivedprimarily fromfeef basedservices andour business activities are categorized as follows:
• Transportationservices - Ourregulated naturalgas transportation services contracts are basedupon u ratesstated inthe respective tariffs f , which have generally been establ a ished through shipperspecificnegotiation, discounts and negotiated settlements. Therates arefile f dwithFERC orthe appropriate statejurisdictionalagencies. In addition, customers typically are assessedfee f s, suchas a commodity charge, and we may retaina percentage of naturalgas in-kind forour compression services.Our transportationearnings areprimarily fee-based and utilize thefol f lowing typesofcontracts:
◦ Firm service - Customersreserve afix f ed quantity of pipeline capacity fora specified period of time, which obligates the customer to pay regardlessofusage.Underthis type of contract, the customer pays amonthly fixedfee f and incremental fees, knownascommodity charges, whichare basedonthe actua t lvolumes of
naturalgas they transportorstore.Underthe firm servicecontract, the customer generally is guaranteed access to thecapacitythey reserve
◦ Interruptible service - Under interrupt u ible service transportation agreements, the customer mayutilize availabl a ecapacity afte f rfir f mservice requests are satisfie f d. Thecustomer isnot guaranteed useofour pipelines unlessexcesscapacityis available
•Storage services -Our storageearnings areprimarily fee-based and utilize the following typesofcontracts:
◦ Firm service - Customersreserve a specificquantity of storagecapacity, including inje n ctionand withdrawal rights, and generally payfix f ed fees basedonthe quantity of capacity reserved plus an inje n ctionand withdrawal feebased on actua t lusage.Our firm storagecontracts typically have terms longerthanone year
◦ Park-and-loan service - An interruptible storageservice offe f red tocustomers providing theabi a lityto park (inject) or loan (withdraw)natur t al gas intoorout of our storage, typically formonthlyorseasonalterms Customersreserve theright to park or loan naturalgas basedona specified quantity, including inje n ctionand withdrawal rightswhencapacity is availabl a e.
•Optimizationand marketing - As aresultofthe EnLink Acquisitions, we alsoderiveearnings from providing natural gasmarketing and optimization forour customers.
Unconsolidated Affi f liates -Our NaturalGas Pipelines segment includes the following unconsolidated affi f liates:
•50% ownershipinterest inNorthernBorder, whichowns aFERC-regulated interstate pipeline thattransports natural gasfro f mthe Montana-Saskatchewan bordernear Port of Morgan, Montana, and the WillistonBasin in NorthDakota to a terminus near North Hayden, Indiana
•50% ownershipinterest in Roadrunne r r, a bidirectional pipeline, which has thecapacity to transport570 MMcf/d f of naturalgas fromthe PermianBasin in WestTexas to the Mexican bordernear ElPaso,Texas, and hascapacity to transportappr a oximately 1.0 Bcf/dofnatur t al gasfro f mthe Delaware Basinto the Waha Hub area We are the operator of Roadrunner.
•As a result of the EnLinkAcquisitions,15% ownershipinterest in Matterhorn, a bidirectional pipeline, which has capacity to transport2.5 Bcf/dofnatur t al gasfro f mthe Waha Hub to Katy,Texas
See Note O of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f additionaldiscussion of unconsolidated affi f liates.
Government Regulation - Interstate -Our interstate naturalgas pipelines are regulated underthe NaturalGas Act, whichgives theFERC jurisdictiontoregulatevirtually allaspectsofthisbusiness, suchas transportationofnatur t al gas, rates and charges forservices, construc r tionofnew facilities, depreciationand amortization policies, acquisitionand dispositionoffaci f lities and the initiationand discontinuationofservices.
Intrastate -Our intrastate naturalgas pipelines inOklahoma, Kansas, Louisiana and Texas aresubject to rate regulationby state regulators and by theFERC underthe NaturalGas Policy Act of 1978, as amended, forcertain services wherewedeliver naturalgas into FERC-regulated naturalgas pipelines.While we have flexibility in establ a ishing naturalgas transportation rates with customers, there is a maximumrate thatwecan charge our customers inOklahomaand Kansas andfor f theservices regulated by theFERC. In Texas and Kansas,natur t al gasstorage may beregulated by thestate andbythe FERC for certain typesofservices InOklahoma, naturalgas storageoperations arenot subj u ect to rate regulationbythe state, andwe have market-based rate authorityfro f mthe FERC forcertain typesofintrastateservices.
Seefur f ther discussion in the “Regulatory, r Environmentaland Safety Matters”section.
Refined Products and Crude
Overviewof Operations -Our Refined Products and Crude segment is principally engaged inthe transportation, storage and distributionof Refin f ed Products andcrude oil. As aresultofthe EnLink Acquisitions and the MedallionAcquisition, we are also engaged inthe gathering ofcrude oil. Crude r oil pipelines gather and transportcrude oiltorefin f eries, exportfaci f lities and demand centers Throughout our distributionsystem, terminals playa key role infaci f litating productmovements and marketingbyproviding storage, distribution, blending andother ancillary services. Products transportedonour Refined Products pipelinesystem include gasoline, distillates, aviation fuel andcertain NGLs. Shipmentsoriginate on our Refined Products pipelinesystemfro f mdirect connections to refineries or through interconnections with other pipelines or terminalsfor f transportationand ultimate distributiontoretailfue f ling stations, convenience stores, travelcenters,railroads, airpor r ts andother endusers.
Our Refin f ed Products pipelinesystem isone of the longest common carrier pipelinesystems for Refin f ed Products in the United States,extending fromthe TexasGulfCoast andcovering a 15-state areaacross the central andwestern United States. Our crude r oilassets arestrategically located to transportand storecrude oiland areconnected to multiple trading anddemand centers.We haveexisting crude oil pipelines in Kansas and Oklahoma, andfro f mthe PermianBasin in West Texas to our East Houstonterminal.Our Houstondistributionsystemconnectsour EastHoustonterminal through severalinterchanges tovarious points, including multiple refineries throughout the Houstonareaand crude r oil importand exportfaci f lities. OurCushing terminalprimarily receives anddistributes crude r oilvia themultiplepipelines that terminate inand originatefro f mthe Cushing hub. OurCorpus r Christiterminal provides terminallingservices and includesour splitter.
As aresultoofthe EnLink Acquisitions and the MedallionAcquisition, we acquiredcrude oilgathering pipelines and n crude r oil storagefaci f lities inthe PermianBasin and the Mid-Continentregion.
Propertyt O Our Refin f ed Products andCrude segmentincludes the following wholly owned assets, which exclude En E Link and Medallion, whichare shownseparately below:
•9,8000 milesof Refin f ed Products pipelines;
• 1,1000 milesofcrude oil pipelines;
•53RRefin f ed Products terminals;
•two o marine terminals; and
•97 MMBbl of operating storagecapacity.
Thefol f lowing are the Refined Products and Crude segmentassets added as a result of the EnLinkAcquisitions and the Medallion Acquisition:
•2,100 milesofcrude oilgathering pipelines; and
•2 MMBbl of operatingstorage capacity
We are inthe processofconstruc r ting our greater Denverareapipelineexpansion proje o ct The project includesconstruc r tion of a new230-mile, 16-inch diameter pipelinefro f mScott City, Kansas, to Denver InternationalAirpor r tand the addition or upgrading of certain pumpstations andwill increase total system capacity by 35 MBbl/d and have additionalexpansioncapabilities. This project is excludedfro f mthe assets listedabove a .
See “RecentDevelopments” in Part II, Item 7, Management’s Discussion andAnalysisofFinancial Conditionand Resultsof Operations, inthisAnnual Reportfor f more informationonour capital proje o cts.
Sources of Earnings - Earnings in this segmentare derivedprimarily from transportation, storage and terminal services and produc d tsales:
• Transportationservices - We generate revenue from tariffs on volumes gathered and transportedonour Refined Products andcrude oil pipelinesystems These transportationtariffs f vary depending upon where the product originates andwhere ultimate deliveryo r ccurs. Transportation fees are in published tariffs f filedwith theFERC orthe appropriate state agencyorestablishedby negotiatedrates
•Storage and terminalservices -We generate additionalrevenue from providing pipelinecapacity and tankstorage services, aswellas providing services suchas terminalling, ethanol andbiodiesel unloading and loading, and additive inje n ction, whichare performed undershort-term and long-term agreements.
•Optimizationand marketing - At times, we obtain Refin f ed Produc d ts andcrude oiland utilizeour assets, contract portfol f io andmarket knowledge to capture location, productand seasonal price differentials through liquids blending andpurchases andsales of produc d t, including transmix, which is amixture that formswhendiffe f rent RefinedProducts are transported in pipelines.
Unconsolidated Affi f liates -Our Refined Products and Crude segment includes the following unconsolidated affi f liates:
•a 30% ownershipinterest inBridgeTex, whichowns anappr a oximately 400-mile crude r oil pipelinewith transport capacity of up to 440 MBbl/d that connects Permian Basincrude oiltoour EastHoustonterminal;
•a 40% ownershipinterest inSaddlehorn, whichowns anundividedjoint interest in an approximately 600-mile pipeline, with transportcapacity of up to 290 MBbl/d of crud r eoil fromthe Denver-JulesburgBasin and Rocky Mountainregiontostorage facilities inCushing, including our Cushing terminal; and
•a 25% ownershipin MVP, which owns a Refin f ed Produc d ts marine storage terminal along the HoustonShip Channel in Pasadena, Texas, including more than 5 MMBbl of storage, twoshipdocks and truck loadingfaci f lities.
Ourother unconsolidated affi f liates in this segmentare not material.
See Note O of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f additionaldiscussion of unconsolidated affi f liates.
Government Regulation -Our interstate commoncarrier pipelines are subj u ect to rate regulationbythe FERC underthe Interstate CommerceAct, the Energy Policy Act of 1992 andrelated rules and orders. Mostofthe tariff ratesonour long-haul pipelines areestablishedundermarket-basedrate authority or vianegotiatedrates that generally allowfor f annual infla f tionbased adjustments. Some shipmentsonour pipeline systems are considered to be in intrastate commerce and aresubject to certainregulations with respecttosuch intrastate transportationby state regulatorya r uthorities inColorado, Kansas, Minnesota, Oklahoma, TexasorWyoming. In future rate or rulemaking proceedings, the FERC or stateregulatorya r uthoritiescouldreduc d e rates prospectively, limitour ability to increasefut f turerates or modify theway rates are currently establ a ished. In certain circumstances, a change could alsorequire thepayment of refunds to shippers.
Seefur f ther discussion in the “Regulatory, r Environmentaland Safety Matters”section.
Market Conditions andSeasonality
Supplyand Demand -Supply foreachofour segments depends on crude r oiland naturalgas drilling and productionactivities, whichare driven by thestrengthofthe economyand impactsofgeopolitical events; crude oil, naturalgas, NGL and Refin f ed
Products prices; the demand foreach of theseproducts from endusers; changes ingas-to-oilratios and thedeclinerateof existing production; refinery maintenancecycles; producer access to capitaland investment in the industry; r connections to pipelines andrefin f eries; andproducer firm commitments to transportation pipelines
Demand forgathering andprocessing services is dependent on naturalgas andcrude oil productionbyproducers inthe regions in whichweoperate.Demandfor f NGLs and theabi a lityofnatur t al gas processors to sustaintheir operations successful f ly and economically affe f ct thevolumeofunfra f ctionated NGLs produced by naturalgas processing plants, thereby affe f cting the demand forNGL gathering, transportationand fractionation services Natur t al gas and Purity NGLs are affe f cted by thedemand associated with thevarious industries thatutilize the commodities, suchas butanes andnatur t al gasolineusedbythe refining industrya r sblending stocks formotor fuel, denatur t antfor f ethanoland diluents forcrude oil. Ethane, propane,butanes and naturalgasoline are also used by thepetrochemical industryt r o producechemical components, used fora range of products that improveour daily lives andpromote economic growth, including health careproducts,recyclable food packaging, clothing, technology, buildingmaterials, industrial, manufact f turing and energy infrastructur t e, lightweight vehiclecomponents and batteries Propane is also used to heat homes andbusinesses. Demand for Refin f ed Products is influenced by many factors, including driving patterns, consumer prefer f ences,economic conditions, populationchanges, government regulations, changes in vehiclefue f leffic f iencyand thedevelopmentofalternativeenergy sources The demand for Refin f ed Products in themarket areas served by our pipeline system has historically been stable.Demandfor f shipmentsonour crud r eoilpipelines is driven primarily by crude r oil productionand takeaway demand in theregions in whichweoperate.Demandfor f naturalgas, NGLs, Refined Products andcrude oil is also impacted by globalmacroeconomic factors.
Commodity Prices -Our earnings areprimarily fee-based inall of our segments; however, we are exposed to some commodity pricerisk. As part of our hedging strategy, we usecommodity derivativefin f ancial instruments and physical-forwardcontracts to reduce the impactof price fluctuations related tonatur t al gas, NGLs, Refined Products andcrude oil. OurNatur t al Gas Gathering and Processing segment isexposed to commodity priceriskas a result of retaining aportionofthe commodity sales proceeds associated with our feewithPOP contracts and our POP contractswith take-in-kind rights. OurNatur t al Gas Gathering and Processing segmentfol f lows aprogrammatic approach to hedging commodity priceriskand expects to hedge approximately 75% of itsmonthly equity volumes overtime.Undercertain feewithPOP contracts, our contractua t lfee f s and POPpercentage mayincreaseordecrease if productionvolumes, deliveryp r ressuresorcommodity prices change relative to specified thresholds. Inour NaturalGas Liquids segment, we areexposed to commodity priceriskassociated with changes in theprice of NGLs; the locationdiffe f rentialbetween the Conway, Kansas, upper Midwest region, Mont Belvieu, Texas, and Louisiana; and the relativeprice differentialbetween naturalgas, NGLs and individual Purity NGLs, whichaffect our NGL purchases andsales, our exchange services, transportation andstorage services, and optimizationand marketingfin f ancial results. NGL storagerevenue may be affected by pricevolatilityand forwardpricing of NGLphysical contractsversus the current priceofNGLsonthe spot market.We are also exposed to changes inthe priceof power, which can impact our fractionationand transportationcosts. Inour NaturalGas Pipelinessegment, we are exposed to minimalcommodity pricerisk associated with (i) changes inthe priceofnatur t al gas, which impact our fuel costs and retained fuel in-kindreceivedfor f our compression services; and (ii) thediffe f rentialbetween forwardpricing of naturalgas physical contracts and theprice of natural gasonthe spot market, which mayaffect customer demand forour naturalgas storageservices Inour Refined Products and Crude r segment, we areexposed to some commodity pricerisk, including product price and locationdiffe f rentials primarily from our optimizationand marketing activities, as wellas productretaineddur d ing the operations of our pipelines and terminals. See additional discussion regarding our commodity priceriskand related hedging activitiesunder “Commodity Price Risk” in Part II, Item 7A,Quantitative and QualitativeDisclosures aboutMarketRisk, inthisAnnual Report.
Seasonality -Cold temperaturesusually increasedemandfor f naturalgas andcertain Purity NGLs, suchas propane, a heating fuel for homes andbusinesses. Warmtemperaturesusually increasedemandfor f naturalgas used in gas-firedelectric generation forresidentialand commercialcooling,as wellas agricultur t e-relatedequipment like irrigation pumps andcropdryers. Demand forbutanes andnatur t al gasoline, which areusedbythe refining industrya r sblending stocks formotor fuel, denatur t antfor f ethanol anddiluents forcrude oil, are alsosubject to some variability duringseasonal periods when certain government restrictions on motorfue f lblending products change.Additionally, our liquids blending activities are limitedby seasonal changes ingasolinevapor pressure specifications andbythe varyingquantity of the gasolinedelivered to us.During periods of peak demand fora certaincommodity, prices forthat producttypically increase.
Extremeweatherconditions,seasonaltemperature changes and the impact of temperatur t e and humidity on themechanical abilitiesofequipment impact thevolumes of naturalgas gathered andprocessed, NGL volumes gathered, transported and fractionated, and Refin f ed Products andcrude oilvolumes transported and stored. Power interruptions and inaccessiblewell sites as a result of severe storms or freeze-offs f , aphenomenon wherewater vapor a fromthe well borefre f ezes at thewellheador within thenatur t al gasgathering system,may cause a temporaryi r nterrupt u ion inthe flow of naturalgas, NGLs, Refined Produc d ts andcrude oil.
In our NaturalGas Pipelinessegment,natur t al gasstorage is necessary to balance the relatively steady natur t al gassupplywith theseasonaldemand of our localnatur t al gasdistributionand electric-generationcustomers as aresultofthe demand from their residentialand commercial customers.
Competition -Wecompete fornatur t al gas, NGL, Refined Products andcrude oilvolumes with othermidstream companies, majo a r integratedoil companies and independent explorationand productioncompanies that have gathering and processing assets,fra f ctionators, pipelines, terminals and storagefac f ilities. Thefact f ors thattypically affe f ct our ability to competefor f naturalgas, NGL, Refin f ed Products and crude r oilvolumes are:
•qualityand quantity of services provided;
• producer drilling activity;
• proceedsremitted and/or fees chargedunderour contracts;
• proximity of our assets to naturalgas, NGL, Refin f ed Produc d ts andcrude oilsupplyareas andmarkets;
• proximity of our assets to alternativeenergyproduction;
• locationofour assets relative to thoseofour competitors;
•efficiency andreliabi a lity of our operations;
•receipt anddeliveryc r apabilities fornatur t al gas, NGLs, Refined Products andcrude oilthatexist in eachpipeline system, plant,fra f ctionator, terminal andstorage location;
•the petrochemical industry’ r s level of capacity utilizationand feedstockrequirements;
•current andfor f ward naturalgas, NGLs, Refined Products andcrude oil prices; and
•costofand access to capi a tal.
We have remained competitiveby executing strategic acquisitions;making capital investments to access and connect new suppl u ieswithend-user demand; increasinggathering,processing, fractionationand pipelinecapacity; increasingstorage, withdrawal and injection capa a abilities; and improving operating effi f ciency.Our andour competitors’infra f structur t eproje o ctsmay affe f ct commodity prices andcoulddisplace suppl u y volumes from the Mid-Continentand RockyM k ountainregions and the PermianBasin whereour assets are located.Webelieve our assets are located strategically, connecting diverse suppl u yareas to market anddemandcenters.
Customers -Our NaturalGas Gathering and Processing, NaturalGas Liquids and Refin f ed Products and Crude segments derive fees forservices frommajor and independent crude r oiland naturalgas producers. OurNatur t al Gas Liquids segment’s customers also include otherNGL andnatur t al gasgathering andprocessing companies. Ourdownstream commodity sales customers are primarily petrochemical,refin f ing and marketing companies, utilities, large industrialcompanies,natur t al gasoline distributors, propane distributors, exporters andmunicipalities. Our Refin f ed Products and Crude segment’scustomers also include crude r oil producers, refiners, wholesalers, retailers, traders,railroads, airlines andregionalfar f mcooperatives End marketsfor f Refined Products deliveries are primarily retail gasolinestations, truck stops,far f mcooperatives,railroadfue f ling depots, militaryb r ases andcommercialairpor r ts.Our NaturalGas Pipelinesegment’s assets primarily serve local distribution companies, electric-generationfaci f lities, large industrialcompanies,municipalities, producers, processors andmarketing companies. Ourutility customersgenerally require our services regardless of commodity prices.See discussion regarding our customer credit risk under “Counterpa r rty Credit Risk” in Part II, Item 7A,Quantitative and QualitativeDisclosures about MarketRisk, inthisAnnual Report.
Other
Through ONEOKLeasingCompany,L L C. and ONEOKParkingCompany,L L C., weown a 17-storyo r ffice building (ONEOKPlaza) and aparkinggarage indowntown Tulsa,Oklahoma, whereour headquarters are located.ONEOKLeasing Company,L L C. primarilyoperatesour headquartersoffic f ebuilding. ONEOKParkingCompany,L L C. owns andoperates a parkinggarage adjacent to our headquarters. We have a wholly ownedcaptive insurance company, whichwas formed in 2022.
REGULATORY, ENVIRONMENTALAND SAFETYMATTERS
We aresubject to a variety of historicalpreservationand environmentaland safety laws and/or regulations that affe f ct many aspectsofour presentand future operations Regulated activities include,but arenot limited to, those involving airemissions, stormwater andwastewaterdischarges, handling and disposal of solid and hazardous waste, wetland andwaterway preservation, wildlifec f onservation, culturalresource protection, hazardous materials transportation, cleanup of spills or releases of hazardous subs u tances andpipeline and facility construc r tion. These laws and regulations require us to obtainand/or comply witha widevariety of environmentalclearances,registrations, licenses, permits andother approvals.Failure to comply with these laws, regulations, licenses and permits may exposeus tofin f es, penalties, reputational harm, claims or lawsuits fromthird parties, and/or interruptions in our operations that couldbematerialtoour results of operations or financialcondition We may
also incurmaterialcosts forcleanup of spills or releases of hazardous subs u tances. Inaddition, emissions controls and/or other regulatoryo r r permitting mandatesunderthe FederalClean AirAct, as amended (Clean AirAct), andother similarfed f eral and state lawscouldrequire unexpected capitalexpenditures atour facilities. We cannot ensure that existingenvironmentalstatutes andregulations will not be revisedorthatnew regulations will not be adopted or become applicable to us.We alsocannot ensure that existing permits will not be revisedorcancelled, potentially impactingfaci f lity construc r tionactivitiesorongoing operations
Airand Water Emissions - The Clean AirAct, the FederalWater PollutionControlAct Amendments of 1972, as amended (Clean Water Act), the Oil PollutionAct of 1990 and analogous state laws and/or regulations imposerestrictions andcontrols regarding the releaseof pollutants into the airand water inthe United States. Underthe Clean AirAct, a federaloperating permit is requiredfor f sourcesofsignificantair emissions.Wemay be required to incur certain capitalexpendituresfor f air pollution-controlequipment inconnectionwith obtaining or maintaining permits andappr a ovals forsources of airemissions
The Clean Water Act imposes subs u tantial potential liabi a lityfor f pollutantsdischarged intowatersofthe United States and requiresremediation of waters affe f cted by such discharge. The OilPollutionAct aims atpreventing and responding to oilspills in U.S. waters andshorelines
GHG Emissions - In2023, GHG emissions were approximately 3.7 millionmetric tons of carbon dioxide equivalentsofScope 1 emissions and 3 1 millionmetric tons of carbon dioxide equivalentsofScope 2 emissions.Scope 1 emissions originatefrom f thecombustionoffue f l inour equipment, suchas compressorengines and heaters, as wellas fugitivemethane emissions.Scope 2 emissions are generated from purchased power sources
In 2021, we announced a companywideabs a olute GHG emissions reductiontargetof2.2 millionmetric tons of carbon dioxide equivalentsfro f mour combined Scope 1 and Scope 2 GHG emissions by 2030 forour legacy ONEOKassets The target represents a 30% reduction incombinedoperationalScope 1 and location-based Scope 2 GHG emissions attributablle to ONEOK assets as of Dec. 31, 2019 As f of Dec. 31, 2024, we h have achiev d ed redduc i tions totalilinga g approximately 1.7 million met i ric tons of h the targgetedd2.2 ill milliionmet i ric tons of carbbon di iox d de eq i uivallents, primarily as aresultofmethane emissions mitigation, system utilizationand optimizations,electrificationofcertain naturalgas compression equipmentand lowercarbonr basedelectricity in states in whichweoperate.GHG emission reductions as reportedmay be modified,upda u ted, changedor suppl u ementedbased on availabl a e infor f mation. Forthe yearsended Dec. 31, 2024, 2023 and2022, we didnot have any material dedicated capitalexpendituresspecifically forclimate-relatedproje o cts, nor didwepurchaseorsellcarbon r creditsoroffsets. Progress todateonour goal has been accomplished through routinecapital proje o cts and assetoptimizations that were primarily performed foroperational improvements that inherently improved our emissions profile f .Wecontinue to anticipate several potential pathways toward achieving our emissions reductiontarget. In 2025, we intend to work towardsfur f ther reductions in our emissions toward our target through improvedmethane management practices andsystemoptimizationthatwillnot require material capitalexpenditures. We do not anticipatepurchasing orselling carbon creditsoroffse f ts in 2025.
We currently participate inOur Nation’s Energy(ONE)Futur t e Coalitiontovoluntarily reportmethane emission reductions and to calculate our methane intensity forour naturalgas transmission andstorage assets.Wecontinue to focusonmaintaining low methane gas releaserates throughexpanded implementationofimprovedpractices to limit thereleaseofnatur t al gasdur d ing pipeline and facility maintenance and operations.
We areaparticipant inthe American Petroleum Institute’s The Environmental Partnership and are enrolled inenvironmental performance programs thatare designed tofur f ther reduceemissions using proven, cost-effectivecontrols
Regulation g
UnitedSta S tesDepartmentofT o Transpor s tationPipelineand Haza a rdous d MaterialsS l Safet f tyAdministration (PHMS H SA) -OnJan 17, 2025, the PHMSA issued afin f al rule, which hasbeensubmitted to the Federal Registerunderscoring to pipeline and pipeline facilityoperator’s requirements tominimizemethane emissions in the Protecting our Infrastructur t eof Pipelines and Enhancing Safety (PIPES)Act of 2020. The PIPES Actdirects pipelineoperators to update their inspectionand maintenanceplans to address the eliminationofhazardous leaks and to minimize naturalgas releases from pipelinefaci f lities. Theupda u tedplans must also address the replacement or remediationof pipelinefac f ilities that historically have been knowntoexperience leaks. We have completed and continue to update our pipeline maintenanceprocedur d es to identifya f nd reducemethane leaks.
UnitedSta S tesEnv E ironmentalProtectionAgency( c (EPA) - The EPA’s Mandatory Greenhouse Gas ReportingRul R erequires annualGHG emissions reporting fromour affe f cted facilities and thecarbon r dioxide emission equivalentsfor f all hydrocarbon r liquids produced by us as if all products were combusted, even if they areusedotherwise.The additionalcosttogatherand reportthisemission data didnot have, and we do not expect it to have, a material impact on our results of operations,fin f ancial positionorcashflo f ws
In 2024, the EPA finalized its rule targeting oil and gas sectionemissions of greenhouse gases (primarily methane) andvolatile organiccompounds (VOCs) The rule includes(i) newsource performance standardscodified in 40 C.F R Part 60 Subpa u rt OOOOb fornew sources(i.e.,faci f lities thatcommenceconstruc r tion, reconstruc r tion, or modificationafter Dec. 6, 2022),(ii) emission guidelines codified in 40 C.F R Part 60 Subpa u rt OOOOc that states must use todevelopperformance standardsfor f existing sources (i.e., facilities that existedonorbefor f eDec. 6, 2022) Thisfin f al rule waschallenged incourtby states and industrys r takeholders, which litigation isongoing In addition, in January 2025, thenew administration issued an executive orderdirecting the headsofall federalagencies to identifya f nd beginthe processes tosuspend, revise or rescind allagency actions that areunduly burdensomeonthe identific f ation, developmentoruse of domestic energy resources.Consequently, future implementationand enforcementofthe finalrul r eremainuncertain.Atthis time, we do not anticipate a material impact to our plannedcapital, operations andmaintenance costsresulting fromcompliancewith thecurrent or pending regulations and proposed EPAactions However, the EPAand/or stateregulatorsmay issue additionalregulations,responses, amendments and/or policy guidance, whichcould alterour presentexpectations
R RenewableFue F l lSta S d ndard -We are an bl obligat d ed party u d nderthhe Renewabl a eFuellSta d nda d rd (RFS) prom l ulgatedby thhe EPAa d nd arereq i uired tosatiis y fy our Renewabl a e V l olume Obligatiio ( n(RVO) on an annualbasiis Tomeet our RVO, we must i ei h ther ensure h that h the transporta i tion fu l el we pr d oduc i einour optiiimizatiiona d nd ma k rketiing actiiviiitiescont i ains h themandateddrenewablle fu l el componentsor pur h chasecredits to covera y ny h shortf l falll. We g generally sa i tis y fy our RVOreq i uirements thhrough ough h thepur h chaseof RINs RINs are g generateddwhhena gallllonofrenewablle fu l el i is pr d oduc d ed anddmay b be separateddwhhenthhe renewabl a efue f lis blenddedint g ogas l oliineo d rdiieselfue f l l, at h whiich p i oint h the RIN i is av i aillabl a efor f us i eincompliianceoravaililabl a efor f salle on h theopen ma k rket.As thhe RFSproggram i is currently structur t d ed, thhe RVO ofall bl obligat d ed partiiesmay i increaseovertime lun ess adjustedby h the EPA Thhe ability ity to i incorporat i eincreasiinggv l olumes of renewabl a efue f l lcomponent i sintofue f l prodducts and thhe av i aillabi a li y ty of RINs mayb l eliiimitedd, h whiichhc l ouldincreaseour RFS compliiancecosts or lii limit our ability ility to blendd.
In 2024, the EPA finalizedchanges to the federalgasolinedistributionregulations.Wedonot anticipate amaterial impact to our planneddcapitall, opera i tions anddm i aintenance costsres l ul i ti g ng fromcompliiancewih ith h thecurrent regulgulatiions
d Addi i tionally, we are subj u ectto thhe EPA’sfue f l ls compliance regulgulatiions Thhese regulgulatiions i in l cl d ude standa d rdsfor f fu l el parameters anddreq i uire i rigorous pr d oductsampliing a d nd testiing, reco d rdkkeepiing a d nd repor i ting. Ourongoing compliance with these regulations is not expected to have amaterialadverseeffec f tonour business.
F FedderallReg l ulation - InA g ugust2022, h the Inflla f i tion R d educ i tionAct of 2022 (IRA) was i signedint l olaw Thhe IR i RAinclluddes tax cr d edits anddo h ther i incen i tives i inte d nded tocombatclilimatechha g nge by advanciingdecarbibonizatiiona d nd promotiingincreas d ed i investment i in renewabl a e a d nd l lowcarbbon r i intensity ity energy Inaddi i tion, h the IRA direct d ed h the EPA to impose a d nd collllect “Waste Emiis i sions h Chargges,”or “Me h thaneFees,”for f sp i ecificf i facili i ties h that reportmore than25,000 metric tons of carbon dioxide equivalent of GHGemissions peryear and have a methane emissions intensity in excessofthe relevant statut t oryt r hreshold. In January 2025, industrya r ssociations andcertain states challenged the Waste Emissions Charge rule in theD.C.Circuit, and the new administration issued an executiveorder directing the headsofall federalagencies to identifya f nd beginthe processes to suspend, revise or rescind allagency actions that areunduly burdensomeonthe identific f ation, developmentoruse of domestic energy resources.Consequently,fut f ture implementationand enforcementofthese rulesremainuncertain at this time.Based on text in the IRA and a relatedrul r e thatthe EPAfin f alized in November 2024 that will require paymentof Methane Fees to the EPAbeginning in 2025 (for f 2024reportedemissions), the2024 MethaneFees, ifimplemented, will not have amaterial impact on our results of operations,fin f ancialpositionorcashflo f ws.
We believe it is likelythatcontinuedfut f ture governmental legislationand/or regulationmay require us to limit GHG emissions associated with our operations, pay additionalfees f associated with our GHG emissions or purchase allowances forsuch emissions. However, wecannotpredict precisely what form thesefut f tureregulations will take, the stringencyofthe regulations, when they will become effe f ctiveorthe impact on our capital expenditures, competitivepositionand results of operations In additionto activities on thefed f eral level, state and regional initiatives could also lead to theregulationofGHG emissions soonerthanor independent of federalregulation, theseregulations couldbemorestringent than requirements inany future federal legislation and/or regulation. We monitorall relevant legislationand regulatoryi r nitiatives to assess thepotential impact on our operations andotherwise take steps to limit GHG emissions fromour facilities, including methane.
Foradditional infor f mation regarding the potential impact of laws andregulations on our operations see Item1A “RiskFactors.”
Waste -Our operations generate waste, including hazardous waste, that is subj u ect to therequirementsofthe Resource Conservationand Recovery Act, as amended (RCRA), andcomparabl a estate statut t es.We are not currently required tocomply witha substantial portion of the RCRA requirements asour operations routinely generateonly smallquantitiesofhazardous waste, andwe are not a hazardous waste treatment,storage or disposal facility operatorthat isrequired toobtaina RCRA R
permit. While the RCRAc R urrently exempts a numberoftypesofwaste frombeing subj u ect to hazardous wasterequirements, including many oiland gasexplorationand productionwastes, the EPA couldconsider the adoptionofstricterdisposal standardsfor f non-hazardous waste. Moreover, it is possible thatadditionalwaste, which could include non-hazardous waste currently generateddur d ing operations,may be designated as hazardous waste. Hazardous waste issubject to more rigorous and costly storage and disposal requirements thannon-hazardous waste. Changes inthe regulations couldmaterially increase our operatingexpenses
We ownor leasepropertieswhere hydrocarbons r have been handled formany years, during which operating and disposal standards haveevolved. Although we believe we have utilized operating and disposalpractices that meetprevailing industry r standards, hydrocarbons r or otherwaste mayhavebeen disposed of or released on, underorfro f mthe propertiesowned or leased by us or at offs f ite disposal facilities. In addition, many of thesepropertieswerepreviously operatedbythird partieswhose treatment anddisposal or releaseofhydrocarbons r or otherwaste wasnot underour control. Theseproperties and waste disposal facilitiesmay be subj u ecttoComprehensive Environmental Response Compensationand Liability Act, as amended, RCRA and analogous state laws. Underthese laws, wecouldberequired toremove or remediatepreviously disposed waste, including wastedisposed of or released by priorownersoroperators, toremediate contaminated property, including groundwater contaminated by priorownersoroperators, ortomakecapital improvements to prevent future contamination.
Pipeline andFacilitySafet f y -We are subj u ect to PHMSAsafet f y regulations, including pipeline asset integrity-management regulations The Pipeline Safety Improvement Actof2002 requires pipelinecompanies operating high-pressure pipelines to perform integrity assessments on pipelinesegments that pass through denselypopulated areas or near specifically designated high-consequence areas (HCAs) The Pipeline Safet f y,RegulatoryC r ertainty and Job CreationAct of 2011 (the 2011Pipeline Safety Act) increasedmaximum penaltiesfor f violatingfed f eralpipelinesafet f y regulations, directs the United StatesDepartment of Transportation(DOT) and Secretaryo r f Transportationtoconductfur f ther review or studi t es on issues that mayormay not be material to us andmay result in the impositionofmorestringent regulations Penalty amounts havesince been regularly adju d sted for infla f tionwiththe most recentadjustment taking effe f ct on Dec. 30, 2024 In 2015 through2022, PHMSA issued notices of proposed rulemaking for hazardous liquidpipelinesafet f y regulations,natur t al gas transmission and gathering lines andunderground naturalgas storagefaci f lities. Fornatur t al gas and naturalgas gathering pipelines, the newproposed regulations became knownas “the MegaRul R e.” The MegaRule increasedrequirementsfor f operating and maintenance, integrity management, public awareness and civil/criminalpenaltieswith full compliancedeadlines extending into 2035; however, wedonot anticipate a material impact to our plannedcapitaloroperations andmaintenance costsresultingfrom f compliancewith theserequirements.
OurNGL, Refin f ed Products andcrude oil pipelinesystems aresubject to regulationbythe DOT and PHMSA underthe Hazardous Liquid Pipeline Safet f y Act of 1979, as amended (HLPSA). The HLPSA prescribes andenfor f ces minimumfed f eral safety standardsfor f the transportationofhazardous liquids by pipeline, including thedesign, construc r tion, testing, operation andmaintenance, spillresponseplanning andoverall reporting andmanagementrelated to our pipelinefaci f lities. In additionto the amended HLPSA covered in Title 49 of the Code of Federal Regulations,subsequent statut t es provide thefra f mework forthe pipeline hazardous liquidsafet f yprogram and include provisions related to PHMSA’s authorities, administrationand regulatory r activities.
In 2020, legislationwas passed toreauthorize PHMSA through2024 Legislation iscurrently pending to extend this authorization. Certainrequirementsfor f operations andmaintenance, integrity management, leak detectionand public awarenesswill be subj u ecttofut f turerul r emaking as a result The potential capi a taland operatingexpendituresrelated to thenew regulations arenot fullyknown, but we do not anticipate a material impact to our plannedcapitaloroperations andmaintenance costsresultingfro f mcompliancewith thenew regulations
Ourmarine terminals along coastalwaterways aresubjecttoU.S.Coast Guardregulations andcomparabl a estate andmunicipal statut t es relating to the design, installation, construc r tion, testing, operation, replacementand management of these assets.
Certainofour field injectionand withdrawal wells andwater disposal wells aresubject to thejurisdictionofthe Railroad Commission of Texas(RRC) The RRC regulations require that we reportthe volumes of naturalgas andwater disposal associated with theoperations of such wells on amonthlyand annualbasis,respectively. Results of periodicmechanical integritytests must also be reported to the RRC. In addition, our underground naturalgas storagecaverns in Louisianaare subj u ect to thejurisdictionofthe LouisianaDepartmentofNatur t alResources (LDNR). In recentyears, LDNR has put in place more comprehensiveregulations governing underground hydrocarbon r storage insaltcaverns, and we believe we are in subs u tantialcompliancewith thesenewer regulations.
PHMSAregulates safety issues related todownholefac f ilities located at both intrastate and interstate underground naturalgas storagefaci f lities. PHMSAmandatescertain reportingrequirementsfor f operators of underground naturalgas storagefac f ilities andsetsminimum federalsafet f y standards. In addition, all intrastate transportation-relatedunderground naturalgas storage facilities are subj u ect to minimumfed f eral safety standards and are inspected by PHMSAorbya stateentity that haschosen to expand its authority toregulate these facilitiesundera certific f ationfile f dwithPHMSA. Stateentities thatexercisejurisdiction overour underground naturalgas storagefaci f lities include the RRC (forour underground naturalgas storagefaci f lities in Texas) and LDNR (forour underground naturalgas storagefac f ilities in Louisiana).Wedonot believe continuedcompliancewith safety standards and otherrequirementsappl a icable to our underground naturalgas storagefaci f litieswill have amaterial impact on results of operations,fin f ancialpositionorcashflo f ws
In July 2022, afir f eoccurred atour 210 MBbl/d Medfor f d, Oklahoma, NGL fractionationfaci f lity.Allpersonnelweresafea f nd accounted forwith temporarye r vacuations of local residents taken as aprecautionary measure. As aresultofthe incident, the United States Chemical Safety and Hazard InvestigationBoard (CSB)requested information including the incident investigationreportand causal factorsofthe incident, which we subm u itted to the CSB. This inquiry is stillactivewith the CSB
Pipeline Security - InApril2021, the United StatesDepartment of Homeland Security’s Transportation Security Administration(TSA) released revisedpipelinesecurity guidelines that includedbroader definitions forthe determinationof pipeline “critical facilities ” In September2024, we completedour annualreviewofour pipelinefaci f lities according to the guidelines The cost of compliance didnot have amaterial impact on our operations,fin f ancialpositionorcashflo f ws
In July 2021, the TSA began issuing pipelinesecurity directives to owners and/or operators of criticalpipeline systemsor facilities. Pursuant to thosedirectives, our Cybersecurity Implementation Planwas lastapproved inAugust2024, andour Cybersecurity Assessment Planwas lastapproved inSeptember 2024 While compliancewith thesecurity directives requires significant internaland external resources, wedonot expect it to have amaterial impact on our results of operations,fin f ancial positionorcashflo f ws
HUMANCAPITAL
The long-term sustainabi a lityofour business isdependent on our continuedabi a lity to maintain a highly engagedworkfor f ce To accomplishthis, ourbusinessstrategyincludes attracting, selecting and retaining talent, advancing an inclusive, diverse and engagedculture anddeveloping individuals and leaders
We conductemployeeengagement surveys, typically on an annualbasis In2024, the annualemployeeengagement participationrate increased to 93% compared with 90% in 2022, the lastyear a surveywas conducted. We didnot complete a survey in 2023 as we focusedonstabi a lizing and integrating our employeebasefol f lowing the MagellanAcquisition. The overall engagement mean increased to the 80th percentile and theratio of engagedemployees to activelydisengaged also increased.All leaders havebeenasked to discuss the 2024 survey results with theirteams and create anengagement plan for 2025. Training andsupportresources are availabl a e through our learning management system, the Gallupe u ngagement portal anddedicated individuals,engagement champions, within thebusiness.
As of Dec. 31, 2024, we had5,177 employees, which excludes EnLinkemployees Listedbelow is a summary of our human capitalresources,measures andobjectives that arecollectivelyimportant to our success as anorganization.
Values -Our successreliesonthe skills,experience anddedicationofour employees.We are committed tocultivating an inclusive and dynamic work environmentwhere peoplecan find opportunities tosucceed,grow and contribute to the successof thecompany Ouremployees work each dayto provide safe andreliabl a eservices to a widerange of customers inthe states whereweoperate.Our core values, listedbelow,guide our employeebehaviors and the ways in whichweconductour business andoperations
•Safet f y&Environmental: we commit to a zero-incident culture forthe well-being ofour employees, contractors and communities and tooperate in an environmentally responsible manner.
• Ethics: we actwith honesty, integrity and adherence to the highest standardsof personaland profes f sionalconduct.
• Inclusion &Diversity:werespect theuniqueness andworth of each individual, andwebelieve that an inclusiveculture anddiverse workforce are essentialfor f a sense of belonging, engagement andperformance.
• Excellence: we holdourselves andothers accountable to a standard of excellence through continuous improvement and teamwork.
•Service: we invest our time,effort andresources to serveeachother, our customers and communities.
• Innovation: we seek to developcreativesolutions by leveraging collaborationthrough ingenuity and technology.
Inclusionand Diversity -Our inclusionand diversity (I&D)strategyis a cross-functionaleffort that drawsupon u contributions fromemployees at all levelsofthe organizationand is focusedonenhancing the workpl k ace to attract andretaintalent. The strategy is guidedbya council composed of a diverse group of employees whorepresent different demographics, work locations, pointsofview, roles and levels of seniority We also have a team within our human resources department that is wholly dedicated to suppor u ting our I&D efforts.
We provide suppor u tfor f four employee-ledbusinessresource groups (BRGs) that include a Racial/Ethnic Inclusion Resource Group, Veterans Resource Group, Women’s Resource Group and LGBTQ+Resource Group Thepurpos r eofthese groups is to promote the attraction, development, engagement andretentionofmembers of traditionally underrepresented groups in our industrya r nd workpl k ace in an effo f rt to drivepositivebusinessoutcomes. A key factor in thesuccessofour BRGs is the active participationbyofficer-level executivesponsors and allies from outside theBRG’s underrepresentedpopulations.All employees are invited tobecomesupporters of our BRGs
We embed I&D concepts into our core leadership developmentcurriculumand sponsor anumberofinternal programs intended to promote I&D Inaddition, we seek to give back to thecommunitieswhere we operate by partnering on initiatives to suppor u t underrepresentedcommunity members and local charitable organizations.
EmployeeSafet f y - The safety of our employees is criticaltoour operations andsuccess. By promoting the safety of our employees andmonitoring the integrity of our assets, we are investing inthe long-term sustainabi a lity of our businesses. We continuously assess therisks our employees face in their jobs, and we work to mitigate thoserisks through training,appropriate engineering controls, workprocedur d es andother preventive safety programs. Reducing incidents and improving our personal safety incident rates are important,but we arenot focusedonlyonstatistics. Lowpersonalsafet f yincidentrates alone cannot preventa large-scale incident, which iswhy we continue to focusonenhancing our Environmental, Safety and Health management systems and processsafet f yprograms, suchas key risk/keycontrol identific f ationand knowledge sharing. We endeavor to operate our assets safely,reliabl a yand in an environmentally responsible manner. We maintain mature androbust programs thatguide trainedstaff in thecompletionofthese activities, andwecontinue to enhance and improve theseprograms andour internal capabilities.
Health andWelfare -Weprovide a variety of benefits to helppromote the health andwelfare of our employees and their families. Thesebenefit f s include medical, dentaland vision plans, virtua t l health visits andengagement of third-party service providers to offe f rcompany on-site andnear-site clinics inseveral of our operating areas. Eligible employees also have access, at no charge, to anemployee assistanceprogram, a medicalsecond opinion service and a health careconciergeservice to assist withfinding in-networkproviders andbillingresolution. We offe f rful f l pay formaternity, paternity or adoption leaveofupt u o 240 hours per qualifyingevent.We also provide up to $10,000 forreasonabl a e and necessary expenses of a qualifyi f ng adoption and/or surrogacy.Additionalbenefits f availabl a efor f thewelfare of our employees include, among others, lifei f nsurance and long-term disabi a lityplans, health anddependent care flexible spending accounts, fertility benefits, diseasepreventionand management programs and fullpaywhile on bereavement, military or personaland family care leave. We expect that beginning on May1,2025, legacy EnLink employees will have access to these ONEOK health andwelfare benefits
We also provide theopportunity forour employees to help fellow employees through the ONE Trus r tFund by contributing donatedvacation hoursormonetary donations. The ONE Trus r tFund is anonprofit, f charitabl a eorganizationrun r entirely by employeevolunteers, that serves our employees in timesof personalcrisesdue d to naturaldisasters,medical emergenciesor other hardships.Further, weprovide volunteer opportunities andvolunteer grants, aswellas $10,000 of charitabl a e giving matching, annually, through the ONEOKFoundation. Subs u equent to the EnLinkAcquisitioncompleted on Jan. 31, 2025, we expect legacy EnLink employees to have access to the ONE Trus r tFund benefits andcan beginmaking contributions to thefund f beginning on May1,2025
Personal and ProfessionalDevelopment -Weprovide various options to assist with career growth anddevelopment. For employees just entering theworkfor f ce whodesire to advance their career andcontinue to learnorfor f theemployees who are interested in developing theirskills, weprovide educ d ationand training in a variety of areas, including leadership,func f tionaland industryr specific topics, professionaldevelopmentand skill-building opportunities. Ourorganizationaldevelopmentand I&D teams provide live in-person andvirtual classroom training, computer-based self-s f tudy andone-on-one coaching that is availabl a e to all employees
We valueeducationand assist eligible employees with theexpenseoffur f thering their educ d ation in job-relatedfie f lds, including up to $5,250 peryear inqualifyingtui t tionexpenses.We alsomay reimburse employees forcertain job-relatedprofes f sional certific f ationexamination fees
Recruiting -Wemake ita priority to attract, select, develop, motivate, challenge andretainthe talent necessary to suppor u tour key businessstrategies. We use targetedrecrui r tment events,maintainstrong relationships with area technical schools, colleges anduniversities, andweoffercompensationbenefits f andcareeropportunities thatare designed to positionus as anemployerof choice I&D continues tobe apriority in recrui r ting, andwedeploy sourcing strategies designed to access talentfro f mgroups that are historically underrepresented inour industrya r nd workpl k ace.
Retirement -Wemaintaina 401(k) Plan forour employees andmatch100% of employeecontributions up to 6% of eligible compensationeachpayroll period, subj u ect to applicable taxlimits. We have a legacy definedbenefit f pension plancovering certain employees andfor f meremployees, which closed to newparticipants in 2005 In addition, as aresultofthe Magellan Acquisition, we assumed the pensionand postretirementbenefit f obligations for Magellanemployees andfor f meremployees Theseobligations arecomposed of twodefin f ed benefit pension plans, including one fornon-union employees andone forunion employees, aswellas apostretirementwelfare benefit planfor f certainemployees The pension planfor f non-union employees closed to newparticipantsupon u theclosing of the MagellanAcquisition. Thepension plan forunion employees closed to new participants in January2 r 024 Employees whodonotparticipate inour definedbenefit f pension planare eligible to receive quarterlyand annualprofit f -sharing contributions underour 401(k) Plan Effective Jan.1,2025, theprofit-sharingquarterly contributions increased to 6% from1% ofquarterly eligible compensation. We will continue to make annualdiscretionary contributions of up to 2% of eligible compensation. As of Dec. 31, 2024, 96% of eligible employees were contributing toour 401(k) Plan.For additional infor f mationabout a our retirementbenefits f ,see Note M ofthe Notes toConsolidated Financial Statements in this Annual Report.
INFORMATION ABOUT OUREXECUTIVE OFFICERS
Allexecutiveofficers areelected annually by our BoardofDirectors.Our executiveofficers listedbelow include theoffic f ers who havebeen designatedbyour BoardofDirectors asour Section 16executiveofficers
Name and Position Age Business Experience inPast Five Years
Julie H.Edwards
66 2022 to presentBoard Chair, ONEOK Board Chair 2007 to 2022 BoardDirector,ONEOK
Pierce H Norton II
65 2021 to present President and Chief Executive Offic f er,ONEOK
Presidentand Chief Executive Officer 2021 to present Memberofthe BoardofDirectors,ONEOK
2014 to 2021 Presidentand Chief Executive Offic f er,ONE Gas, Inc. 2014 to 2021 Member of theBoard of Directors, ONE Gas, Inc
Walter S. Hulse III
612022 to present ChiefFinancial Offi f cer,Treasurer andExecutive VicePresident, Investor Relations and CorporateDevelopment,ONEOK
ChiefFinancial Offi f cer, Treasurer and Executive Vice President, Investor Relations and Corpor r ate Development 2019 to 2021
Kevin L Burdick
Executive Vice President and Chief Enterprise Services Offi f cer
SheridanC.Swords
ChiefFinancial Offi f cer,Treasurer andExecutive VicePresident, Strategy and CorporateAffairs, ONEOK
60 2023 to present Executive Vice President and Chief Enterprise Services Offi f cer, ONEOK
2022 to 2023 Executive Vice President and Chief CommercialOfficer,ONEOK
2017 to 2022 Executive Vice President and Chief OperatingOfficer, ONEOK
2025 to present
Executive Vice President and Chief Commercial Offi f cer 2023 to 2025
Lyndon C.Taylor
Vice President and Chief CommercialOfficer,ONEOK
Vice President,Commercial Liquids and Gathering and Processing, ONEOK 2022 to 2023 Senior Vice President, NaturalGas Liquids and Natur t al GasGathering and Processing, ONEOK
2017 to 2022 Senior Vice President, NaturalGas Liquids,ONEOK
66 2023 to present Executive Vice President,Chief LegalOfficerand AssistantSecretary,ONEOK
Executive Vice President,Chief LegalOfficer and AssistantSecretary r 2005 to 2021 Executive Vice President and Chief Legaland Administrative Offic f er,Devon Energy Corporation
Randy N Lentz
60 2025 to present Executive Vice President and Chief OperatingOfficer, ONEOK
Executive Vice President and Chief Operating Offi f cer 2010 to 2024 Presidentand Chief Executive Offic f er, Medallion Midstream, LLC
Charles M.Kelley (a)
66 2022 to presentSeniorVice President, Natur t al Gas Pipelines,ONEOK
Senior Vice President, NaturalGas Pipelines 2018 to 2022
Mary M. Spears
Senior Vice Presidentand ChiefAccounting Offi f cer,Finance and Tax
Senior Vice President, NaturalGas,ONEOK
45 2022 to presentSeniorVice President and Chief AccountingOfficer,Finance and Tax,ONEOK
2019 to 2021 Vice Presidentand ChiefAccountingOfficer, ONEOK
) - Charles M Kelleyhas announced hisretirement, effe f ctive March2025
No family relationships existbetween anyofthe executiveoffic f ers, nor is there any arrangement or understanding between any executiveofficer and any other person pursuanttowhich theoffic f er wasselected
We make availabl a e, freeofcharge, on our website (www.oneok.com) copies of our Annual Reports,Quarterly Reports,Current Reports on Form 8-K, Proxy Statements, amendments to thosereports filedorfur f nished to the SEC pursuanttoSection 13(a) or 15(d) of the Exchange Actand reports of holdings of our securitiesfile f dbyour offi f cers and directorsunderSection16ofthe Exchange Actassoon as reasonablypracticable afte f rfil f ingsuchmaterialelectronically or otherwisefur f nishing itto the SEC. Copies of our Code of Business Conductand Ethics,Corpor r ate Governance Guidelines,Director Independence Guidelines, Corporate Sustainability Reportand thewrittenchartersofour Board Committees also are availabl a eonour website, andwewill provide copies of thesedocuments upon request
In additiontoour filings with the SEC andmaterials postedonour website, we alsouse social mediaplatfor f ms as additional channels of distributiontoreachpublic investors. Informationcontainedonour website, or postedonour social media accounts, including anycorresponding applications, are not incorporated by reference into thisreport.
ITEM 1A. RISKFACTORS
Youshouldconsider carefully thefol f lowing discussion of risks, as wellas allofthe other infor f mationcontained inthisAnnual Report. Ourbusiness, financialconditions,results of operations or prospectscouldbematerially and adverselyaffected by any of theserisks or uncertainties.
RISK FACTORS RELATED TO OUR BUSINESSAND INDUSTRY R
If the level of drilling inthe regions in whichweoperate declines substantially near ourassets,our volumes and revenuescould decline.
Ourgathering and transportation pipelinesystems aredependent upon productionfro f mnatur t al gas and crude r oilwells, which naturally declineovertime. As aresult, our cashflo f ws associated with thesewells mayalsodeclineovertime Inorder to maintain or increase throughput levels on our gathering and transportation pipelinesystems and the assetutilizationrates at our processing andfra f ctionationfac f ilities, we must continuallyobtainnew suppl u ies. Ourabi a lity to maintain or expand our businessesdepends largelyonthe levelof drilling and production by thirdparties inthe regions in whichweoperate.Our naturalgas, NGL andcrude suppl u y volumes may be impacted if producerscurtail or redirect drilling and productionactivities. Drilling and productionare impacted by factorsbeyond our control, including:
•demand and prices fornatur t al gas, NGLs, Refined Products andcrude oil;
• producers’ access to capital;
• producers’ finding anddevelopmentcosts of reserves;
• producers’ abilitytosecuredrilling and completion crews and equipment;
• producers’ desire andabi a lity to obtainnecessary permits, drillingrights and surface access ina timely mannerand on reasonable terms;
•crude oiland associated naturalgas fieldcharacteristics andproduction performance;
•regulatoryc r ompliance and environmentalorother governmental regulations;
•reserve performance; and
•capacity constraints and/or shutdowns on thepipelines that transportcrude oil, naturalgas, NGLs and Refined Products from producing areas andour facilities.
Commodity prices aresubject to significantvolatility. Drilling andproductionactivity levels may varya r crossour geographic areas; however, aprolongedperiodoflow commodity prices may reduc d edrilling and productionactivities across allareas. Ifwe are notable to obtainnew suppl u ies toreplace thenatur t al decline involumes fromexisting productionor reductions in volumes becauseofcompetition, throughput on our gathering and transportation pipelinesystems and the utilizationrates of our processing andfra f ctionationfaci f lities woulddecline, whichcould affectadverselyour business, results of operations,fin f ancialpositionand cashflo f ws
Ouroperating resultsmay be affe f cted adverselyby unfavor f able economicand market conditions.
Uncertainty or adversechanges ineconomic conditions worldwide, in the United States, or in theeconomic regions in which we operate, couldnegativelyaffect thecrude oiland naturalgas markets, resulting inreduc d ed demand and increased price competitionfor f our services andproducts, orotherwise affe f ctadverselyour business, results of operations,fin f ancialposition andcashflo f ws.Volatilityincommodity prices mayhave an impact on many of our suppl u iers andcustomers, which, intur t n, could have a negative impactontheir ability to meet theirobligations to us Periods of severe volatility in equity andcredit
marketsmay disrupt r our access to such markets, make it difficult to obtainfin f ancing necessary to expand facilitiesoracquire assets, increasefin f ancing costs and result in the imposition of restrictivefin f ancial covenants. Also,economic conditions following the COVID-19 pandemic included increased inflation. While infla f tion has declined since the second half of 2022, inflationary pressures haveresulted in, andmay continue to result in, additional increases to thecostofour materials, services andpersonnel, whichcould increaseour capitalexpenditures and operating costs.Sustained levels of high inflationcaused the FederalReserve System andother central banks to increase interestrates, which maycause thecostofcapitalto increase and depresseconomic growth,either of which, or thecombinationof both, could affectadverselyour business, results of operations,fin f ancialpositionand cashflo f ws
Thevolatilityofnatural gas,NGL, Refin f ed Products andcrude oilprices could affect adverselyour earnings andcash flows.
Lowercommodity prices couldreduc d ecrude oil, naturalgas and NGLproduction, whichcoulddecrease the demand forour services.Additionally,aportion of our revenues are derivedfro f mthe sale of commodities thatare receivedor purchased in conjunctionwithour gathering,processing, fractionation, transportationand storageservices.Ascommodity prices decline, we couldbepaid lessfor f our commodities thereby reducing our cashflows. Historically, commodity prices have been volatile and can change quickly. It is likelythatcommodity prices will continue to be volatile in thefut f ture.
Theprices we receive forour commodities are subj u ect to wide fluctuations in response to a varietyoffact f orsbeyond our control, including, but not limited to, thefol f lowing:
•overall domestic and globaleconomic conditions anduncertainty;
•changes inthe suppl u yof, anddemandfor, f domestic andfor f eign energy, even if relatively minor;
•marketuncertainty;
•the occurrenceofwars(suchas theRus R sian invasion of Ukraine), the activitiesofthe OrganizationofPetroleum ExportingCountries (OPEC) andother non-OPEC oil producing countries with largeproductioncapacity, orother geopolitical conditions (including instabilityinthe Middle East) impactingsupplyand demand fornatur t al gas, NGLs, Refined Products andcrude oil;
• production decisions by othercountries, and thefai f lure of countries to abideby recentagreements relating to productiondecisions;
•the availabi a lity andcostofthird-party transportation, naturalgas processing andfra f ctionationcapacity;
•the levelofconsumer productdemand and storage inventoryl r evels;
•ethanerejection;
•weatherconditions;
• public health crises, including pandemics(suchas COVID-19);
•domestic andfor f eign governmental regulations and taxes;
•the price and availabi a lityofalternativefue f ls;
•speculation inthe commodity futuresmarkets;
•the effe f ctsofimports andexports on theprice of naturalgas, NGLs, Refined Products, crude oiland liquefied natural gas;
•the effe f ct of worldwideenergy-conservation measures;
•the impact of newsupplies, newpipelines, processing andfra f ctionationfaci f litieson location price differentials; and
•technologyand improvedefficiency impactingsupplyand demand fornatur t al gas, NGLs, Refined Products andcrude oil.
Theseexternalfact f ors and thevolatile nature of theenergy markets make it difficult to reliabl a y estimate future prices of commodities and the impact commodity priceflu f ctua t tions have on our customers and theirneed forour services, which could affe f ctadverselyour business, results of operations,fin f ancialpositionand cashflo f ws.
Reduced volatility inenergyprices or new government regulations coulddiscourage ourstorage customers from holding positions in Refin f ed Products,crude oil and naturalgas, which could adverselyaffect our business.
Thedemandfor f our storageservices hasresulted in partfro f mcustomers’ desire to have the ability to take advantageof profit opportunitiescreated by thevolatility in prices of Refined Products, crude oiland naturalgas. Periods of prolongedstabi a lity or declines in thesecommodity prices couldreduc d edemandfor f our storageservices Iffed f eral,state or internationalregulations arepassed thatdiscourageour customersfro f mstoring thesecommodities, demand forour storageservices coulddecrease, in whichcasewemay be unable to identifyc f ustomers willing to contract forsuchservices or be forced to reduce the rateswe charge forour services. The realizationofany of theserisks could adverselyaffect our business.
We depend on producers, gathering systems, refin f eriesand pipelines owned and operatedbyothers to supplyour assets, and any closures, interruptions or reduced activity levels at thesefac f ilitiesmay adverselyaffect our business, resultsof operations, financialpositionand cash flows.
We depend on crude r oil production andonconnections with gatheringsystems,refin f eries and pipelines owned and operatedby thirdparties tosupplyour assets.Wecannot controlor predict the amount of productthatwill be delivered to us by the gatheringsystems andpipelines that suppl u your assets,nor canwecontrolor predict theoutput t of refineries that suppl u your Refined Products pipelines and terminals. Changes inthe qualityorquantity of this crude r oil production, outages at these refineriesorreduc d ed or interrupted throughput on gatheringsystems or pipelines due to weather-relatedorother naturalcauses, competitivefor f ces, testing, line repair, damage, reduced operating pressuresorother causescouldreduc d eshipments on our pipelines or result in our being unabl a e toreceive products at or deliver products fromour terminals, anyofwhich could adverselyaffect our business, results of operations,fin f ancialpositionand cashflo f ws.
Refineries that suppl u yorare suppl u iedbyour facilities aresubje b ct to regulatoryd r evelopments, including but not limited to low carbon fuel standards, regulations regardingfue f lspecifications, plant emissions andsafet f yand security requirements thatcould significantly increase the cost of theiroperations andreduc d e their operatingmargins Inaddition, theprofitabi a lity of the refineries that suppl u your facilities issubject to regionaland globalsupplyand demand dynamics thatare difficult to predict. A period of sustainedweak demand or increased costscouldmakerefin f ing uneconomic forsomerefin f eries, including those directly or indirectly connected to our Refined Products andcrude oil pipelines. The closureofa refinery that delivers product to or receivescrude oilfro f mour pipelines couldreduc d e the volumes we transport. Further, theclosure of theseorother refineries couldresult inour customerselecting tostore anddistribute Refin f ed Products andcrude oilthrough their proprietary terminals, whichcouldresult ina reduction indemandfor f our storageservices
Increasing attentiontoESG issues, including climatechange, may impact our business.
There are expectations that companies across all industries address ESG issues, including climate change.Changes in regulatoryp r olicies, public sentimentorwidespread adoptionoftechnologies that aimto addressclimate change through reducingGHG emissions may result ina reduction inthe demand for hydrocarbon r products,restrictions on theiruse or increased useofalternativeenergy sources These changescouldreduc d e the demand forour services, impacting our business, results of operations,fin f ancialpositionand cashflo f ws.
In addition, increasing attentiontoclimate change hasresulted inan increased likelihood of governmental investigations, regulation, shareholderactivismand private litigation, whichcould increaseour costsorotherwise affe f ctadverselyour business. Forexample, the SECfin f alized newclimate change disclosure requirements in March2024 but stayed therul r es in April2024 pending judicial review of several lawsuitsfil f ed by states, industrya r nd environmentalgroups challenging therul r e. It is unclear when therul r es will become effe f ctive, if at all. If theseorany otherclimate disclosure requirementsbecome effe f ctive, we mayfac f e increased costs associated with complying with such newclimate disclosure rules.
Certain investors are increasinglyfoc f used on ESG issues, including climate change.Further, organizations thatprovide informationto investorsoncorpo r rate governance andrelated matters have also increased theirfoc f us on ESG issues and have developedratings processesfor f evaluating companies on various ESG initiatives.Unfav f orable ESGratings maylead to increased negative investor sentiment toward us or midstreamcompanies in general. Due toclimate change concerns,some investorsmay choose not to invest, ortoreduc d e investment, in companies thatexplorefor f , produce, process, transportorsell products derivedfro f m hydrocarbons r . Ifthisnegative investor sentiment increases, wemay seereduc d ed demand forour securities, whichcould impactour liquidity or thevalue of our securities. Additionally, certain large institutional lenders have announced theirown policies tomeetpublicly announced climate commitments, whichoften involve commitments toshift lending activities in theenergy sectortomeet GHG emissions goals.As a result, certain institutional lenders mayimpose additionalrequirementsonus, or decide not to lend to us,based on ESG concerns, which could adverselyaffect our access to capitalonreasonable terms or at alland, as aresult, our financialcondition To theextentfin f ancial marketsviewclimate change andemissions of GHGs as afin f ancial risk, thiscould alsonegativelyaffect our ability to accesscapitalorcause us to receive less favorable terms and conditions in future financings
In 2021, we announced a companywideabs a olute GHG emissions reductiontargetof2.2 millionmetric tons of carbon dioxide equivalentsfro f mour combined Scope 1 and Scope 2 emissions by 2030 forour legacy ONEOKassets. The target represents a 30% reduction incombinedoperationalScope 1 and location-based Scope 2 GHG emissions attributable to ONEOKassets as of Dec. 31, 2019. To theextentthatthe potential pathwayswe have identifie f d to achieve this emissions reductiontargetare not availabl a e tous, or to theextentweotherwise areunabl a e tomakeprogress towardother ESG-related targets we may establish, we mayface f additionalcosts to meet these targets, orwemay fail to meet them, which couldnegativelyimpact our business andreputation.
We maybesubject to risksassociatedwiththe physicalimpacts of climatechange.
The threat of globalclimatechange maycreatephysical andfin f ancial risks toour business. Some of our customers’ energy needsvaryw r ith weatherconditions, primarily temperatur t e. To theextentweatherconditions may be affected by climate change, customers’ energyuse could increaseordecrease depending on thedur d ationand magnitude of anychanges. Increased energy usedue d to weatherchanges may require us to invest in more pipelines andother infrastructur t e toserve increased demand. Adecrease inenergyuse due to weatherchangesmay affe f ct our financialconditionthrough decreased revenues. Extremeweatherconditions in generalrequire more system backup, k adding to costs, andcan contribute to increased system stresses, including damage to our assets or service interrupt u ions.Weatherconditions outside of our operating territory could also have an impact on our revenues. Severe weather impactsour operating territories primarily through hurricanes, thunderstorms, tornados,flo f ods,fre f ezing temperatur t es andsnow or icestorms. To theextentthe severity or frequencyof extremeweatherevents increases, thiscould increaseour cost of providing services, including thecostofinsurance, and the availabi a lity of certain insurancecoveragescoulddecrease. We may not be able to pass on the highercosts to our customersor recoverall costsrelated to mitigating these physical risks.
Ouroperationsare subject to operational hazardsand unfor f eseen interruptions, which could affect adverselyour business andfor f whichwemay not beadequately insured.
Ouroperations aresubject to allthe risks and hazards typicallyassociated with theoperationofgathering, transportationand distribution pipelines,storage facilities and processing andfra f ctionationfaci f lities, which include,but arenot limited to, leaks, pipelinerupt r tures, damagebythird parties, thebreakdownorfai f lure of equipmentor processes and theperformance of facilities belowexpected levels of capa a city andefficiency.Other operational hazards andunfor f eseen interruptions include adverse weatherconditions (including extremecoldweather),public health crises including apandemic (suchasCOVID-19), cybersecurity attacks, geopolitical events, accidents, explosions,fir f es, the collisionofequipmentwith our pipelinefaci f lities(for example, this mayoccur if a third partywere to perform excavationorconstruc r tionworknear our facilities) andcatastrophic events suchas tornados, hurricanes,earthquakes, floods andother similareventsbeyond our control. Similaroperational hazards andunfor f eseen interrupt u ions mayalso impactour producersorsuppliers;for f example, extremecoldweathercan result in suppl u y reduc d tions from producer wellhead freeze-offs, aswellas power curtailmentsoroutages.A casualty occurrencemay result in inju n ry or loss of life,extensive propertydamageorenvironmentaldamage. Theoccurrenceofoperational hazards and unfor f eseen interrupt u ions could affectadverselyour business, results of operations,fin f ancialpositionand cashflo f ws.
Premiums anddeduc d tibles forcertain insurancepoliciescan increasesubstantially, and, in some instances, certain insurance may become unavailabl a eoravailabl a eonlyfor f reduced amountsofcoverage.Consequently, wemay not be able to renew existing insurancepoliciesor purchaseother desirabl a e insurance on commercially reasonable terms, ifatall. Insurance proceedsmay not be adequate to coverall liabi a litiesor incurredcosts and lossesor lostearnings.Further, we are not fully insured against allrisks inherent to our business. If we were to incura significant liabi a lity forwhich we were not fullyinsured, it could affectadverselyour business, results of operations,fin f ancialpositionand cashflo f ws.Further, the proceedsofany such insurancemay not be paid in a timely mannerorreachthe levelofcoverage purchased.
Continueddevelopment of supplysources outsideof our operatingregions could impact demandfor f ourservices.
Productionareas outside of our operatingregions maycompete with naturalgas, NGL, Refin f ed Products andcrude oilsupply originating in productionareas connected to our systems, whichmay cause products in suppl u yareas connected to our systems to be diverted to marketsother than our traditionalmarketareas andmay affe f ct capacity utilizationadverselyonour pipeline systems and our abilitytorenew or replace existing contracts.
We do nothedge fully against commodity priceriskorinterestraterisk, including commodity pricechanges,seasonal pricediffe f rentials, productprice differentialsorlocationprice differentials.This couldresult indecreasedrevenues, increasedcosts and lower margins, affe f ctingadverselyour resultsof operations.
Certainofour businesses are exposed to market risk and the impact of marketfluctuations in naturalgas, NGL, Refin f ed Products andcrude oil prices. Market risk refers to theriskoflossoffut f turecashflo f ws andearnings arisingfro f madverse changes incommodity prices.Our primaryc r ommodity priceexposures arisefro f m:
•the valueofthe commodities sold underfee f withPOP contractsofwhich we retain aportionofthe sales proceeds;
• product price differentials;
• location price differentials;
•seasonal price differentials;
•the priceriskrelated to electriccosts to operate our facilities; and
•the fuel costs and thevalue of theretainedfue f l in-kind in our naturalgas pipelines andstorage operations.
To manage theriskfro f mmarket price fluctuations in naturalgas, NGLs, Refined Products andcrude oiland electricity prices, we mayuse derivative instrum r ents suchas swaps, futures, forwards andoptions However, wedonot hedge fully against commodity pricechanges, andwe therefore retain some exposure tomarketrisk. Further, hedging instruments thatare used to reduceour exposure to interest-rate fluctuations couldexposeus toriskoffin f ancial loss wherewemay contract forfix f ed-rate swap instruments to hedge variable-rate instruments and thefix f ed rate exceeds the variable rate.Finally, hedging arrangements forfor f ecastedsales andpurchases areused toreduc d eour exposure tocommodity priceflu f ctua t tions andmay limit thebenefit f we wouldotherwise receive if marketprices fornatur t al gas, NGLs, Refined Products andcrude oildiffe f rfro f mthe statedprice in the hedge instrument forthese commodities.
A breach of informationsecurity, includinga cybersecurityattack,orfai f lure of oneormore key informationtechnology or operational systems, or thoseof third parties, mayaffec f tadverselyour operations, financial results or reputation.
Ourbusinesses are dependent upon our operationalsystems to process a large amount of data andcomplex transactions The various uses of these infor f mationtechnology systems, networks andservices include,but arenot limited to:
•controlling our plants andpipelines with industrialcontrolsystems including Supe u rvisoryC r ontroland Data Acquisition;
•collecting and storing customer, employee, investor andother stakeholder infor f mationand data;
• processing transactions;
•summarizing andreporting results of operations;
• hosting,processing andsharing confid f ential andproprietary research,business plans andfin f ancial information;
•complying with regulatory, r legal, financialortax requirements;
• providing data security; and
•other processesnecessary to manage our business.
If anyofour systems isdamaged,fai f ls to function properlyorotherwise becomesunavailabl a e, we mayincur subs u tantialcosts to repair or replace them andmay experience loss or corrup r tionofcritical data and interrupt u ions or delays in our abilityto perform critical functions, which could affectadverselyour business and results of operations.Our financialresults could alsobe affe f cted adverselyifour operationalsystems failas aresultofan inadvertenterrororbydeliberate tampering with or manipulationofour operationalsystems. Inaddition, dependenceupon u automatedsystems mayfur f ther increase the risk that operationalsystemfla f ws or employeeorthird-party tampering ormanipulationofthosesystems will result in losses thatare difficult to detect.
Due to increased technology advances and an increase inremoteworkarrangements, we have become more reliant on technology to help increase effi f ciency in our businesses. According toexperts, there has been arise inthe numberand sophisticationofcyberattacks on companies’ networkand informationsystems by bothstate-sponsored andcriminal organizations and, as aresult, therisks associated with such an eventcontinue to increase. Asignificantfai f lure, compromise, breach or interruption inour systems, or thoseofour vendorsorcounterpa r rties, couldresult ina disrupt r ionofour operations, physical or environmentaldamages, customerdissatisfaction, damage to our reputationand a lossofcustomers or revenues. If any suchfai f lure, interrupt u ionorsimilarevent results in the improperdisclosureofinfor f mationmaintained inour information systems and networks or thoseofour vendors and counterpa r rties, including personnel, customer,vendor andcounterpa r rty information, we could alsobesubje b ct to liabi a lity underrelevantcontractua t lobligations, laws and regulations protecting personaldataand privacy Effortsbyus and our vendors and counterpa r rties todevelop, implement andmaintainsecurity measures may not be successful f in anticipating, detecting or preventing these events fromoccurring, due in part to attackers’ ever-changing methods andefforts toconceal theiractivities, and any network and infor f mationsystems-relatedeventscould require us to expend significant resources to identify, assess andremedy suchevents. Cybersecurity, physical security and the continueddevelopment andenhancementofour controls, processes and practices designed to protect our enterprise, informationsystems anddatafro f mattack, damageorunauthorized access and to identifya f nd appropriately reportcyberattacks, remain apriority forus. Although we believe that we have robust infor f mationsecurity procedur d es andother safeguards in place, including sufficient insurance, as cyberthreatscontinue to evolve, wemay be required toexpend additionalresources to continue to enhanceour informationsecurity measures and/or to investigate and remediate infor f mationsecurity vulnerabi a lities
Cyberattacks against us or others in our industryc r ouldresult inadditionalregulations or cumbersome contractua t lobligations Current effo f rtsbythe federalgovernment,suchas the Improving Critical Infrastructur t e Cybersecurity executiveorder, and the TSAsecurity directives, haveutilized significant internaland external resources, and anypotentialfut f turestatutes, regulations or orders could lead tofur f ther increasedregulatoryc r ompliancecosts, insurance coverage costsorcapitalexpenditures. We cannot predictthe potential impact to our businessresultingfro f madditionalregulations
Terrorist attacks, includingcyber sabotage,aimed at ourfac f ilitiescould affe f ct adverselyour business, results of operations, financialpositionand cash flows.
The United Statesgovernment has issued warnings that energy assets, including our nation’s pipeline infra f structur t e, may be the future target of terrorist organizations or “cybersabotage” events.For example, in May 2021, aransomware attack on amajor U.S. RefinedProducts pipelinefor f ced theoperatorto temporarily shut downthe pipeline, resulting indisrupt u ionoffue f lsupplies along the EastCoast Potentialtargets include our facilities, pipelines, databases or operatingsystems.A terrorist attack could createsignificant price volatility, disrupt u our business, limitour access tocapitalmarkets or cause significant harmtoour operations, including full or partialdisrupt u iontoour abilityto provide service toour customers. Acts of terrorism, aswellas events occurring in response toor inconnectionwithactsofterrorism, could alsocause environmentalrepercussions that could result in a significant decrease in revenuesorsignificantreconstruc r tionorremediationcosts The potentialfor f an attackmay subj u ect our operations to increasedrisks andcosts, and any suchterrorist attack or cybersabotageonour facilities, pipelines, databa a sesofoperatingsystems, thoseofour customers, or in some cases, thoseofother pipelines could have a materialadverse effe f ct on our business, resultsofoperations,fin f ancialpositionand cashflo f ws
Growingour businessbyconstructingnew pipelinesand facilitiesormakingmodific f ations to ourexistingfac f ilities subjects us to construction risk andsupplyrisks,should adequate naturalgas,NGL, Refin f ed Products andcrude oil supplybeunavailableuponcompletionof the facilities.
To expand our business, we regularly construc r tnew andmodify or expand existing pipelines and gathering,processing, storage andfra f ctionationfaci f lities. Theconstruc r tionand modificationofthese facilitiesmay involve thefol f lowing risks:
• proje o ctsmay require significantcapitalexpenditures, whichmay exceed our estimates, and involve numerous regulatory, r environmental, political, legal andweather-relateduncertainties;
• proje o ctsmay increase demand for labor,materials andrightsofway, which may, in turn, affect our costs and schedule;
•wemay be unable toobtainnew rightsofway or permits toconnect our systems tosupplyordownstream markets;
• ifweundertake these projects, wemay not be able to complete them on scheduleoratthe budgetedcost;
•our revenuesmay not increase immediatelyupon u theexpenditure of funds on aparticular project.For instance, if we build anew pipeline, theconstruc r tionwilloccuroveranextendedperiodoftime, and we will not receive any material increases in revenuesuntil afte f rcompletionofthe project;
•wemay construc r tfac f ilities to capt a ture anticipated future growth in productionordownstream demand in which anticipated growthdoesnot materialize;
•oppositionfro f menvironmentaland social groups, landowners, tribalgroups, local groups andother advocates could result in organizedprotests, attempts to blockorsabotageconstruc r tionactivitiesoroperations, intervention in regulatoryo r radministrativeproceedings involving our assets, or lawsuits or otheractions designed to prevent, disrupt u or delaythe construc r tion or operationofour assets;
•wemay be required torelyonthird partiesdownstream of our facilities to have availabl a ecapacity forour delivered naturalgas, NGLs, Refined Products andcrude oil, whichmay not be operational; and
• infla f tionary pressure, along withpressure that mayarise from the impositionbythe federalgovernment of tariffso f n non-U.S. produced construc r tionmaterials, could increaseour costsfor f construc r tionmaterials or labor a
As aresult, newfac f ilitiesmay not be able to attract enough naturalgas, NGLs, Refined Products andcrude oilto achieve our expected investment return, which could affectadverselyour business, results of operations,fin f ancialpositionand cashflo f ws.
Estimatesof hydrocarbon reservesmay be inaccurate, which couldresult in lower than anticipatedvolumes.
We may not be able to accurately estimate hydrocarbon r reserves andproductionvolumes expected to be delivered to us fora varietyofreasons, including theunavailabi a lity of suffic f iently detailed infor f mationand unanticipated changes in producers’ expected drillingschedul d es.Accordingly, we may not have accurateestimatesoftotal reserves committed toour assets, the anticipated life of such reserves or theexpected volumes to be produced fromthosereserves. In such event, if we areunabl a e to secure additionalsources, then thevolumes that we gather, process, fractionate and transport inthe future couldbe less than anticipated.A decline insuchvolumes could affectadverselyour business, results of operations,fin f ancialpositionand cash flows.
We do not own all of the land on whichour pipelines andfac f ilitiesare located, andwe lease certainfac f ilitiesand equipment, whichcould disrupt ouroperations.
We do not ownall of the landonwhich certain of our pipelines and facilities are located, and we are, therefor f e, subj u ectto the risk of increased costs tomaintainnecessary land use. We obtainthe rights toconstruc r tand operate certain of our pipelines and relatedfaci f litieson landowned by thirdparties and governmentalagencies fora specific periodoftime.Our loss of these
rights, through our inabilitytorenew right-of-way contractsonacceptabl a e terms or increased costs torenew such rights, could affe f ctadverselyour business, results of operations,fin f ancialpositionand cashflo f ws
Measurement adju d stmentsonour pipelinesystems maybe impactedmaterially by changes inestimation, type of commodity andother factors.
Productmeasurementadjustmentsoccuras partofthe normaloperating conditions associated with our assets The quantific f ationand resolutionofmeasurementadjustments arecomplicated by severalfact f ors including: (i) the significant quantities(i.e., thousands) ofmeasurementequipmentthatweuse acrossour systems, (ii) varyingqualitiesofnatur t al gas inthe streamsgathered and processed through our systems and themixed nature of NGLsgathered and fractionated; and (iii) variances in measurementthatare inherent in metering technologies andstandards. Each of thesefact f orsmay contribute to measurementadjustments that mayoccuronour systems, whichcould affectadverselyour business, results of operations, financial position andcashflo f ws
Weface competitionfor f supplyand,asa result, we mayhave signific f ant levelsof excesscapacityonour pipeline, processing,fra f ctionation,terminal and storage assets.
Our pipeline, processing, fractionation, terminal andstorage assets competewith othersimilarassets fornatur t al gas, NGL, Refined Products andcrude oilsupplydelivered to themarkets we serve. As aresultofcompetition, we mayhavesignificant levels of uncontracted or discounted capacity on our assets, which could affectadverselyour business, results of operations, financial position andcashflo f ws
Many of ourassets have been in servicefor f several decades.
Many of our assets aredesigned as long-lived assets.Overtime the ageofthese assets couldresult in increased maintenanceor remediationexpenditures and an increased risk of productreleases and associated costs and liabi a lities. Any significant increase in theseexpenditures, costsor liabi a litiescould affectadverselyour business, results of operations,fin f ancialpositionand cash flows.
Ouroperating cash flowsare derived partially from cash distributions we receive from ourunconsolidated affi f liates.
Ouroperating cashflo f ws arederived partially fromcashdistributions we receive fromour unconsolidated affi f liates, as discussed inNote O of the Notes to Consolidated FinancialStatements inthisAnnual Report. The amount of cashthatour unconsolidated affi f liatescan distributeprincipally depends upon the amount of cashflo f ws these affiliatesgeneratefrom f their respectiveoperations, which mayflu f ctua t te fromquarter to quarter.Wemay be unable tounilaterally determine the cash distribution policiesofour unconsolidated affi f liates. This maycontribute tousnot having sufficientavailabl a ecasheachquarter to continue paying dividends at thecurrent levels
We maybeunabletocause our joint ventures to take or nottotakecertainactions unlesssomeorall of our jointventureparticipantsagree.
We participate inseveraljointventures. Due to the nature of some of these arrangements, eachparticipant inthese joint ventur t es hasmadesubstantial investments inthe jointventure and, accordingly, hasrequired thatthe relevant charter documents containcertain featur t es designed to provide eachparticipantwith theopportunity to participate inthe management of thejoint ventur t e and to protect its investment, aswellas any otherassets that may besubstantially dependent on or otherwise affe f cted by the activities of thatjointventure. These participationand protectivefeat f tures customarily include a corpor r ate governance structur t e thatrequires at leasta majo a rity-in-interest vote to authorizemany basic activities and requires a greater voting interest (sometimesupt u o 100%) to authorizemoresignificantactivities. Examples of thesemoresignificantactivities are large expendituresorcontractua t lcommitments, theconstruc r tionoracquisitionofassets,borrowing moneyorotherwise raising capital, transactions with affi f liatesofa joint-ventur t eparticipant, litigationand transactions not in theordinaryc r ourse of business, among others Thus, without theconcurrenceofjoint-venture participants with enough voting interests, wemay be unable tocause anyofour jointventures to takeornot to take certainactions,eventhough those actions may be inthe best interest of us or theparticular joint ventur t e.
Moreover, subj u ect to contractua t lrestrictions, any joint-ventur t eowner generally may sell, transfer f or otherwisemodify its ownershipinterest ina jointventure, whether in a transaction involving thirdpartiesorthe other joint-venture owners.Any such transactioncouldresult inour beingrequired to partner with different or additional partieswho mayhavebusiness interestsdiffe f rent fromours.
We do not operate all of our joint-venture assets nor doweemploydirectly all of the personsresponsible forproviding administrative,operating andmanagement services. Thisrelianceonothers to operate joint-venture assets andto provide otherservicescould affe f ct adverselyour businessand results of operations.
We rely on others to provide administrative, operating andmanagementservices forcertain of our joint-ventur t e assets.We have a limitedabi a litytocontrolthe operations and the associated costsofsuchoperations The successofthese operations depends on anumberoffac f tors that areoutside our control, including thecompetence and financialresources of theoperatoror an outsourced serviceprovider. We mayhave tocontract elsewherefor f outsourced services, which maycostmore thanwe are currently paying In addition, we may not be able to obtainthe same levelor kindofservice or retain or receive theservices in a timely manner, whichmay impact our ability to perform underour contracts and affe f ctadverselyour business and resultsof operations
Ourability to usenet operating lossesand certainother tax attributes to offs f et future taxable income maybe limited.
We currently have subs u tantialU.S.fed f eral netoperating loss (NOL) carry forward and otherstate tax attributes.Our abilityto use these tax attributes to reduceour future U.S. federaland state income tax obligations depends on many factors, including our future taxable income, the timing ofwhich is uncertain Inaddition, our ability to use NOL carryforwards andother tax attributes may besubjectto limitations underSection382 of the Internal Revenue Code of 1986, as amended (the “Code”) and corresponding provisions of state law
UnderSection382 of the Code andcorresponding provisions of state law, ifa corporationundergoes anownership change, which isgenerally defined as a greater than 50 percentchange in its equity ownershipovera three-year period, thecompany’s abilitytoutilize U.S NOL carryforwards andother tax attributes may be limited. We believe our historical U.S. NOL carryforwards andother tax attributes arenot currently subj u ect to a limitationas a result of an ownershipchange However, it is possible thatanownership change mayoccur inthe future, which may materially impact our ability to useour U.S. NOL carryforwards andother tax attributes to reduce U.S.fed f eral andstate taxable income. Such limitationcould affectadversely our results of operations,fin f ancialpositionand cashflo f ws The historicalEnLinkNOL carryforward acquiredupon u the completionofthe EnLink Acquisition isexpected to be subj u ect to limitations underSection382 of the Code
RISK FACTORS RELATED TO REGULATION
Increasedregulationof exploration and productionactivities, including hydraulic fracturing, well setbacksand disposal of wastewater, couldresult inreductionsor delays in drilling andcompletingnew crude oil and naturalgas wells.
Thecrude oiland naturalgas industriesrelyonsuppliesfro f mnonconventionalsources,suchasshale and tight sands.Crudeoil andnatur t al gasextracted fromthese sources frequently requires hydraulic fractur t ing, which involves the pressurized injection of water, sand andchemicals into a geologicfor f mationtostimulatecrude oiland naturalgas production. Legislationor regulations placing restrictions on explorationand productionactivities, including hydraulic fractur t ing and disposal of wastewater, couldresult inoperationaldelays, increasedoperating costs and additionalregulatoryb r urdens on explorationand production operators. Anyofthese factorscouldreduc d e their productionofcrude oiland unprocessednatur t al gas and, in turn, affe f ctadverselyour revenues and results of operations by decreasing thevolumes of crude r oil, naturalgas and NGLsgathered, treated, processed, fractionated, stored and transported on our or our jointventures’ assets.
Our business issubjecttoregulatoryoversight and potential penalties.
Theenergyindustryi r ssubject to heavy state andfed f eral regulationthatextends to many aspectsofour businesses and operations, including:
•changes tofed f eral,state and local taxation;
•regulatorya r approvaland review of certain of our rates, operating terms andconditions of service;
•the typesofservices we mayofferour counterpa r rties;
•construc r tion andoperation of newfaci f lities, andmodifications andoperationofexistingfaci f lities;
•the integrity,safet f yand security of facilities and operations;
•acquisition, extensionoraba a ndonmentofservicesorfaci f lities;
•reporting and information posting requirements;
•maintenance of accounts and records; and
•relationships with affi f liatecompanies involved inallaspectsofour business.
Compliancewith theserequirementscan be costly andburdensome. Future changes to laws, regulations andpolicies inthese areasmay impair ourabi a litytocompete forbusinessortorecovercosts andmay increase the cost andburdenofour operations We cannot guarantee that stateorfed f eral regulatorswill not challenge our safety practices or willauthorize any projects or acquisitions that we maypropose inthe future Moreover, therecan be no guarantee that, ifgranted, any suchauthorizations will be made in a timely manneror will be freefro f m potentially burdensomeconditions
Underthe NaturalGas Act, which isappl a icable to our interstate naturalgas pipelines, and the Interstate CommerceAct, which is applicable to our interstate Refined Products, crude oiland NGLpipelines, our interstate transportationrates areregulated by theFERC and many changes toour pipeline tariffs f must be approved ina regulatoryp r roceeding. Additionally,shippers, the FERC and/or stateregulatorya r genciesmay investigateour tariff rateswhich couldresult in, among otherthings, our being ordered toreduc d erates or make refunds to shippers
Failure to comply with allappl a icable stateorfed f eral statut t es,rul r es andregulations andorderscouldbring subs u tantial penalties andfin f es
Rate regulation,challenges by shippers of therates we charge for transportationonour pipelines or changes inthe jurisdictional characterization of ourassets or activities by federal, stateorlocal regulatoryagenciesmay reducethe amount of cash we generate.
TheFERCregulates therates we can charge and the terms and conditions we can offe f rfor f interstate transportationservice on our pipelines.State regulatorya r uthoritiesregulate the rateswecan charge and the terms and conditions we can offe f rfor f intrastate movementsonour pipelines. The determinationofthe interstate or intrastate character of shipmentsonour pipelines maychange overtime, which maychange theregulatoryf r framework and the rateswe are allowed tochargefor f transportation andother relatedservices.Shippers mayprotest our pipeline tarifff f filings, and theFERC orstate regulatorya r uthorities may investigate and require changes to tarifft f erms as aresultofthe protests or complaints.Further, the FERC mayorder refunds of amountscollected under interstaterates that aredetermined tobe inexcessofa just andreasonable level.State regulatory authoritiescould takesimilarmeasuresfor f intrastate tariffs Inaddition, shippers maychallenge by complaintthe lawful f ness of tariff rates that havebecomefin f al andeffective. If existing rates are determined to be in excessofa just andreasonable level, we couldberequired to pay refunds to shippers,reduc d erates andmakeother concessions
TheFERC’sratemaking methodologies maylimit our abilityto increaserates by amountssuffi f cienttorefle f ct our actual cost or maydelay theuse of rates thatrefle f ct increased costs. TheFERC’s indexing methodology is basedonchanges inthe producer price indexfor f finished goods combined with an index adjustment.The methodology is subj u ect to review everyf r five years and currently allows apipeline tochange its rateseachyear to anew ceiling level.Whenthe change in theceiling level is negative, we are generally required toreduc d eour rates thatare subj u ect to theFERC’s indexing methodology Theresults of FERC’s last five-year review were subj u ecttoappe a al at theD.C.Circuit, which vacated FERC’sorders and remanded toFERC. FERC subs u equently issued a supplementalnoticeof proposed rulemaking proposing toreduc d e the indexprice back downto the rehearing order price and theproposal is now pending atFERC.
TheFERC and most relevant stateregulatorya r uthorities allowus toestablishrates basedonconditions in competitivemarkets without regard to theFERC’s indexlevel or our cost-of-service. The tariffs f on most of our long-haul crude r oil pipelines are at negotiatedrates but arestill subj u ect to regulationbythe FERC or state agencies and subj u ect to protestby shippers Ifwewere to lose our market-based rate authority, or ifour negotiatedrates were determined to not be just andreasonable, we couldbe required toestablishrates on some otherbasis,suchasour cost-of-service. Establ a ishing our rates througha cost-of-s f ervice filing couldbeexpensive andcouldresult intariffr f educ d tions, which would adverselyaffect our business.
Ourliquids blending activities subject ustofed f eral regulations that govern renewable fuel requirements in theU.S.
The EnergyIndependence and Security Actof2007 expanded the requireduse of renewabl a efue f ls in the U.S Eachyear, the United States Environmental ProtectionAgency(EPA) establ a ishes aRenewabl a e Volume Obligation(RVO) requirement for refiners and fuel manufac f turers basedonoverallquotas establ a ishedbythe federalgovernment.By virtueofour liquids blending activity andresultinggasolineproduction, we are anobligated partyand receive an annualRVO R fromthe EPA. We typically purchaserenewable energy credits, called RINs, to meet this obligation. Increases in thecostordecreases in the availabi a lity of RINs could have anadverse impact on our business.
We mayfac f esignificant coststocomply withthe regulation of GHG emissions.
GHG emissions in themidstream industryo r riginate primarilyfro f mcombustionengine exhaust, heater exhaustand fugitive methane gas emissions International, federal, regionaland/or state legislative and/or regulatoryi r nitiatives mayattempt to
controlor limit GHGemissions, including initiatives directed at issues associated with climate change.Various federaland state legislativeproposals havebeen introduced to regulate the emission of GHGs, particularly carbon dioxide andmethane, and the United StatesSupreme Court has ruled thatcarbon r dioxide is apollutant subj u ect to regulationbythe EPA. In addition, there have been internationaleffortsseeking legally binding reductions in emissions of GHGs
We believe it is likely that future governmental legislationand/or regulationonthe federal, state and regionallevels, may furtherrequire us to limitGHG emissions associated with our operations, pay additionalfees f associated with our GHG emissions or purchase allowances forsuchemissions.For example, the Infla f tion Reduc d tionAct of 2022 (IRA) R directs the EPA to impose andcollectpaymentof “Waste Emissions Charges,”or “MethaneFees,” forspecificfaci f lities thatreportmore than 25,000 metric tons of carbon dioxide equivalent of GHG emissions peryear and havemethane emissions intensity in excessof therelevantstatutory threshold. Basedontext inthe IRAand arelated rule that the EPA finalized in November 2024 to implement the Methane Feeprogram, weexpect to begin paying Methane Fees in 2025 (for2024 reportedemissions)for f applicable facilities. In January 2025, industrya r ssociations andcertain states challenged the Waste Emissions Charge rule in theD.C.Circuit, and the new administration issued an executiveorder directing the headsofall federalagencies to identifya f nd beginthe processes tosuspend, revise or rescind allagency actions that areunduly burdensomeonthe identific f ation, developmentoruse of domesticenergy resources.Consequently,fut f ture implementationand enforcementofthese rulesremain uncertain at this time Methane Fees, ifimplemented, and other legislative and/or regulatoryi r nitiatives couldmakesomeofour activitiesuneconomic to maintain or operate However, wecannotpredict precisely what form thesefut f ture legislative and/or regulatoryi r nitiatives will take, the stringencyofsuch initiatives, whentheywill become effe f ctiveorthe impact on our capi a tal expenditures, competitivepositionand results of operations.Further, wemay not be able to pass on the highercosts to our customersorrecover allcosts related tocomplying with GHG legislative and/or regulatoryr r equirements. Ourfut f tureresults of operations,fin f ancialpositionorcashflo f ws couldbe affected adverselyifsuchcosts arenot recoveredorotherwise passedonto our customers.
Ouroperationsare subject to federal andstate laws andregulations relatingtothe protectionofpublic health and safetyand theenvironment, which mayexposeustosignificant costsand liabilities.Increased litigationand activism challengingcontinuedrelianceuponoil and gas as well as changestoand/or increased penalties from theenfor f cement of laws,regulations and policiescould impact adverselyour business.
Theriskofincurring subs u tantialenvironmentalcosts and liabi a lities is inherent in our business. Ouroperations aresubject to extensivefed f eral,state and local laws andregulations relating to the protectionofthe environment. Examples of these laws include the:
•Federal CleanAir Act, as amended, and analogous state laws that imposeobligations related to air emissions;
•Federal Water PollutionControlAct Amendments of 1972, as amended, and analogous state laws that impose requirementsrelated to activities in and around certainstate andfed f eral waters, including requirementsrelated to dischargeofwastewaterfro f mour facilities intostate andfed f eral waters anddischarge of dredge andfill f materials, suchas dirt andother earthy materials, into waters of the United States;
•Comprehensive Environmental Response, Compensation and Liabi a lity Act, as amended (CERCLA), and analogous state laws thatregulate the cleanup of hazardous subs u tances that mayhavebeen released atpropertiescurrently or previously ownedoroperatedbyusor locations to whichwe havesentwaste fordisposal;
• Endangered Species Actof 1973 and analogous state laws that imposeobligations related to protectionofthreatened andendangeredspecies; and
• Resource Conservation and Recovery Act, as amended (RCRA), and analogous state laws that imposerequirements forthe handling and dischargeofsolid and hazardous wastefro f mour facilities.
Various federaland state governmentalauthorities, including the EPA, have the power to enforcecompliancewith these laws andregulations and the permits issued underthem. Violators are subj u ect to administrative, civiland criminalpenalties, including civilfin f es, injunctions or both. Jointand several, strict liabi a lity may be incurredwithout regard to faultunder CERCLA, RCRAa R nd analogous state lawsfor f theremediationofcontaminated areas.
There is an inherent risk of incurringenvironmentalcosts and liabi a lities inour businessdue d to our handling ofthe products we gather, transport, process and store; airemissions related toour operations; past industryo r perations andwaste disposal practices,someofwhich may bematerial. Privateparties, including theownersof properties through whichour pipeline systems pass, mayhave the right to pursue legalactions to enforcecompliance aswellas toseek damagesfor f noncompliance with environmental laws and regulations or for personal injuryo r r propertydamage arising fromour current or historical operations.Somesites we operate are located near current or former third-partyhydrocarbon r storage and processing operations, and there is a risk that contamination has migrated from thosesites toours. In addition, increasingly strict laws, regulations andenfor f cement policiescould increasesignificantly our compliancecosts, penalties and othercostassociated with
anyallegednoncompliance, and the cost of any remediationthatmay become necessary;someofthese costscouldbematerial andcould adverselyaffect our business, results of operation, financial positionand cashflo f ws.Our insurancemay not coverall of theseenvironmentalrisks, and there are also limits on coverage.Additional infor f mation is includedunder Item 1,Business, under “Regulatory, r Environmentaland Safety Matters”and in Note P ofthe Notes toConsolidated FinancialStatements inthis AnnualReport.
Increased litigationand activismchallenging oiland gasdevelopmentaswellaschanges to and/or more aggressive enforcementoflaws, regulations andpoliciescould impactour business. These actions could, among otherthings, impactour customers’ activities, our existing permits, our abilitytoobtain permits fornew development proje o cts and public perception of our company, whichcould affectadverselyour business, resultsofoperations,fin f ancialpositionorcashflo f ws
RISK FACTORS RELATED TO FINANCING OUR BUSINESS
Changes in interestrates could affect adverselyour business.
We usebothfix f ed and variable rate debt, and we areexposed to market risk due to theflo f ating interestrates on our short-term borrowings.Our resultsofoperations,fin f ancialposition andcashflo f ws couldbe affected adversely by significantflu f ctua t tions in interest rates.
Anyreduction in ourcredit ratingscould affe f ct adverselyour business, results of operations, financialpositionand cash flows.
Our long-term debt hasbeenassigned an investment-grade credit rating of “Baa2”byMoody’s and “BBB”by bothS&P and Fitch. Ourcommercial paper program hasbeen assigned an investment-grade credit rating ofPrime-2,A-2 andF2 byMoody’s, S&P and Fitch, respectively We cannotprovide assurance thatany of our current ratings will remain in effe f ct forany given period of timeorthata rating will not be loweredorwithdrawnentirely bythese credit rating agencies. If these agencieswere to downgradeour long-term debt or our commercial paper rating,particularly below investment grade, our borrowing costs could increase, whichwould affectadverselyour financialresults, and our potential pool of investors and funding sourcescould decrease Ratings fromthese agencies arenot recommendations to buy, sell or holdour securities. Each ratingshouldbe evaluated independently of anyother rating.
Ourindebtedness and guarantee obligations could impairour financial condition andour abilitytoful f fill our obligations.
As of Dec. 31, 2024, we had total indebtedness of $33.2 billion. Our indebtedness and guarantee obligations could have significantconsequences.For example, they could:
•make itmorediffi f cult forus tosatisfy our obligations with respect to senior notes andother indebtedness due to the increased debt-service obligations, which could, in turn,result inanevent of defaultonsuchother indebtedness or the senior notes;
• impairour ability to obtainadditionalfin f ancing in thefut f turefor f working capital, capitalexpenditures, acquisitions or generalbusiness purpos r es;
•diminishour ability to withstand a downtur t n inour businessorthe economy;
•require us to dedicate a subs u tantial portionofour cashflowsfro f moperations to debt-service payments,reduc d ing the availabi a lityofcashfor f working capital, capi a talexpenditures, acquisitions, dividends or generalcorpor r atepurpos r es;
• limitour flexibilityin planning for, or reacting to, changes inour business and the industryi r nwhich we operate; and
• place us ata competitivedisadvantagecomparedwithour competitors that have proportionately less debt andfew f er guarantee obligations
We arenotprohibitedunderthe indentur t es governing the senior notes from incurring additional indebtedness, but our debt agreements do subj u ectus tocertain operational limitations that couldrestrictour ability to financefut f tureoperations or expand or pursuebusiness activities, assummarized in thenext paragraph. a If we incursignificantadditional indebtedness, it could worsen thenegativeconsequences mentionedabove a andcould affectadverselyour ability to repayour other indebtedness.
Our $3.5 Billion Credit Agreementcontains provisions that, among otherthings, limitour ability to make material changes to thenatur t eofour business, merge, consolidateordisposeofall or subs u tantially allofour assets,grant liens andsecurity interests on our assets,engage in transactions with affi f liatesormakerestrictedpayments, including dividends Italsorequiresus to maintain certain financialratios, which limit the amount of additional indebtedness we can incur, as described inthe “Liquidity and Capital Resources” sectionof Part II, Item 7, Management’s Discussion andAnalysisofFinancial Conditionand Results of
Operations, inthisAnnual Report. Theserestrictions couldresult in highercosts of borrowing and impairour ability to generate additionalcash. Future financing agreements we may enter into maycontainsimilarormorerestrictivecovenants
If we areunabl a e tomeetour debt-service obligations or comply withfinancialcovenants, we couldbefor f ced to restructur t eor refinanceour indebtedness, seekadditionalequity capitalorsellassets.Wemay be unable toobtainfin f ancing or sellassets on satisfactoryt r erms, oratall
An event of defau f lt mayrequire us to offe f r torepurchasecertainof our andONEOK Partners’ seniornotes or may impair ourabilitytoaccesscapital.
The indentur t es governing certain of our and ONEOKPartners’ seniornotes include an eventof defau f lt upon the accelerationof other indebtedness of $15 millionormorefor f certain of our senior notes or $100 millionormorefor f certain of our and ONEOK Partners’ seniornotes.Sucheventsof defau f lt wouldentitle the trus r teeorthe holders of 25% in aggregateprincipal amount of our and ONEOKPartners’ outstanding senior notes to declare thoseseniornotes immediatelydue d andpayable in full We may not have sufficientcashon hand torepurchase and repayany accelerated senior notes, which maycause us to borrow funds underour credit facilityorseekalternativefin f ancing sources tofin f ance therepurchases andrepayment.Wecould alsofac f e difficulties accessing capi a talorour borrowing costscould increase, impacting our ability to obtainfin f ancing foracquisitions or capi a talexpenditures, to refinance indebtedness and toful f fill our debt obligations
Theright to receivepaymentsonour outstanding debt securities andsubsidiary guarantees is unsecured andwill be effe f ctivelysubordinated to anyfut f uresecured indebtedness as well as to anyexistingand future indebtedness of our subsidiaries that do notguarantee theseniornotes.
Although ONEOKPartners, the Intermediate Partnership,Magellan, EnLinkand EnLinkPartners have guaranteed our debt securities, the guarantees aresubje b ct to releaseundercertain circumstances, and we have subs u idiaries that arenot guarantors. In thosecases, the debt securitieseffectivelyare subor u dinated to the claims of allcreditors, including tradecreditors and tort claimants, of our subs u idiaries that arenot guarantors Inthe eventofthe insolvency,bankrupt r cy, liquidation, reorganization, dissolutionorwinding up of thebusinessofa subs u idiary that is nota guarantor, creditors of that subs u idiary would generally have theright to be paid in full before anydistribution ismade tousorthe holders of thedebtsecurities.
Acourt may use fraudulent conveyance considerationstoavoidorsubordinatethe cross guarantees of ourand ONEOK Partners’indebtedness.
ONEOK, ONEOKPartners, the Intermediate Partnership,Magellan, EnLink and EnLink Partners havecross guarantees in place forour and ONEOKPartners’indebtedness. Acourtmay usefra f udulentconveyance laws tosubordinate or avoid the crossguaranteesofcertain of this indebtedness. It is also possible thatundercertain circumstances, a courtcould avoidor subor u dinate the guarantor’s guarantee of this indebtedness in favor of the guarantor’s otherdebts or liabi a lities to the extent that thecourtdetermined either of thefol f lowing were true r at the time the guarantor issued the guarantee:
•the guarantor incurred the guarantee with the intentto hinder, delayordefra f ud anyofits presentorfut f turecreditors or the guarantor contemplated insolvency witha designtofav f or one or more creditors to the total or partialexclusion of others; or
•the guarantor didnot receivefai f rconsiderationorreasonableequivalentvalue for issuing the guarantee and, at the time it issued the guarantee, the guarantor:
–was insolventorrendered insolvent by reason of the issuance of the guarantee;
–was engagedorabout a to engage in a businessortransaction forwhich its remaining assets constitut t ed unreasonably small capital; or – intended to incur, orbelieved that itwould incur, debts beyond its ability to pay suchdebts as they matured.
Themeasureofinsolvencyfor f purpos r es of thefor f egoing will vary depending upon the law of therelevant jurisdiction. Generally, however, anentitywouldbeconsidered insolventfor f purpos r es of thefor f egoing if: f
•the sumofits debts, including contingent liabi a lities, were greater than thefai f rsaleable valueofall of its assets at afai f r valuation;
•the presentfai f rsaleabl a evalue of its assets was less thanthe amount that wouldberequired to pay its probabl a e liabi a lity on its existing debts, including contingent liabi a lities, as they become absolute andmatur t e; or
• itcouldnotpayits debts as they become due.
Among otherthings, a legal challenge of thecross guaranteesofour and ONEOKPartners’indebtedness on fraudulent conveyance grounds mayfoc f us on thebenefits f , ifany, realized by the guarantor as aresultofthe issuance of such debt.To the
extent the guarantor’s guarantee of any such indebtedness is avoided as a result of fraudulentconveyanceor heldunenfor f ceabl a e forany otherreason, the holders of such debt wouldcease to have any claim inrespect of the guarantee
GENERAL RISK FACTORS
Mergers and acquisitionsthatappear tobeaccretive maynevertheless reduceour cash from operationsona per-share basis.
Any mergeroracquisition involves potentialrisks that mayinclude, among otherthings:
• inaccurate assumptions about volumes,revenues and costs, including potentialsynergies;
•an inabi a lity to integratesuccessful f ly thebusinesseswe acquire;
•decrease inour liquidity as aresultofour using a significant portionofour availabl a ecashorborrowing capa a city to finance the acquisition;
•a significant increase inour interest expense and/or financial leverage ifwe incur additionaldebttofin f ance the acquisition;
•the assumptionofunknown liabi a litiesfor f whichwe are not indemnifie f d, our indemnity is inadequate or our insurance policiesmay exclude fromcoverage;
•an inabi a lity to hire, train or retain qualifie f dpersonneltomanage and operate the acquiredbusiness and assets;
• limitations on rights to indemnityfro f mthe seller;
• inaccurate assumptions about theoverall costsofequity or debt;
•the diversionofmanagement’s and employees’ attentionfro f mother businessconcerns;
•unfor f eseen difficultiesoperating in newproductareas or new geographic areas;
• increased regulatoryb r urdens; and
•customeror key employee losses atanacquiredbusiness.
If we consummate anyfut f turemergers or acquisitions, our capi a talizationand results of operations maychange significantly, and investorswillnot have theopportunity to evaluate theeconomic,fin f ancial andother relevant informationthatwewill consider in determining the applicationofour resources to future acquisitions.
We maybeunableto integrate thebusinessesof EnLink and Medallionsuccessful f ly or realizethe anticipatedbenefit f sof theEnLinkAcquisitionsand the MedallionAcquisition (collectively, the “RecentAcquisitions”).
Thesuccessofthe RecentAcquisitions will depend, in part, onour ability to realize the anticipated benefits fromcombining the businessesofONEOK, EnLink and Medallion. If thebusinesses are not successful f ly combined, the anticipated benefits of the Recent Acquisitions may not be realized fully or at allormay take longertorealize thanexpected Inaddition, the integration may result inadditionaland unfor f eseen expenses andpotentialunknown liabi a lities, whichcouldreduc d e the anticipated benefits of the Recent Acquisitions It is possible thatthe integration processcouldresult inthe loss of key employees, aswellas the disrup r tionofour ongoing businessesor inconsistencies inour standards, controls, procedur d es andpolicies. Anyorall of those occurrences could affectadverselythe combined company’sabi a lity to maintain relationships with customers and employees afte f rthe Recent Acquisitions or to achieve the anticipated benefits of the RecentAcquisitions. Integrationeffortsbetween the threecompanies will also divert management attentionand resources These integrationmatters could have anadverseeffect on our business, resultsofoperations,fin f ancialposition andcashflo f ws.
Following the EnLinkControlling Interest Acquisition, we beganto integrate certain aspectsof EnLink’sbusiness and operations with ours, butEnLink hascontinued tooperate as a separatepublic company In connectionwith thecompletionof the EnLinkAcquisition, EnLink ceased to operate as a separatepublic company, andwebegan full integrationwith our business This integration process isexpected to be subj u ect to some or allofthe afor f ementionedchallengesmanyofwhich may be more complex as a result of having to fully integrate the EnLink business. Further, this integration processmay pose additionaldiffi f culties inherent with fully integrating the EnLink business and thediscontinuationofits operationas a separate public company. If we areunabl a e tosuccessful f ly executeour integrationstrategy, we may beunabl a e torealizesomeorall of the anticipated benefits of the EnLinkAcquisitionwhich couldmaterially and adverselyaffect our business, results of operations,fin f ancialposition andcashflo f ws.
Ourfut f ureresults followingthe closingof the Recent Acquisitionsand anypotentialfuture transactions will sufferif we do not effectivelymanageour expandedoperations.
Following theclosing of the RecentAcquisitions, the size of our business has increased andwill increasefur f ther if we complete anypotentialfut f ture transactions.Our future successwill depend, in part,upon u our ability to manage this expandedbusiness,
whichmay posechallengesfor f management, including challengesrelated to themanagementand monitoring of newoperations and associated increasedcosts andcomplexity.Wemay also face increased scrutinyfro f mgovernmentalauthorities and/or otherthird parties as a result of the increase inthe size of our business. Therecan be no assurances that we will be successful f or that we will realize the expected operatingefficiencies, costsavings,revenue enhancements or otherbenefits f anticipated from the Recent Acquisitions and any potentialfut f ture transactions.
Holders of ourcommonstock mayreceive dividends that varyfro f manticipated amounts, or no dividends at all.
We may not have sufficientcasheachquarter to paydividends or maintain current or expected levels of dividends The actual amount of cashwepay in thefor f mof dividends mayflu f ctua t te fromquarter to quarter andwill depend on various factors, some of whichare beyond our control, including our working capital needs, our ability to borrow, therestrictions contained inour indentur t es andcreditfac f ility, our debt-service requirements and thecostofacquisitions, ifany Afai f lure either to pay dividends or to paydividends at expected levels couldresult ina loss of investor confid f ence, reputationaldamage and a decrease inthe valueofour stock price.
We areexposed to thecreditrisk of our customersorcounterparties, andour credit risk management maynot be adequate to protectagainst suchrisk.
We aresubject to theriskoflossresultingfro f mnonpaymentand/or nonperformance by our customers and counterpa r rties. Our customersorcounterparties may experience rapi a ddeteriorationoftheir financialconditionas a result of changing market conditions, commodity prices or financialdiffi f culties thatcould impact theircreditworthinessorabi a lity to payusfor f our services.We assess thecreditworthinessofour customers and counterpa r rties and obtaincollateralorcontractua t lterms as we deem appropriate.Wecannot, however, predict to what extent our businessmay be impacted by deterioratingmarketor financialconditions, including possibledeclines in our customers’ andcounterpa r rties’ creditworthiness. Ourcustomers and counterpa r rtiesmay notperform or adhere to our existing or future contractua t larrangements. To theextentour customers and counterpa r rties are in financialdistressorcommencebankrupt r cy proceedings, contractswith them may besubject to renegotiation or reje e ctionunderappl a icable provisions of the United StatesBankrupt r cy Code Ifour risk-management policies andprocedur d es fail to assess adequately thecreditworthinessofexisting orfut f turecustomers andcounterpa r rties, any material nonpaymentornonperformance by our customers and counterpa r rtiesdue d to inability or unwillingness to perform or adhere to contractua t larrangementscould affectadverselyour business, results of operations,fin f ancialpositionand cashflo f ws.
Ourcounterpa r rties are primarily major integrated and independent explorationand production, pipeline, marketing and petrochemical companies and naturalgas andelectricutilities Therefore, our counterpa r rtiesmay be similarlyaffected by changes ineconomic,regulatoryo r rother factors thatmay affe f ct our overall credit risk.
Our businessrequires theretention andrecruitment of askilled executive team andworkfor f ce, anddiffi f culties recruitingand retaining executivesand otherkey personnel could impair ourabilitytodevelop and implement our businessstrategy.A shortage of skilled labor maymake it diffi f cult forustomaintain labor productivity and competitivecosts.
Oursuccessdepends in part on theperformance of andour abilityto attract,retainand effe f ctively manage the succession of a skilled executive team.Wedependonour executiveoffic f ers todevelop andexecute our businessstrategy. If we arenot successful f in retaining our executiveofficers, or replacing them, our business, financialconditionorresults of operations could be adverselyaffect f ed.
In addition, our operations require theretention andrecruitment of skilled and experienced workerswithprofic f iencyinmultiple tasks. In recentyears, a shortage of workers trained in various skills associated with themidstream energy business has, at times, causedus toconductcertain operations without full staff, f thus hiring outside resources, which maydecreaseproductivity and increasecosts Thisshortage of trainedworkers is theresultofexperienced workersreachingretirementage and increased competition forworkers in certain areas, combinedwiththe challengesofattractingnew,qualifie f dworkers to themidstream energy industry. r If theshortage of experienced labor a continuesorworsens, itcould affectadverselyour labor a productivity and costs and our ability to expand operations in theevent there is an increase inthe demand forour services andproducts, which could affectadverselyour business, results of operations,fin f ancialpositionand cashflo f ws
Ouremployees or directorsmay engage inmisconduct orother improper activities, including noncompliancewith regulatorystandardsand requirements.
As with allcompanies, we are exposed to theriskofemployeefra f ud or othermisconduct. OurBoard of Directors has adopted a code of businessconductand ethics thatapplies toour directors, offi f cers(including our principalexecutive and financial
offi f cers, principalaccounting offic f er, controllers andother persons performingsimilarfunc f tions) and allother employees.We require alldirectors, offi f cers andemployees to adhere to our code of businessconductand ethics in addressing the legal and ethical issues encountered in conducting their work forour company Ourcode of businessconductand ethics requires, among otherthings, thatour directors, offi f cers and employees avoidconflicts of interest, complywith allappl a icable laws andother legalrequirements, conductbusiness inan honest andethical mannerand otherwise act with integrity and inour company’s best interest.All directors, offi f cers and employees arerequired toreportany conductthatthey believe to be an actual or apparent violationofour code of businessconductand ethics However, it isnot always possible to identifya f nd deter misconduct, and the precautions we take to detect andprevent this activity may not be effe f ctive incontrolling unknownor unmanagedrisks or lossesor in protecting usfro f mgovernmental investigations or otheractions or lawsuits stemmingfrom f a failure to comply with such laws or regulations Ifany suchactions are instituted against us, and we arenot successful f in defending ourselves or asserting our rights, those actions could affectadverselyour reputation, business, results of operations, financial positionand cashflo f ws
Animpairment of goodwill, long-lived assets, including intangible assets,and equity-method investmentscould reduce ourearnings.
Goodwill is recorded when thepurchaseprice of a businessexceeds thefai f rmarketvalue of the tangible and separately measurable intangible netassets.GAAP requiresus to testgoodwill for impairmentonanannualbasis or when events or circumstances occur indicating thatgoodwill might be impaired. Long-lived assets, including intangible assets withfinite useful f lives, are reviewed for impairmentwhenevereventsorchanges incircumstances indicate thatthe carrying amount may not be recoverabl a e. Forthe investmentswe account forunderthe equity method, the impairmenttestconsiderswhether thefai f r valueofthe equity investment as a whole, not theunderlying netassets, has declined andwhether that decline isother than temporary. r Forexample, ifa lowcommodity priceenvironment persisted fora prolongedperiod, it couldresult in lower volumes delivered to oursystems and impairments of our assets or equity-method investments. If we determine thatan impairment is indicated, wewouldberequired to take an immediate noncashcharge toearnings witha correlativeeffect on equity andbalance sheet leverage asmeasured by consolidated debt to totalcapitalization.
Forfur f ther discussion of impairmentsoflong-lived assets,goodwill andequity-method investments, see Notes A, F, G, and O, respectively, of the Notes to Consolidated FinancialStatements inthisAnnual Report.
Thecost ofproviding pensionand postretirementhealthcarebenefit f stoeligible employees andqualifie f dretirees is subjecttochanges in pensionfun f dvaluesand changing demographics and may increase.
We have definedbenefit f pension plans forcertain employees andfor f meremployees, which areclosed tonew participants, and postretirementwelfare plans that provide postretirementmedical and lifei f nsurance benefits to certain employees The cost of providing thesebenefit f s toeligiblecurrent andfor f meremployees is subj u ect to changes inthe market valueofour pensionand postretirementbenefit f plan assets, changing demographics, including longer lifee f xpectancy of plan participants and their beneficiaries and changes in health carecosts.For furtherdiscussionofour definedbenefit f pension planand postretirement welfar f eplans,see Note M ofthe Notes toConsolidated FinancialStatements inthisAnnual Report.
Any sustained declines in equity markets and reductions in bond yields mayaffectadverselythe valueofour pensionand postretirementbenefit f plan assets. Inthese circumstances, additionalcashcontributions to our pension plans may berequired, whichcould affectadverselyour business, financialconditionand cashflo f ws
If we failto maintain an effe f ctivesystemofinternal controls, wemay not beabletoreportaccurately ourfin f ancial results or preventfra f ud.Asa result, currentand potential holders of ourequity anddebt securities could lose confid f ence in ourfin f ancial reporting.
Effe f ctive internalcontrols arenecessary forus to provide reliable financialreports, prevent fraud andoperate successful f ly as a public company. We cannotbecertain that our effo f rts tomaintainour internal controls will be successful f , thatwewillbeabl a e to maintain adequate controls overour financial processes andreporting inthe future or that we will be able to continue to comply with our obligations underSection404 of the Sarba r nes-Oxley Act of 2002. Anyfai f lure to maintain effe f ctive internal controls, ordiffi f culties encountered in implementing or improving our internal controls, could harmour operatingresults or cause us to fail to meet our reporting obligations. Ineffective internalcontrols could alsocause investors to loseconfidence in our reportedfin f ancial information, whichwould likelyhave a negativeeffect on the trading priceofour equity, our access to capitalmarkets and the cost of capi a tal.
Notappl a icable
ITEM 1C.CYBERSECURITY
RiskManagement andStrategy -We take a cross-disciplinarya r approach to cybersecurity andphysical security.Our annual Enterprise RiskManagement (ERM)processencompasses the identific f ationand assessmentofa broadrange of risks, including cybersecurity, and thedevelopmentand testing ofcontrols to mitigate these risks. Our ERMassessment isdesigned toenabl a e our BoardofDirectors to establ a isha mutual understanding with management of theeffectivenessofour risk-management practices andcapabilities, to review our risk exposures and toelevate certain key risks fordiscussion at theboard level. Our ERMprogram is overseenbyour chieffin f ancial offi f cer.
Ourcybersecurity risk management program is integrated with our ERMprogram andsharescommonmethodologies,reporting channels and governance processes thatappl a yacross the ERMprogram to other legal compliance, strategic, operationaland financialriskareas.Our security program generallyincorpor r ates the guidelinesofthe widely utilized National Institut t eof Standards and Technology Cybersecurity Framework, though this doesnot imply we meet anyparticular technical standards, specifications or requirements. In addition, we conductriskassessments of enterprise third-party softw f are and cloud vendors by utilizingsecurity questionnaires priorto procurement.Ona regular basis, we engage consultants, including external counsel andcybersecurity firms, to conduct penetrationtests and architectur t edesignreviews
As of thedateofthisreport, though the Company and third parties haveexperiencedcertain non-material cybersecurity incidents, we arenotawareofany cybersecurity threats, that have materially affe f cted or arereasonablylikelytomaterially affe f ct us, including our businessstrategy, results of operations or financialcondition. We face certain ongoing risksfro f m cybersecurity threats that, if realized andmaterial, may materiallyaffect us, including our operations,businessstrategy, results of operations or financialcondition. See Part 1, Item 1A “RiskFactors” fora discussion of risksfact f orsrelated to cybersecurity
Governance -Security is governed by the Security Advisory team, anexecutive advisory committeecomposed of company offi f cers, including our chiefexecutiveofficer, our chieffin f ancial offi f cer andour chiefenterpr r iseservices offi f cer. The Security Advisory team meetsregularly to evaluate ongoing security threats and incidents, to define policyand to prioritize initiatives. Identifie f dcybersecurity threats and incidents are monitored and assessedfor f materiality bythiscross-fun f ctionalSecurity Advisory Team This assessment includeswhether our BoardofDirectorsshouldbe infor f medofa threat or incident
The Security Advisory team is chairedbyour vice presidentofcybersecurityand physical security who has more than twenty yearsofrelevantexperience in thefie f ld of cyberand physical security. In his role, our vice presidentofcybersecurity and physical security also supe u rvises effo f rts to prevent, detect,mitigate andremediate cybersecurity risks and incidents through various means, which include briefings from internalsecurity personnel, alerts andreports produced by security toolsdeployed in our technology infrastructur t e and threat intelligence andother informationobtainedfro f mgovernmental, public or private sources, including external cybersecurity serviceproviders.Our vice presidentofcybersecurity andphysical security reports to our executive vice presidentand chiefenterpr r iseservicesoffic f er,responsible forcybersecurity, infor f mationtechnology, enterprise optimizationand innovation, among otherresponsibilities. Before joiningONEOK, our executive vice presidentand chiefenterpr r iseservicesofficer held informationtechnology positions of increasingresponsibility
Cybersecurity risks are communicated anddiscussedwithour BoardofDirectors at leastannually in conjunctionwith our overallERMprogram. InternalAudit provides periodicupda u tes to the AuditCommitteeontesting completed to meetTSA requirements. As part of itsoversight responsibilities, our BoardofDirectors also receivesfre f quent updatesfro f mexecutive management on our company’s physical andcybersecurity effo f rts.
ITEM2.PROPERTIES
Adescriptionofour properties is included in Item 1,Business.
ITEM 3. LEGAL PROCEEDINGS
We have elected to use a $1 millionthresholdfor f disclosing environmental proceedings.
Informationabout a our legal proceedings is included inNote P of the Notes to Consolidated FinancialStatements inthisAnnual Report.
ITEM 4. MINE SAFETY DISCLOSURES
Notappl a icable PART II
ITEM5.MARKET FOR REGISTRANT’S COMMONEQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIES
Ourcommonstock is listed on the NYSE underthe tradingsymbol “OKE ”Thecorpor r atename ONEOK is used in stock listings
At Feb. 17, 2025, therewere 15,874 holders of record of our 624,339,588 outstanding shares of commonstock
For infor f mation regarding our Employee Stock Award Programand otherequity compensation plans,see Note L ofthe Notes to Consolidated FinancialStatements and “Equity Compensation Plan Information” included in Part III, Item 12, Security Ownership of CertainBenefic f ialOwners and Management and Related Stockholder Matters, inthisAnnual Report.
REPURCHASES OF COMMONSTOCK
ISSUERPURCHASES OF EQUITY SECURITIES
Numberof Shares Purchased as Part of the Publicly Announced Program (a)
(a) -InJanuary 2024, our BoardofDirectors authorized a share repurchaseprogram to buy up to $2.0 billionofour outstanding common stock. Theprogram will terminateupon u completionofthe repurchases, oronJan 1,2029, whicheveroccurs first.
(b) -Excludes 125,000 shares that were repurchased in December 2024, andsettled inJanuary 2025
Thefol f lowing performance graphcompares the performance of our commonstock with the S&P 500 Index, the S&P 500 Energy Index and a ONEOKPeer Group during the period beginning on Dec. 31, 2019, andending on Dec. 31, 2024
Valueof a $100 Investment,Assuming Reinvestment of Distributions/Dividends, at Dec.31, 2019, and atthe Endof Every Year ThroughDec.31, 2024.
(a) -The S&P 500 Energy Indexis a subi u ndex ofthe S&P 500 that includes thosecompanies classified as membersofthe energy sector (b) -The current ONEOKPeer Group is composed of thefol f lowing companies: Antero Midstream Corp.; Energy Transfer f LP; Enterpr r ise Products Partners L P ; Kinder Morgan, Inc.; KinetikHoldings Inc.; MPLXLP; Plains AllAmerican Pipeline, L P ; TargaResources Corp.; Western Midstream Partners, LP; and The Williams Companies, Inc.
ITEM6. [RESERVED]
ITEM 7.MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Thefol f lowing discussion and analysisshouldberead in conjunctionwithPart I, Item 1, Business, our audited Consolidated FinancialStatements and the Notes to Consolidated FinancialStatements inthisAnnual Report.
Pleaserefer f to the “Financial Results and Operating Infor f mation” and “Liquidity and Capital Resources”sections of Management’s Discussion andAnalysisofFinancial Condition and Results of Operations in this Annual Reportfor f additional information.
Acquisitions andDivestitures
EnLink ControllingInterestAcquisition g q -OnOct 15, 2024, we completed the EnLink Controlling Interest Acquisition, acquiring GIP’s interest in EnLinkconsisting ofappr a oximately 43% of theoutstanding EnLink Units for $14.90 in cash per unit and 100% of theoutstanding limited liabi a litycompany interests inthe managing member of EnLink for $300 million, fortotal cashconsiderationof$3 3 billion. Through our 100% ownershipofthe managing member of EnLink, we obtainedcontrolof EnLink We used aportion of theproceedsfro f mour September2024 underwritten public offe f ring of $7.0 billionsenior unsecurednotes to fund this acquisition.
This acquisition meaningful f ly increases our scale and integrated valuechain within the growing PermianBasin while expanding andextending our assetbases in the Mid-Continent, North Texas and Louisianaregions.Weexpect to achieve significantsynergiesbycombining our complementarya r sset positions.Financial results andoperating infor f mationrelated to the EnLinkControlling InterestAcquisition impacts all four businesssegments and is includedwith “FinancialResults and Operating Infor f mation” forthe period Oct. 15, 2024 to Dec. 31, 2024
EnLink Acquisition q -OnNov. 24, 2024, we entered into the EnLinkMerger Agreementto acquire allofthe publicly held EnLink Units in an allstock, tax-free transaction. On Jan. 31, 2025, we completed the EnLink Acquisition. Pursuant to the EnLinkMerger Agreement, eachcommonunitof EnLinkwas exchangedfor f afix f ed ratio of 0 1412 shares of ONEOK commonstock, including EnLink Units that were exchangedfor f all previously outstanding Series B Preferred Units immediatelyprior to closing. We issued 41 millionsharesofcommonstock, with afai f rvalue of $4.0 billionasofthe closing date of the EnLinkAcquisition. EnLink is now a wholly ownedsubsidiary
Medallion Acquisition q -OnOct 31, 2024, we completed the Medallion Acquisition with GIP, acquiring allofthe equity interests in Medallion fortotal considerationof$2.6 billion, inclusiveofthe purchaseofadditional interests in a Medallion joint ventur t eowned by a separate third party We used aportionofthe proceedsfro f mour September2024 underwritten public offe f ring of $7.0 billion senior unsecurednotes to fund this acquisition. This acquisitionexpands our midstream services for crude r oiland condensate inWest Texas,specifically in the Midland Basin. Financialresults andoperating informationrelated to the MedallionAcquisition impactsour Refined Products and Crude segmentand is includedwith "FinancialResults and Operating Infor f mation" forthe period Nov. 1, 2024 to Dec. 31, 2024
Interstate NaturalGas Pipeline p Divestitur t e -OnDec 31, 2024, we completedsaleofthree of our wholly owned interstate naturalgas pipelinesystems to DTMidstream, Inc.for f totalcashconsiderationof$1.2 billion, andrecognized a gainof$227 million. Withaportion of theproceedsofthe sale, werepaid the Guardian Term Loan Agreementand the Viking Term Loan Agreement. This transactionaligns andenhances our capital allocation prioritieswithin our integrated valuechain
Gulf CoastNGLPipelinesAcquisition p q -OnJune 17, 2024, we completed the acquisition of a systemofNGLpipelines from Easton Energy, a Houston-basedmidstream company, forappr a oximately $280 million. This acquisition in our NaturalGas Liquids segment includesappr a oximately 450 milesofliquids products pipelines located in thestrategic Gulf Coastmarket centers forNGLs, Refined Products and crude r oil. A portion of the Eastonassets are alreadyconnected to our Mont Belvieu assets.Weexpectto add connections to our Houston-based assets beginning in mid-2025 through theend of 2025
Foradditional infor f mation on our most recentacquisitions anddivestiture,see Part II, Item 8, Note Bofthe Notes to Consolidated FinancialStatements inthisAnnual Report. See Part 1, Item 1A “RiskFactors” forfur f ther discussion of risks related to these transactions
Joint Ventures -OnFeb.4,2025, we entered intodefin f itive agreements tofor f m joint ventur t es withMPLX LP (MPLX) to construc r ta 400 MBbl/d liquified petroleumgas exportterminal in Texas City, Texas, and anew 24-inchpipelinefro f mour Mont Belvieu, Texas, storagefaci f lity to thenew terminal Texas City Logistics LLC, the exportterminaljointventure, is owned50% by us and50% by MPLX, withMPLX construc r ting and operating the facility. MBTC Pipeline LLC, the pipeline jointventure, isowned 80% by us and20% by MPLX, and we will construc r tand operate thepipeline. We expect to invest approximately $1.0 billion inthese projects.
Market Condition - Earnings increased in2024, compared with2023, due primarilyto a fullyear of earnings from our new Refined Products and Crude segment, higherNGL andnatur t al gas processing volumes in the Rocky Mountainregionand the impact of the interstatepipelinedivestiture in the Natur t al Gas Pipelines segment. Ourextensive and integrated assets are located in, and connected with,someofthe mostproductiveshale basins, aswellasrefin f eries and demand centers, inthe United States.
CapitalProjects -Our primaryc r apital proje o cts are outlined inthe tabl a ebelow:
Natural Gas Liquids (In millions) s
MB-6 fractionator
125 MBbl/d NGLfra f ctionator in Mont Belvieu, Texas
$550 Completed West Texas NGLpipelineexpansion
ElkCreekpipelineexpansion
Medfor f dfra f ctionator
Refined Products andCrude
Greater Denver pipelineexpansion
(a) -Excludescapitalized interest/A t FUDC
Increasecapacity viapipeline looping in the PermianBasin
Increasecapacity to 435 MBbl/d out of the Rocky Mountain region
Rebuild our 210 MBbl/d NGLfra f ctionationfaci f lity in Medfor f d, Oklahoma
Increase total system capacity by 35 MBbl/d and additional expansioncapabilities
$520 Completed
$355 Completed (b)
$385 (c)
$480 Mid-2026
(b) - Wecompleted construc r tion inJanuary 2025, and the project is partiallyinservice. Following suppl u yofful f l power,expected in mid-2025, we will reach theful f lcapacity of 435 MBbl/d
(c) -This proje o ct is expected to be completed intwo phases, with thefir f stphase expected to be completed inthe fourthquarter of 2026, and thesecond phase completed inthe firstquarter of 2027
In our NaturalGas Gathering and Processing segment, we have a capitalproject to relocate a150 MMcf/dprocessing plantto thePermianBasin fromNorthTexas, whichweexpect to be in service inthe firstquarter of 2026
Debt Issuances - InSeptember 2024, we completed anunderwritten public offe f ring of $7.0 billionseniorunsecurednotes consisting of$1.25 billion, 4.25% senior notes due 2027; $600 million, 4.4% senior notes due 2029; $1.25 billion, 4.75% senior notes due 2031; $1.6 billion, 5.05% senior notes due 2034; $1.5 billion, 5.7% senior notes due 2054; and$800 million, 5.85% senior notes due 2064. Thenetproceeds, afte f rdeduc d ting underwriting discounts, commissions andoffering expenses, were $6.9 billion. Thenetproceeds fromthisoffering were used to fund the EnLinkControlling InterestAcquisitionand the MedallionAcquisition, purchase additional interests in a Medallion joint ventur t eowned by a separate third party, to payfee f s andexpenses related to the acquisitions and torepay outstanding indebtedness.
Debt Repayments - InDecember2024, we redeemed our $500 million, 4.9% senior notes due March2025 at100% of the principalamount, plus accrue r d and unpaid interest, withcashon hand.
In September2024, we repaid theremaining $484 millionofour $500 million, 2.75% senior notes at maturity with cashon hand.
Share Repurchase Program - InJanuary 2024, our BoardofDirectors authorized a share repurchaseprogram to buy up to $2.0 billion of our outstanding commonstock.Weexpect shares to be acquiredfro f mtime to time in open-market transactions or throughprivately negotiated transactions at our discretion, subj u ect to market conditions andother factors. We expect any purchases to be fundedbycashon hand, cashflo f wfro f moperations andshort-term borrowings. The program will terminate upon completion of therepurchaseof$2.0 billionofcommonstock or on Jan. 1, 2029, whicheveroccurs first. As of Feb. 17, 2025, we repurchased 1.675 millionsharesfor f $172 million underthe program.
Dividends -During2024, we paid common stockdividends totaling $3.96 pershare, an increaseof3.7% compared to the 2023 dividend of $3.82 pershare InFebruary2 r 025, we paid a quarterly common stockdividendof$1 03pershare ($4.12 pershare on an annualized basis), an increaseof4% comparedwiththe same quarter in theprior year.Our dividend growth is due primarily to the increase incashflo f ws resultingfro f mthe growth of our operations The quarterly stockdividendwas paid on Feb. 14, 2025, to shareholders of record at theclose of businessonFeb. 3,2025.
How WeEvaluateOur Operations p
Management uses a variety of financialand operatingmetrics to analyzeour performance. Ourconsolidated financialmetrics include:(1) operating income; (2) net income; (3) diluted EPS; and (4) adju d sted EBITDA We evaluate segmentoperating results using adjusted EBITDAand our operatingmetrics, which include various volume and rate statistics thatare relevant for therespectivesegment These operatingmetrics allow investors to analyze thevarious componentsofsegment financialresults in termsofvolumes andrate/pr / ice. Management uses thesemetrics to analyze historical segmentfin f ancial results and as the keyinputsfor f forecasting andbudgetingsegment financialresults.For additional infor f mationonour operatingmetrics, see the respectivesegment subs u ections of this “FinancialResults and Operating Infor f mation” section.
Non-GAAP FinancialMeasures -Adjusted EBITDA is a non-GAAP measureofour financial performance. Adju d sted EBITDA is defined asnet income adju d sted for interestexpense, depreciationand amortization, noncash impairmentcharges, income taxes, noncashcompensationexpense and certainother noncash items.Following the MagellanAcquisition, we performed areviewofour calculationmethodology of adju d sted EBITDA and, beginning in 2023, we updatedour calculationto include the adjusted EBITDArelated to our unconsolidated affi f liates using the same recognitionand measurementmethods used to record equity in netearnings from investments. In prior periods, our calculation includedequity in netearnings from investments. This change resulted inanadditional $62 million of adju d sted EBITDA in 2023, andwe havenot restated prior periods.Adjusted EBITDAfro f mour unconsolidated affi f liates iscalculatedconsistently with thedefin f itionabove a andexcludes items suchas interest expense, depreciation and amortization, income taxes and othernoncash items.Although the amounts related toour unconsolidated affi f liates are included inthe calculationofadjusted EBITDA, such inclusionshouldnot be understood to imply that we have controloverthe operations andresultingrevenues, expenses or cashflo f ws of such unconsolidated affi f liates.
We believe thisnon-GAAPfinancialmeasure isusefulto investorsbecause it andsimilarmeasures areusedby many companies inour industrya r s a measurementoffin f ancialperformance and iscommonly employedbyfin f ancial analysts and others to evaluate our financial performance and tocompare financial performance among companies inour industry. r Adju d sted EBITDA shouldnot be considered an alternative tonet income, EPS or anyother measureoffin f ancialperformance presented in accordance with GAAP.Additionally, thiscalculationmay not be comparable with similarlytitledmeasures of other companies. Seereconciliationofnet income to adju d sted EBITDA in the “Non-GAAPFinancial Measures”subsection.
Consolidated Operations p
Selected FinancialResults - The following tabl a esetsfor f th certain selected financialresults forthe periods indicated:
of sales and fuel (exclusive of items shown separately below)
Changes incommodity prices andsales volumes affe f ct bothrevenues and cost of sales and fuel in our Consolidated Statements of Income and, therefor f e, the impact is largelyoffset betweenthese line items
Due to the MedallionAcquisitionand EnLink Controlling Interest Acquisition, operatingresults forthese twocompanies are included inour financialresults beginning Nov. 1, 2024 and Oct 15, 2024, respectively
2024vs. 2023 -Operating income increased $917 million primarily as aresultofthe following:
•Nat N ural GasGathe t ring and Processing -an increaseof$181 milliondue d primarily to theoperating incomeof EnLink, highervolumes in the Rocky Mountainregionand thesaleofcertain non-strategic assets, offsetpartially by lower realized NGLprices,net of hedging, and higheroperating costs; offs f et by
•Nat N ural GasLiquids -a decrease of $564 million due primarilyto an insurance settlementgain in2023 related to the Medfor f d incidentand higheroperating costs, offse f t partially by an increase inexchange services due primarily to highervolumes in the Rocky Mountainregionand to theoperating income of EnLink; offs f et by
• NaturalGas Pipe i lines -an increaseof$291 million due primarilyto the interstate naturalgas pipeline divestiture in 2024, highertransportation services and the operating incomeof EnLink;
• Refin e ed Products and Crude -an increaseof$934 milliondue d to aful f lyear of operating incomefol f lowing the MagellanAcquisition in2023 and the operating incomeof Medallionand EnLink in 2024; and •Cons C olidat d ed TransactionCos C ts -a decreaseof$85 milliondue d primarilyto highertransactioncosts related to the MagellanAcquisition in2023.
Net income increased due primarily to the items discussedabove a and higherequity in netearnings from investments, offs f et partially by higher interestexpensedue d to higherdebtbalancesresultingfro f mthe August2023 $5.25 billionnotes offe f ring, the September2024 $7.0 billion notes offe f ring and the acquireddebtbalances fromboththe MagellanAcquisition in2023 and the EnLink Controlling InterestAcquisition in2024
Diluted EPS decreased due primarily to the impactofthe insurancesettlement gain in 2023 related to the Medfor f d incident
Capi a talexpenditures increased due primarily to our capi a tal proje o cts. Pleaserefer f to the “RecentDevelopments”section of Management’s Discussion andAnalysisofFinancial Condition and Results of Operations in this Annual Reportfor f additional informationonour capi a tal proje o cts.
Additional infor f mation regarding our financialresults andoperating infor f mation is provided inthe following discussion for each of our segments
Selected FinancialResults andOperating Informationfor f the Year EndedDec.31, 2023 vs.2022 - The consolidated and segmentfin f ancial results and operating infor f mationfor f the year endedDec. 31, 2023, compared with the year endedDec. 31, 2022, are included in Part II, Item 7, Management’s Discussion andAnalysisofFinancial Conditionand Results of Operations of our 2023 Annual ReportonForm10-K, which is available via the SEC’swebsite at www.sec.gov andour website at www.oneok.com
Natural Gas Gatheringand Processing g g
CapitalProjects -Our NaturalGas Gathering and Processing segment invests incapital proje o cts innatur t al gas and NGL-rich areas across key basins whereweoperate.See “Capital Proje o cts” in the “Recent Developments”sectionfor f more information on our capital proje o cts.
Fora discussion of our capitalexpenditure financing, see “Capi a tal Expenditures” in the “Liquidity and CapitalResources” section.
Selected FinancialResults andOperating Information - The following tablesset forthcertain selected financialresults and operating infor f mationfor f our NaturalGas Gathering and Processing segmentfor f theperiods indicated:
(exclusive of depreciationand operating
costs,excluding noncashcompensation
Adju d sted
j (a) - Beginning in 2023, we updatedour calculationmethodology of adju d sted EBITDA to include adju d sted EBITDA fromour unconsolidated affi f liates, whichresulted inanadditional $3millionofadjusted EBITDA in2023, andwe havenot restated prior periods
Changes incommodity prices andsales volumes affe f ct bothrevenue andcostofsales andfue f l, and, therefor f e, the impact is largelyoffset betweenthese line items.
2024vs. 2023 -Adjusted EBITDA increased $240 million, primarily as aresultofthe following:
• an increaseof$200 milliondue d to adju d sted EBITDA from EnLink; •an increaseof$77 millionfro f m highervolumes due primarilyto increased production inthe RockyM k ountainregion; and
• an increase of $59 millionfro f mthe sale of certain non-strategic assets in 2024, primarily in Kansas; offs f et by •a decreaseof$54 milliondue d primarily to lowerrealized NGLprices,net of hedging, offs f etpartially by higheraverage feerates andrealizedcondensate and naturalgas prices,net of hedging; and
• an increaseof$44 million inoperating costsdue d primarilyto higheroutside services,employee-relatedcosts and materials and suppl u iesexpensedue d primarily to the growthofour operations
Capi a talexpenditures increased for2024, as compared to 2023, due to capi a tal proje o ctsfor f EnLink.
(a) - Includesvolumes forconsolidated entitiesonly, andexcludes EnLink, as EnLink operatingstatistics are not meaningful f to full-year 2024 operating results
(b) - Includesvolumes we processed atcompany-owned and third-partyfaci f lities.
2024vs. 2023 -Our naturalgas processedvolumes increaseddue d primarily to increasedproduction in the Rocky Mountain region. Ouraverage feerate increased due primarily to inflation-basedescalators inour contracts.
Natural Gas Liquids q
CapitalProjects -Our NaturalGas Liquids segment invests incapitalprojects to transport, fractionate,store, deliver to market centers andreceive NGL suppl u yfro f mshale andother resource developmentareas.Our growth strategy is focusedon connecting diversified rawfee f dsupply basins to PurityNGL export, petrochemical andrefin f ing demandcenters.See “Capital Projects” inthe “RecentDevelopments” sectionfor f more informationonour capital proje o cts.
In 2024, we connected one third-party natur t al gas processing plant inthe PermianBasin to our system, and two third-party naturalgas processing plants previously connected to our system were expanded, one in the PermianBasin andone in the MidContinentregion.
Fora discussion of our capitalexpenditure financing, see “Capi a tal Expenditures” in the “Liquidity and Capital Resources” section.
Selected FinancialResults andOperating Information - The following tablesset forthcertain selected financialresults and operating informationfor f our NaturalGas Liquids segmentfor f theperiods indicated:
(a) - Beginning in 2023, we updatedour calculationmethodology of adju d sted EBITDA to include adju d sted EBITDA fromour unconsolidated affi f liates, whichresulted inanadditional $9millionofadjusted EBITDA in2023, and we have not restated prior periods
Changes incommodity prices andsales volumes affe f ct bothrevenues and cost of sales and fuel and, therefor f e, the impact is largelyoffset betweenthese line items
2024 vs.2023 -Adjusted EBITDAdecreased$502 million primarily as aresultofthe following:
• a decreaseof$695 millionrelated to the Medford incident,due d primarily to an insurancesettlement gain in 2023 of $779 million, offs f etpartially by $84 millionoflower third-partyfra f ctionationcosts in thecurrent year;
•an increaseof$77 million inoperating costs due primarilyto planned assetmaintenance, higheremployee-related costs and propertytaxes fromthe growth of our operations; and
•a decreaseof$9million in optimizationand marketingdue d primarily to lowerearnings on salesof Purity NGLs held in inventory; r offs f et by
• an increase of $184 million inexchange services due primarilyto highervolumes in the Rocky Mountainregion, higheraverage feerates andwider commodity pricediffe f rentials, offsetpartially by lowervolumes in the GulfCoast/ t Permianand Mid-Continentregions, and highertransportationcosts;
•an increaseof$59 milliondue d to adju d sted EBITDA from EnLink; and
•an increaseof$31 million inadjusted EBITDAfro f munconsolidated affi f liatesdue d primarily to highervolumes delivered to the Overland Pass Pipeline.
Capi a talexpenditures increased in 2024 due primarilytocapital proje o cts, which includesour MB-6 fractionatorand pipeline expansion proje o cts.
YearsEndedDec.31, Operating Information2024
Rawfee f d throughput (MBbl/d l )(d a)
Average Conway-to-Mont BelvieuOilPrice Infor f mationService pricediffe f rentialethane in ethane/propane mix ($/gal / lon)
(a) -Represents physical rawfeed f volumes forwhich we provide transportationand/or fractionationservices, and excludes EnLink, as EnLink operating statistics are not meaningful f to full-year 2024 operatingresults
We generally expect ethane volumes to increaseordecreasewithcorresponding increases or decreases in overallNGL production. However, ethane volumes may experience growth or decline greater than corresponding growth or decline in overallNGLproductiondue d to ethane economicscausing producers torecoverorreject ethane.
2024 vs.2023 -While exchange services earnings increased, volumes decreased in2024 due primarily to theexpiration of lowmargin contracts inthe prioryearand lowervolumes in the PermianBasin, offsetpartially by increased production inthe RockyM k ountainregionat higherfee f rates.
Natural Gas Pipelines p
CapitalProjects -Our NaturalGas Pipelines segment invests incapital proje o cts that provide transportation andstorage services to endusers.Werecently reactivatedpreviously idledstorage facilities with 3Bcf of workinggas storagecapacity in Texas. In addition, we are inthe processofexpanding our storage injectioncapabilities inOklahoma, adding 4Bcf of working gasstorage capa a city, which we expect to be complete in thesecond quarter of 2025
Fora discussion of our capitalexpenditure financing, see “Capi a tal Expenditures” in the “Liquidity and Capital Resources” section.
Interstate Natural Gas PipelineDivestiture -OnNov. 19, 2024, we entered into a definitive agreementwithDTMidstream, Inc. to sell threeofour wholly owned interstatenatur t al gas pipelinesystems.OnDec. 31, 2024, we completed the sale and recognized a gain of $227 million.
Selected FinancialResults andOperating Information - The following tablesset forthcertain selected financialresults and operating infor f mationfor f our NaturalGas Pipelines segmentfor f theperiods indicated:
(a) - Beginning in 2023, we updatedour calculationmethodology of adju d sted EBITDA to include adju d sted EBITDA fromour unconsolidated affi f liates, whichresulted inanadditional $42 millionofadjusted EBITDA in2023, andwe havenot restated prior periods
2024 vs.2023 -Adjusted EBITDA increased $341 million primarily as aresultofthe following:
•an increaseof$227 milliondue d to the interstatenatur t al gas pipelinedivestiture;
•an increaseof$75 million intransportationservices due primarily to higherfir f mand interruptible rates;
• an increaseof$41 milliondue d to adju d sted EBITDA from EnLink; and
• an increaseof$16 million inadjusted EBITDAfro f munconsolidated affi f liatesdue d primarily to increased volumes on Northern Border; offs f et by
• an increase of $19 million inoperating costs due primarilyto planned assetmaintenance andemployee-relatedcosts.
Capi a talexpenditures increased in2024 due primarily to capital proje o cts and timing ofmaintenance projects.
YearsEndedDec.31,
(a) -Includesvolumes forconsolidated entitiesonlyand excludes EnLink, as EnLinkoperatingstatistics are not meaningful f to full-year 2024 operatingresults
2024 vs.2023 - Naturalgas transporta i tioncapacity ity contracted increaseddue d primarilyto the completionofexpansion proje o cts on our assets
CapitalProjects -Our Refined Products and Crude segment invests incapitalprojects to transport, store and distribute Refin f ed Products andcrude oil primarily throughout thecentral United States.Our growth strategy is focusedonexpanding our core business and marketing presence. See “Capi a tal Proje o cts” in the “Recent Developments”sectionfor f more information on our capi a tal proje o cts.
Fora discussion of our capitalexpenditure financing, see “Capi a tal Expenditures” in the “Liquidity and Capital Resources” section.
Selected FinancialResults andOperating Information - The following tablesset forthcertain selected financialresults and operating informationfor f our Refined Products and Crude segmentfor f theperiods indicated:
j (a) - The year endedDec. 31, 2023, includesresults subs u equent to the MagellanAcquisition.
Changes incommodity prices andsales volumes affe f ct bothrevenues and cost of sales and fuel in our Consolidated Statements of Income and, therefor f e, the impact is largelyoffset betweenthese line items
2024 vs.2023 -Adjusted EBITDA increased $1,427 million as aresultofthe following:
•an increaseof$1,354 milliondue d to aful f l-year of operating resultsfol f lowing the MagellanAcquisition, which includes a non-recurring increase in adju d sted EBITDA fromunconsolidated affi f liatesof$88 milliondue d primarily to BridgeTex; and
•an increaseof$73 milliondue d to adju d sted EBITDA from Medallionand EnLink.
(a) -Includesvolumes forconsolidated entitiesonlyand excludes Medallionand EnLink, as Medallionand EnLink operatingstatistics are not meaningful f to full-year 2024 operating results
Market conditions andseasonality can cause volumeflu f ctua t tions in a single quarter that arenot representativeofful f l-year results.
Thefol f lowing tabl a esetsfor f th areconciliationofnet income, the nearestcomparabl a e GAAPfinancial performance measure, to adju d sted EBITDA forthe periods indicated:
(Unaudited)
Reconciliation of net incometoadjustedEBITDA (Millions
Adju d sted EBITDA fromunconsolidated affi f liates(a)
Equity in netearnings from investments(a) (439) (202)
other
Adju d sted EBITDA (a)(b)(c)(d)
Reconciliation of segmentadjustedEBITDA toadjustedEBITDA
Segmentadjusted EBITDA:
(d)
(a) - Beginning in 2023, we updatedour calculationmethodology of adju d sted EBITDA to include adju d sted EBITDA fromour unconsolidated affi f liatesusing thesamerecognitionand measurementmethods used to record equity in netearnings from investments. In prior periods, our calculation includedequity in netearnings from investments. This change resulted inanadditional $62 millionofadjusted EBITDA in2023, andwe havenot restated prior periods
(b) -The year endedDec. 31, 2023, includes $633 millionrelated to the Medford incident, including a settlement gain of $779 million, offs f et partially by $146 millionofthird-party fractionationcosts.
(c) -The yearendedDec. 31, 2024 includes transactioncosts relatedprimarily to the EnLinkAcquisitions and MedallionAcquisitionof$73 million, offs f etpartially byinterest incomeof$39 million. The year endedDec. 31, 2023, includes transactioncosts related to the Magellan Acquisition of $158 million, offs f etpartially by interest income of $49 millionand netgains of $41 milliononextinguishment of debt related to openmarketrepurchases
(d) -The year endedDec. 31, 2024, includesa gain of $227 millionfro f mthe interstate naturalgas pipelinedivestiture
(e) -The year endedDec. 31, 2023, includessegment adju d sted EBITDA forthe period Sept.25, 2023, throughDec. 31, 2023
CONTINGENCIES
See Note P of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f a discussion of regulatorya r nd legal matters.
OtherLegalProceedings -We are aparty to various legal proceedings that have arisen in thenormalcourse of our operations. While theresults of theseproceedings cannot be predictedwithcertainty, webelieve thereasonablypossible lossesfro f msuch proceedings, individually and inthe aggregate, arenot material.Additionally, webelieve theprobabl a efin f al outcome of such proceedings will not have amaterialadverseeffect on our consolidated results of operations,fin f ancialpositionorcashflo f ws
LIQUIDITY AND CAPITAL RESOURCES
General -Our primarys r ourcesofcash inflo f ws areoperating cashflo f ws, proceedsfro f mour commercial pape a r program andour $3.5 Billion Credit Agreement, debt issuances and the issuance of common stockfor f our liquidity andcapitalresources requirements.
We expect our sourcesofcash inflo f ws to provide suffic f ient resources to financeour operations, capitalexpenditures, quarterly cash dividends,matur t itiesoflong-term debt,share repurchases andcontributions to unconsolidated affi f liates. We believewe have sufficient liquidity due to our $3.5 BillionCreditAgreement, whichexpires inFebruary2 r 030, and access to $1.0 billion availabl a e through our “at-the-market”equity program.AsofFeb. 17, 2025, no shares have been sold through our “at-themarket”equity program
We may manage interest-rate risk through theuse of fixed-rate debt,flo f ating-rate debt, Treasuryl r ocks and interest-rate swaps. Foradditional infor f mation on our interest-rate swaps, see Note E of the Notes to Consolidated FinancialStatements inthis Annual Report.
Cash Management -AtDec 31, 2024, we had$733 million of cash andcashequivalents. Forour wholly ownedsubsidiaries, we use a centralized cashmanagement program that concentrates thecashassets of our wholly ownednonguarantor operating subs u idiaries in jointaccountsfor f thepurpos r es of providing financialfle f xibility and lowering the cost of borrowing, transaction costs and bank fees.Our centralized cashmanagement program provides thatfunds f in excessofthe daily needsofour operating subs u idiaries areconcentrated, consolidated or otherwisemade availabl a efor f usebyother entitieswithin our consolidated group Ouroperatingsubsidiaries participate inthis program to theextenttheyare permittedpursuanttoFERC regulations or theiroperating agreements.Underthe cashmanagement program, depending on whethera participating subs u idiary hasshort-term cashsurpl r uses or cashrequirements, we provide cashto the subs u idiary or thesubsidiary providescash to us
In December2024, we entered into anagreement to provide revolving unsecured loans to EnLink throughapromissory note at an interest rate of 4.85% atDec. 31, 2024 This is aflo f atingrate agreementwhich bears interestatONEOK’scurrent shortterm borrowing rate plus 0.25%.AtDec. 31, 2024, we held apromissory notereceivabl a eof$510 million, whichwas eliminated in consolidation. Interest earned on this agreementwas not material.Following the EnLinkAcquisition, completed on Jan. 31, 2025, we effe f ctivelyterminated this agreementas EnLinkoperating subs u idiaries arewholly owned and now participate inthe cashmanagement program describedabove a
Guarantees -ONEOK, ONEOKPartners, the Intermediate Partnershipand Magellan (Obligated Group) have crossguarantees in place forONEOK’s and ONEOKPartners’indebtedness These guarantees in place forour and ONEOKPartners’ indebtedness areful f l, irrevocable, unconditionaland absolute jointand severalguarantees to the holders of each series of outstanding securities. Liabilities underthe guarantees rankequally in right of paymentwith allexisting and future senior unsecured indebtedness. The Intermediate Partnership holds allofONEOKPartners’interests andequity in its subs u idiaries, whichare nonguarantors, andsubstantially allthe assets andoperations reside with nonguarantor operatingsubsidiaries Magellan holds interests in its subs u idiaries, which arenonguarantors, andsubstantially allthe assets andoperations reside with nonguarantor operatingsubsidiaries
At Dec. 31, 2024, EnLink was a subs u idiary of ONEOK, but didnot guarantee ONEOK’sorONEOKPartners’indebtedness and wasexcludedfro f mthe Obligated Group. EnLink and EnLink Partners also had outstanding debt securities thatwerenot guaranteed by ONEOKas of Dec. 31, 2024 At thecompletionofthe EnLink AcquisitiononJan 31, 2025, ONEOKassumed theoutstanding debt of EnLink and EnLink Partners(theAssumedDebt) such thatEnLink and EnLink Partnerswereeach released fromall debt obligations, and provided a guarantee forour and ONEOKPartners’indebtedness to the holders of each series of outstanding securities, including forthe AssumedDebt. EnLink and EnLink Partners are now included inthe Obligated Group As of thedateofthisreport, thecombinedfin f ancial informationofsubsidiary issuers and parent guarantors, excluding our ownershipofall interest in ONEOKPartners, Magellanand EnLink, reflect no materialassets or liabi a litiesor results of operations,apa a rt fromguaranteed indebtedness and therefore, we haveexcluded the summarized financial informationfor f each issuer and guarantor.
Foradditional infor f mation on our indebtedness, pleasesee Note H ofthe Notes toConsolidated FinancialStatements inthis Annual Report.
Short-term Liquidity -Our principalsourcesofshort-term liquidity consistofcashgenerated fromoperating activities, distributions receivedfro f mour unconsolidated affi f liates, proceedsfro f mour commercial paper program andour recently executed$3.5 BillionCreditAgreement. In Februa r ry 2025, we amended and restated our $2.5 BillionCreditAgreement to increase the size to $3.5 billion, extend the termtoFebruary2 r 030 andmakeother non-material modifications.All otherterms andconditions remain subs u tantially thesame. As of Feb. 17, 2025, we hadnoborrowings underour $3.5 BillionCredit Agreement, andwe are in compliancewith allcovenants. Upon closing ofthe EnLink AcquisitiononJan. 31, 2025, the EnLink Revolving Credit Facilitywas terminated
We hadworking capi a tal(defined ascurrent assets less current liabilities) deficits of $481 millionand $344 millionasofDec 31, 2024, andDec. 31, 2023,respectively, due primarily to currentmatur t itiesoflong-term debt.Generally, our working capital is influenced by severalfac f tors, including, among otherthings:(i) the timing of (a) debt andequity issuances,(b) thefundi f ng of capitalexpenditures, (c)schedul d ed debtpayments, and (d) accountsreceivabl a e and payabl a e; and (ii) thevolume and cost of inventorya r nd commodity imbalances.Wemay have working capitaldefic f its in future periods as our long-term debt becomes current.Wedonot expecta working capitaldefic f it of this nature to have amaterialadverse impact to our cashflo f ws or operations
Foradditional infor f mation on our $3.5 Billion Credit Agreement, see Note H of the Notes to Consolidated FinancialStatements in this Annual Report.
Long-termFinancing - Inaddition to our principalsourcesofshort-term liquidity discussedabove a , weexpect to fund our longer-termfin f ancingrequirementsbyissuing long-term notes, asneeded.Other options to obtainfin f ancing include,but are not limited to, issuing commonstock, loans fromfin f ancial institut t ions, issuance of convertible debt securitiesor preferred equity securities, assetsecuritizationand thesale and lease-back of facilities.
We may, at anytime,seektoretireor purchaseour or ONEOKPartners’ outstanding debt through cashpurchases and/or exchangesfor f equity or debt, inopen-market repurchases, privately negotiated transactions or otherwise. Such repurchases and exchanges, if any, will be on such terms and prices as we maydetermine, andwill depend on prevailingmarketconditions, or liquidity requirements, contractua t lrestrictions andother factors. The amounts involvedmay be material
Debt Issuances - InSeptember 2024, we completed anunderwritten public offe f ring of $7.0 billionseniorunsecurednotes consisting of senior notes of thefol f lowing tenors: $1.25 billion, 4.25% senior notes due 2027; $600 million, 4.4% senior notes due 2029; $1.25 billion, 4.75% senior notes due 2031; $1.6 billion, 5.05% senior notes due 2034; $1.5 billion, 5.7% senior notes due 2054; and$800 million, 5.85% senior notes due 2064 Thenetproceeds, afte f rdeduc d ting underwriting discounts, commissions andoffer f ingexpenses, were$6 9 billion. Thenetproceeds from this offe f ring were used to fund the EnLink Controlling Interest Acquisition and the MedallionAcquisition, purchase additional interests in a Medallion joint ventur t e ownedbya separate thirdparty, to pay fees andexpenses related to the acquisitions and torepay outstanding indebtedness.
Debt Repayments - InDecember2024, we repaid $120 millionof borrowings underthe Guardian Term Loan Agreementand $60 million of borrowings underthe Viking Term Loan Agreement, plus accrued andunpaid interest, withcashon hand, as part of the interstatenatur t al gas pipelinedivestitur t e.
In December2024, we redeemed our $500 million, 4.9% senior notes due March2025 at100% of theprincipal amount, plus accrued andunpaid interest, with cashon hand.
Subs u equent to the EnLinkControlling InterestAcquisition, we repaid $465 million of borrowings underthe EnLinkRevolving Credit Facility with cashon hand.
Subs u equent to the EnLinkControlling InterestAcquisition, we repaid $374 millionof borrowings underthe EnLink ARFacility with cashon hand and terminated the EnLinkAR Facility
In September2024, we repaid theremaining $484 millionofour $500 million, 2.75% senior notes at maturity with cashon hand.
Equity -OnJan. 31, 2025, we completed the EnLink Acquisition. Pursuant to the EnLink MergerAgreement, each common unitof EnLinkwas exchangedfor f afix f ed ratio of 0 1412 shares of ONEOK Commonstock, including EnLink Units thatwere exchangedfor f all previously outstanding Series B Preferred Units immediatelyprior to closing. We issued 41 million shares of commonstock, witha fair valueof$4.0 billion. There are no remaining SeriesB Prefer f red Units outstanding
On Oct. 17, 2024, EnLink redeemed alloutstanding Series C Preferred Units at $1,000 perSeriesC Prefer f red Unit, plus $8.28 perSeriesC Prefer f red Unitofunpaid distributions,for f $365 millionwith proceedsreceivedfro f mborrowings underthe EnLink Revolving Credit Facility As of Dec. 31 2024, there are no remaining SeriesC Prefer f red Units outstanding
Share Repurchase Program - InJanuary 2024, our BoardofDirectors authorized a share repurchaseprogram to buy up to $2.0 billionofour outstanding commonstock.Weexpect shares to be acquiredfro f mtime to time in open-market transactions or through privately negotiated transactions at our discretion, subj u ect to market conditions andother factors. As of Feb. 17, 2025, we haverepurchased 1.675 millionsharesfor f $172 millionunderthe program with cashon hand. Theprogram will terminateupon u completion of therepurchaseof$2.0 billion of commonstock or on Jan. 1, 2029, whicheveroccurs first.
Material Commitments -We havematerialcashcommitmentsrelated to our capi a talexpenditures, senior notes and corresponding interestpayments, which we expect to fund through our sources of cash inflo f ws discussedabove a .Our senior notes and interest payments are discussed inNote H of the Notes to Consolidated FinancialStatements inthisAnnual Report. We also have cash commitments related to transportation, storage and othercommercialcontracts, as wellas our financialand physical derivativeobligations, which we expect to fund with cashfro f moperations
CapitalExpenditures -Weproactively monitorlead times on materials and equipmentused inconstruc r ting capitalprojects, andweenter into procurementagreements for long-lead itemsfor f potential proje o cts to planfor f future growth.Our capi a tal expenditures are financed typically through operating cashflo f ws andshort- and long-term debt
Thefol f lowing tabl a esetsfor f th our capitalexpenditures, excluding theequity portion of AFUDC,for f theperiods indicated:
(b)
(a) - Includescapitalexpendituresfor f EnLink and Medallionfor f theperiod Oct 15, 2024, and Nov. 1, 2024, throughDec. 31, 2024, respectively.
(b) -The year endedDec. 31, 2023, includescapitalexpendituresfor f theperiod Sept. 25, 2023, throughDec. 31, 2023.
Capi a talexpenditures increased in 2024, compared with2023, due primarilytoour capital proje o cts, including our MB-6 fractionatorand the NGL and Refin f ed Products and Crude pipelineexpansion proje o cts. Seediscussion of our announced capi a tal proje o cts inthe “Recent Developments”section.
We expect totalcapital expenditures, excluding AFUDC andcapitalized interest, of$2 8 - $3.2 billion in2025
Credit Ratings -Our long-term debt credit ratings as of Feb. 17, 2025, areshown inthe tabl a ebelow: Rating Agency Long-Term RatingShort-Term Rating
Ourcreditratings, which are investment grade, may be affected by our leverage, liquidity, credit profile or potential transactions. The most commoncriteriafor f assessmentofour credit ratings are the debt-to-EBITDA ratio, interestcoverage, businessrisk profile and liquidity Ifour credit ratings were downgraded, our cost to borrowfunds f underour $3.5 Billion Credit Agreementwould increase, and apotential lossofaccess to thecommercial paper market couldoccur. In theevent that we areunabl a e toborrowfunds f underour commercial paper program and there hasnot been amaterialadversechange inour business, we wouldcontinue to have access toour $3.5 Billion Credit Agreement, whichexpires in2030. An adversecredit rating change alone is nota defau f lt underour $3.5 Billion Credit Agreement.
In thenormalcourse of business, our counterpa r rties provide us with secured and unsecuredcredit. In theevent of a downgrade in our credit ratings or a significantchange in our counterpa r rties’ evaluationofour creditworthiness, we couldberequired to provide additionalcollateral inthe form of cash, letters of credit or othernegotiabl a e instrum r ents as a conditionofcontinuing to conductbusinesswithsuchcounterpa r rties. We may berequired tofund f margin requirementswith our counterpa r rtieswithcash, lettersofcreditorother negotiabl a e instrum r ents
Dividends - Holders of our common stockshare equallyinany common stockdividends declared by our BoardofDirectors, subj u ect to therightsofthe holders of outstanding prefer f redstock. In2024, we paid commonstock dividends totaling $3.96 per share, an increaseof3 7% compared to the2023 dividend of $3.82 pershare InFebruary2 r 025, we paid a quarterly common stockdividendof$1.03pershare ($4.12 pershare on an annualized basis), an increaseof4% comparedwith thesame quarter in theprior year
Forthe year endedDec 31, 2024, our cashflowsfro f moperations exceeded dividends paid by $2.6 billion. We expect our cash flowsfro f moperations to continue to sufficiently fund our cash dividends. To the extent operating cashflo f ws arenot suffic f ient to fund our dividends, wemay utilizecashon handfro f mother sources of short- and long-term liquidity to fund aportionofour dividends.
We use the indirect method to prepareour Consolidated Statements of CashFlows. Underthismethod, we reconcilenet income to cashflo f ws providedbyoperating activitiesbyadjustingnet income forthose items that affe f ct net incomebut do not result in actua t lcashreceiptsor paymentsdur d ing the period andfor f operating cashitems that do not impact net income. These reconciling items can include depreciationand amortization, deferred income taxes, impairmentcharges, allowancefor f equity funds used during construc r tion, gain or loss on sale of business and assets,net undistributed earnings from equity-method investments, share-basedcompensationexpense, otheramounts and changes inour assets and liabi a litiesnot classified as investing orfin f ancing activities
Thefol f lowing tabl a esetsfor f th thechanges incashflo f ws by operating, investing and financing activitiesfor f theperiods indicated:
YearsEndedDec.31, 2024 2023 2022 (Millions of dollars)
Total cash providedby (used in):
OperatingCashFlows -Operating cashflows are affe f cted by earnings from our business activities and changes inour operating assets and liabi a lities. Changes incommodity prices anddemandfor f our services or products, whether because of generaleconomic conditions, changes insupply, changes indemandfor f theend products that aremadewith our products or increased competition fromother serviceproviders, could affect our earnings andoperating cashflo f ws.Our operating cash flowscan also be impacted by changes inour inventoryb r alances, whichare driven primarily by commodity prices,supply, demand and the operation of our assets
2024 vs.2023 -Cashflo f ws fromoperating activities, before changes inoperating assets and liabi a lities increased$868 million forthe year endedDec. 31, 2024, compared with thesameperiod in2023, due primarilyto the impact of the Magellan Acquisition inour Refined Products and Crude segment, as discussed in “Financial Results and Operating Infor f mation” offs f et partially byinsurance proceedsreceivedfro f mthe Medfor f dsettlement in2023.
Thechanges in operating assets and liabi a litiesdecreased operating cashflo f ws $43 millionfor f the year endedDec. 31, 2024, compared with an increase of $358 millionfor f thesameperiod in2023 This change is due primarilytochanges inour legal reserve liabi a lityasdiscussed inNote P of the Notes to Consolidated FinancialStatements inthisAnnual Report, changes inrisk management assets and liabi a lities and changes inaccountsreceivabl a eresultingfro f mthe receiptsofcashfro f mcounterpa r rties and from inventory, r bothofwhich varies from period to period, andwith changes incommodity prices. These changeswereoffset partially by changes inaccounts payable, which vary from period to period with changes incommodity prices andfrom f the timing of payments tovendors, suppl u iers andother thirdparties.
InvestingCashFlows
2024 vs.2023 -Cashused in investing activitiesfor f the year endedDec. 31, 2024, increased $208 million, compared with the same period in 2023, due primarilytocash paid to acquire EnLink and Medallion, capitalexpendituresrelated to our capi a tal projects in2024 and insurance proceedsreceivedfro f mthe Medfor f dsettlement in 2023, offs f etpartially by proceedsreceived fromthe interstate naturalgas pipelinedivestiture
FinancingCashFlows
2024 vs.2023 -Cash providedbyfin f ancing activities forthe year endedDec. 31, 2024, increased $18 million compared with thesameperiod in2023, due primarily to the increase in issuance of senior unsecurednotes associated withacquisitions, offse f t by increased repayments of long-term debt in 2024, including therepayment of the Viking and Guardian Term Loan Agreements and the outstanding borrowings on the EnLink Revolving Credit facility and the EnLink ARFacility, increased dividends paid in 2024 and the repurchaseof EnLink’sSeriesC Prefer f red Units
Cash Flow Analysis for the Year EndedDec.31, 2023 vs.2022 - The cashflow analysis forthe year endedDec. 31, 2023, compared with the year endedDec. 31, 2022, is included in Part II, Item 7, Management’s Discussion andAnalysisofFinancial Condition and Results of Operations of our 2023 Annual ReportonForm 10-K, which is availabl a evia the SEC’s website at www.sec.gov andour website at www.oneok.com
IMPACT OF NEWACCOUNTINGSTANDARDS
Informationabout a the impact of new accountingstandards is included inNoteA of the Notes to Consolidated Financial Statements in this Annual Report.
CRITICAL ACCOUNTINGESTIMATES
Thepreparationofour Consolidated FinancialStatements and relateddisclosures in accordance with GAAP requiresus to make estimates and assumptions with respect to values or conditions that cannot be knownwith certainty that affe f ct the reported amounts of assets and liabi a lities, and the disclosure of contingent assets and liabi a lities atthe date of the Consolidated FinancialStatements. Theseestimates and assumptions also affe f ct thereported amountsofrevenue andexpenses during the reporting period. Although we believe theseestimates and assumptions arereasonable, actua t lresults coulddiffe f rfro f mour estimates.
Thefol f lowing is a summary of our most criticalaccountingestimates, which aredefin f ed as thoseestimatesmost important to theportrayal of our financialconditionand results of operations andrequiring management’s most difficult, subj u ectiveor complexjudgment, particularly because of theneed to make estimatesconcerning the impact of inherently uncertain matters. We have discussed the developmentand selectionofour criticalaccountingestimateswith theAuditCommitteeofour Board of Directors. See NoteA of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f thedescription of our accounting policies.
Fair ValueEstimates inBusiness CombinationAccounting -Businesscombination accountingrequires thatassets and liabi a lities be recorded at theirestimatedfai f rvalue in connectionwith the initialrecognitionofthe transaction. Estimating the fair valueofassets and liabi a lities inconnectionwithbusinesscombinationaccountingrequiresmanagementtomakeestimates, assumptions andjudgments, and in some cases management mayalsoutilize third-party specialists to assist and advise on those estimates.
In ordertoestimate thefai f rvalue of assets acquired and liabilities assumed, we utilized widely acceptedvaluationtechniques that includeddiscounted cashflow andcostmethods.The discounted cashflo f wmethod utilizes assumptions that include,but arenot limited to,estimatedfut f turecashflo f ws, commodity margin growth rates, discount ratesappl a ied toestimatedfut f turecash flows, estimatedrates of return andestimatedcustomerattritionrates.Costmethods estimate thefai f rvalue of assets basedon theestimatedconstruc r tion or replacementcostofthe assets andrequires the useofvarious inputs and assumptions.While we believe we have made reasonable assumptions to estimate the fair value, these assumptions are inherently uncertain.An estimate of thesensitivity to changes inour assumptions is notpracticable giventhe numerous assumptions, and their interdependence, that can materially affe f ct our estimates.
Thepurchaseprice allocationrecorded ina businesscombinationmay change during the measurement period, which is aperiod not to exceed one year fromthe date of acquisition, as additional infor f mationabout a conditions existing atthe acquisition date becomes availabl a e.
See NoteB of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f additionaldiscussion of business combinations
Derivatives and Risk-management Activities -Weutilize derivatives toreduc d eour market-riskexposure tocommodity price and interest-rate fluctuations and to achieve more predictabl a ecashflo f ws. The accountingfor f changes inthe fair valueofa derivative instrum r entdepends on whether itqualifie f s and hasbeen designated as partofa hedging relationship When possible, we implement effe f ctive hedging strategies using derivativefin f ancial instruments thatqualifya f s hedgesfor f accounting purpos r es. We have not used derivative instrum r ents fortrading purpos r es.For a derivativedesignated as a cashflo f w hedge, the gain or loss froma change in fair valueofthe derivative instrum r ent isdefer f red inaccumulatedother comprehensive lossuntil thefore f casted transactionaffect f searnings, atwhich time thefai f rvalue of thederivative instrum r ent isreclassified into earnings
We assess hedging relationships at the inceptionofthe hedge andperiodically thereafte f r, to determinewhether the hedging relationshipis, and isexpected to remain, highly effective. We do not believe that changes inour fair valueestimatesofour derivative instrum r ents have amaterial impact on our resultsofoperations, as the majo a rity of our derivatives are accounted for
as effe f ctivecashflo f w hedges. However, ifa derivative instrum r ent is ineligible forcashflo f w hedge accounting or ifwefai f lto appropriately designate it as a cashflo f w hedge, changes infai f rvalue of thederivative instrum r entwouldberecorded currently in earnings.Additionally, ifa cashflow hedge ceases to qualify for hedge accounting treatment because it is no longer probabl a e thatthe forecasted transactionwill occur, thechange in fair valueofthe derivative instrum r entwouldberecognized in earnings.For more informationoncommodity pricesensitivity and a discussion of themarketriskof pricing changes, see Item 7A,Quantitative and Qualitative Disclosuresabout a Market Risk
See Notes A, D and E ofthe Notes toConsolidated FinancialStatements inthisAnnual Reportfor f additionaldiscussion of fair valuemeasurements andderivatives andrisk-management activities.
Impairment of Goodwill, Long-Lived Assets,Including Intangible Assets andEquity MethodInvestments -We assess our goodwill for impairmentat leastannually as of July 1, unlesseventsorchanges incircumstances indicate an impairment mayhaveoccurredbefor f e thattime. As part of our goodwill impairmenttest, we mayfir f stassess qualitativefact f ors(including macroeconomic conditions, industrya r nd market considerations, costfact f ors and overallfinancial performance) to determine whether it ismore likelythannot that thefai f rvalue of eachofour reporting units was less than its carrying amount Iffurt f her testing isnecessary, ora quantitative test iselected, weperform a Step1analysisfor f goodwill impairment.
In a Step1analysis, an assessment ismadebycomparing thefai f rvalue of areporting unitwith its carrying amount, including goodwill If thecarryingvalue of areporting unitexceeds its fair value, an impairment loss isrecognized in an amountequalto that excess, limited to the totalamount of goodwill allocated to that reporting unit.
We assess our long-lived assetgroups, including intangible assets,for f impairmentwhenevereventsorchanges incircumstances indicate thatanassetgroup’scarrying amount may not be recoverabl a e. An impairment is indicated if thecarrying amount of a long-lived assetgroup exceeds the sumofthe undiscounted future cashflo f ws expected to result fromthe use and eventual dispositionofthe assetgroup If an impairment is indicated, werecord an impairment lossequalto the differencebetween the carryingvalue and the fair valueofthe long-lived assetgroup
We evaluate equity method investments inunconsolidated affi f liatesfor f impairmentwhenevereventsorcircumstances indicate that there is another-than-temporaryl r oss invalue of the investment.Whenevidenceofloss invalue hasoccurred, we compare our estimate of fair valueofthe investment to thecarryingvalue of the investment to determinewhether an impairment has occurred. If theestimated fair value is less thanthe carryingvalue andweconsider thedecline invalue to be other-thantemporary, r theexcessofthe carryingvalue overthe fair value isrecognized in our consolidated financialstatements as an impairmentcharge.
Our impairmenttests require theuse of assumptions andestimates,suchas industrye r conomic factors and theprofitabi a lityof future businessstrategies. To estimate undiscounted future cashflowsoflong-lived assets we mayappl a yaprobabi a lityweighted approach that incorporates different assumptions andpotentialoutcomesrelated to theunderlying long-lived assets Theevaluation is performed at the lowest level forwhich separately identifia f ablecashflo f ws exist. To estimate thefai f rvalue of these assets, weuse twogenerally acceptedvaluation approaches, an incomeappr a oach and a marketapproach.Underthe income approach, our discounted cashflo f w analysis includes the following inputs thatare not readily availabl a e: a discount rate reflectiveofindustryc r ostofcapital, our estimatedcontract rates, volumes, operatingmargins, operating and maintenancecosts andcapitalexpenditures. Underthe marketapproach, our inputs include EBITDA multiples, whichare estimatedfrom f recent peer acquisition transactions, and forecasted EBITDA, which incorpor r ates inputssimilarto thoseusedunderthe income approach. Ifactua t lresults arenot consistent with our assumptions andestimatesorour assumptions andestimateschange due to new infor f mation, we may beexposed to future impairment charges.
See Notes A, F, G and O ofthe Notes toConsolidated FinancialStatements inthisAnnual Reportfor f additionaldiscussion of goodwill and intangible assets, long-lived assets and investments inunconsolidated affi f liates.
Depreciation Methods andEstimated Useful f LivesofProperty, Plantand Equipment -Our
property,plantand equipment aredepreciated using the straight-linemethod that incorporates management assumptions regarding usefuleconomic lives and residualvalues. As we place additionalassets in serviceoracquire assets as aresultofanacquisitionorasset purchase, our estimatesrelated to depreciationexpense havebecome more significantand changes inestimateduseful lives of our assets could have a materialeffect on our results of operations.Atthe time we place our assets in service, we believe such assumptions arereasonabl a e; however, circumstances maydevelop that wouldcause us to change these assumptions, which wouldchangeour depreciationexpenseprospectively Examples of such circumstances include changes in(i) competition, (ii) laws andregulations that limitthe estimatedeconomic life of an asset, (iii) technology that renderanassetobsolete, (iv) expected salvagevalues, (v)results of rate cases or rate settlements on regulated assets and (vi)for f ecasts of theremaining economic lifef f for theresource basins whereour assets are located, ifany. Forthe fiscalyears presented in this Form 10-K, no
changesweremade to the determinations of useful f lives that would have a materialeffect on the timing of depreciationexpense in future periods
See NoteF of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f additionaldiscussion of property,plant andequipment.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUTMARKET RISK
Ourexposure tomarketrisk, discussedbelow, includesfor f ward-looking statements andrepresents anestimate of possible changes infut f tureearnings that couldoccurassuming hypothetical future movements in interestrates or commodity prices within our derivativeportfol f io.Our viewsonmarketriskare not necessarily indicativeofactua t lresults that mayoccur anddo not representthe maximum possible gains and losses thatmay occursince actua t lgains and losseswill differfro f mthose estimatedbased on actualfluctuations in interest ratesorcommodity prices and the timing oftransactions.
We areexposed to market risk due to commodity price and interest-rate volatility. Marketrisk is the risk of loss arisingfrom f adversechanges inmarketrates andprices.Wemay usefin f ancial instruments, including forwardsales,swaps a , options and futures, to manage therisks of certain identifia f ableoranticipated transactions and achieve more predictabl a ecashflo f ws.Our risk-managementfunc f tion follows policies and procedur d es establ a ishedbyour Risk Oversight and Strategy Committee to monitorour naturalgas, NGL, Refin f ed Products, condensate and crude r oilmarketing activities and interest rates toensureour hedging activitiesmitigate market risks and comply withapproved thresholds or limits.Wedonot usefin f ancial instruments for trading purpos r es.
We utilize a sensitivity analysis modelto assess theriskassociated with our derivativeportfol f io. The sensitivity analysis measures thepotential change in fair valueofour derivative instrumentsbased upon a hypothetical10% movement in the underlying commodity prices or interest rates. In additionto these variables, thefai f rvalue of our derivativeportfol f io is influenced by fluctuations in thenotionalamountsofthe instruments and thediscount ratesused todetermine the present values.Because we enter into these derivative instrum r ents forthe purpos r eofmitigating the risks thataccompanycertain of our business activities, as describedbelow, the change in themarketvalue of our derivativeportfol f io would typically be offs f et largely bya corresponding gain or loss on the hedged item.
See NoteA of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f a discussion on our accounting policies forour derivative instrum r ents and the impact on our Consolidated FinancialStatements.
COMMODITYPRICERISK
As part of our hedging strategy, we usecommodity derivative financial instrum r ents andphysical-forwardcontracts described in Note E ofthe Notes toConsolidated FinancialStatements inthisAnnual Reporttoreduc d e the impact of near-term price fluctuations of naturalgas, NGLs, Refined Products, condensate and crude r oil.
Thefol f lowing tabl a epresents the effe f ct a hypothetical10% change in theunderlying commodity prices would haveonthe estimatedfai f rvalue of our commodity derivative instrum r ents as of thedates indicated:
Commodity Contracts
Dec.31, 2024
Dec.31, 2023 (Millions of dollars)
Refined Products, crude oiland NGLs $ 61 $67
Naturalgas 9 5
Totalchange in estimatedfai f rvalue of commodity contracts $ 70 $72 g y
Oursensitivity analysis represents an estimate of thereasonablypossible gains and losses thatwouldberecognized on our commodity derivativecontracts assuming hypothetical movements infut f turemarket prices and isnot necessarily indicativeof actua t lresults that mayoccur. Actual gains and lossesmay differfro f mestimatesdue d to actua t lflu f ctua t tions in marketprices, as wellas changes inour commodity derivativeportfol f io during the year
INTEREST-RATERISK
We areexposed to interest-rate risk through borrowings underour $3.5 BillionCreditAgreement, commercial pape a r program and long-term debt issuances.Futur t e increases in commercial pape a rrates or bond ratescouldexposeus to increased interest
costsonfut f tureborrowings.Wemay manage interest-rate risk through theuse of fixed-rate debt,flo f ating-rate debt, Treasury r locks and interest-rateswaps a
Treasuryl r ocks are agreements to pay thediffe f rencebetween thebenchmarkTreasuryr r ate and therate that isdesignated inthe termsofthe agreement. In the third quarter of 2024, we entered into $1.5 billionof Treasuryl r ocks to h hedge h thevariiabi a li lity of i interest payyments on apor i tion of our forecastedd b eb i tissuances Inthhe same quarter, weset l tled all of our $1.5 billillion Treasury r l lo k cksr l elat d ed to our d underw i ritten publiic offe f i ri g ng of $7.0 billiionseniiorunsecureddnotes asso i ciat d ed i wi h th h the EnLiinkkCont l rolliling Interest Acqui i si i tiona d nd Medallion Acqui i si i tion. l Alllofour Treasu y ry l lo k ckswer d edesignated ascashfllo f h wh d edgges. At Dec. 31, 2024, and Dec. 31,2023, we hadnooutstanding Treasuryl r ockagreements.
Interest-rate swaps are agreements to exchange interestpayments at some future point basedonspecified notionalamounts. EnLinkpreviously entered into $400 million interestrateswaps a associated with the EnLink Revolving Credit Facility and the EnLink ARFacility. In December2024, EnLink terminated the$400 million interestrateswaps a upon repaymentof outstanding amountsunderthe EnLinkRevolving Credit Facility and terminationofthe EnLink ARFacility At Dec. 31, 2024, andDec. 31, 2023, we hadnooutstanding interest-rateswapa a greements.
See Note E of the Notes to Consolidated FinancialStatements inthisAnnual Reportfor f more informationonour hedging activities.
COUNTERPARTY CREDITRISK
We assess thecreditworthinessofour counterpa r rtiesonanongoing basis and require security, including prepayments, letters of credit, liens andother formsofcollateral, when appropriate.Certain of our counterpa r rtiesmay be impacted by arelativelylow commodity priceenvironmentand couldexperience financial problems, whichcouldresult innonpaymentand/or nonperformance, whichcould impactadverselyour resultsofoperations.As a result of our recent acquisitions, wenow transact with thecounterpa r rtiesof EnLinkand Medallion. Asubstantial portionof EnLinkand Medallioncounterpa r rties are rated investment-grade by S&P or provide a letterofcreditorother collateral.
NaturalGas Gatheringand Processing -Our NaturalGas Gathering and Processing segmentderives fees forservices primarily frommajor and independent crude r oiland naturalgas producers, which include both large integrated and independent explorationand productioncompanies Inthissegment, our downstream commodity salescustomers areprimarily utilities, large industrialcompanies,marketing companies andour NGL affi f liate.We are not typically exposed to material credit risk withproducersunder feewithPOP contracts aswesellthe commodities and remit aportionofthe sales proceedsback to the producer less our contractua t lfee f s. In 2024, excluding EnLink, and2023, approximately 85% and 90%,respectively, of the downstream commodity sales inour NaturalGas Gathering and Processing segmentweremade tocustomers rated investmentgradebyS&P,appr a oved through comparable internal counterpa r rtyanalysisorweresecuredbyletters of credit or other collateral.
NaturalGas Liquids -Our NaturalGas Liquids segment’scounterpa r rties are primarilyNGL andnatur t al gasgathering and processing companies; majo a rand independent crude r oiland naturalgas productioncompanies; utilities; large industrial companies; naturalgasolinedistributors; propane distributors; municipalities; andpetrochemical,refin f ing and marketing companies. We charge fees to NGL andnatur t al gasgathering andprocessing counterpa r rties and NGLpipeline transportation customers. We arenot typically exposed to material credit risk on themajority of our exchange services fees, aswepurchase NGLsfro f mour gathering and processing counterpa r rties and deductour feefro f mthe amountsweremit. We also earn sales revenue on thedownstreamsales of Purity NGLs. In 2024, excluding EnLink, and2023, approximately 90% and 85%, respectivelyofthissegment’s commodity salesweremade tocustomers rated investment-grade by S&P, approved through comparable internal counterpa r rtyanalysisorweresecured by letters of credit or othercollateral. In addition, themajority of our NaturalGas Liquids segment’s pipeline tariffs f provide us theabi a lity to require security fromshippers.
NaturalGas Pipe i lines -Our NaturalGas Pipelines segment’scustomers areprimarily local naturalgas distributioncompanies, electric-generationfac f ilities, large industrialcompanies,municipalities, producers, processors andmarketing companies In 2024, excluding EnLink, and2023, approximately 90% of our revenues inthissegment were from customersrated investment gradebyS&P,appr a oved through comparable internal counterpa r rtyanalysisorweresecuredbyletters of credit or other collateral. In addition, themajority of our NaturalGas Pipelines segment’s pipeline tariffs f provide us theabi a lity to require security fromshippers
Refin e ed Products and Crude - Our Refin f ed Products and Crude segment’scustomers include refiners, wholesalers, retailers, traders, railroads, airlines andregionalfar f mcooperatives. In 2024, excluding EnLink and Medallion, and the fourthquarter of 2023,app a roximately 70% of our revenues inthissegment were from customersrated investment-grade by S&P, approved through comparable internal counterpa r rtyanalysisorweresecured by letters of credit, liens, orother collateral.
Report of Independent Registered Public AccountingFirm
To theBoard of Directors and Shareholders of ONEOK, Inc.
Opinions on theFin F ancial Stat t tements andInt I ternalCon C trol over Fina i ncialReporting
We have audited the accompanying consolidated balancesheetsofONEOK, Inc. and its subs u idiaries (the "Company") asof December31, 2024 and2023, and the relatedconsolidated statements of income, ofcomprehensive income, ofequity andof cashflo f ws foreach of the three years inthe period endedDecember31, 2024, including therelated notes (collectively refer f red to as the "consolidated financialstatements"). We also have audited the Company's internalcontroloverfin f ancial reporting as of December31, 2024, basedoncriteria established in Internal Contro t l- Integr e ated Framework r (2013) issued by the Committee of SponsoringOrganizations of the Treadway Commission (COSO)
In our opinion, theconsolidated financialstatementsrefer f red toabove a presentfai f rly, in allmaterialrespects, thefin f ancial positionofthe CompanyasofDecember31, 2024 and2023, and the results of its operations and its cashflo f ws foreach of the three years inthe period endedDecember31, 2024 in confor f mity withaccounting principlesgenerally accepted inthe United States of America Also in our opinion, the Company maintained, inall material respects, effe f ctive internalcontrolover financialreporting asofDecember31, 2024, basedoncriteria established in Internal Contro t l- Integr e ated Framework r (2013) issued by the COSO.
Basisf i for Opinions
The Company'smanagement isresponsible forthese consolidated financialstatements, formaintaining effe f ctive internal controloverfin f ancial reporting, andfor f its assessmentofthe effe f ctivenessofinternalcontroloverfin f ancial reporting, included in Management’s Reporton InternalControloverFinancialReportingappe a aring under Item9A. Ourresponsibility is to expressopinions on the Company’sconsolidated financialstatements and on the Company's internalcontroloverfin f ancial reportingbased on our audits.We are apublic accountingfir f mregisteredwith the Public Company AccountingOversight Board (United States) (PCAOB) and arerequired tobe independent with respect to the Company in accordance with the U.S. federalsecurities laws and theappl a icable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conductedour audits in accordance with thestandardsofthe PCAOB Thosestandardsrequire that we plan andperform the audits to obtainreasonabl a e assuranceabout a whetherthe consolidated financialstatements are freeofmaterialmisstatement, whetherdue d to errororfra f ud, andwhether effe f ctive internalcontroloverfin f ancial reporting was maintained in allmaterial respects.
Ouraudits of theconsolidated financialstatements includedperforming procedur d es to assess therisks of material misstatement of theconsolidated financialstatements, whetherdue d to errororfra f ud, andperforming procedur d es that respond to thoserisks Suchprocedur d es includedexamining, on a testbasis,evidenceregarding the amounts and disclosures inthe consolidated financialstatements. Ouraudits also includedevaluating the accounting principlesused and significantestimatesmadeby management, aswellasevaluating the overallpresentation of theconsolidated financialstatements. Ourauditofinternal controloverfin f ancial reporting includedobtaining an understanding of internal controloverfin f ancial reporting,assessing the risk that amaterialweakness exists, and testing and evaluating the design andoperatingeffectivenessofinternalcontrol based on the assessedrisk. Ouraudits also includedperformingsuchother procedur d es as we considered necessary in the circumstances.Webelieve that our audits provide areasonabl a ebasis forour opinions.
As described in Management’s Reporton InternalControloverFinancialReporting, management hasexcluded EnLink Midstream, LLC (“EnLink”) and Medallion Midstream, LLC (“Medallion”)fro f m its assessmentofinternalcontrolover financialreporting asofDecember31, 2024, because they were acquiredbythe Companyin purchasebusinesscombinations during2024 We have also excluded EnLinkand Medallionfro f mour auditofinternalcontroloverfin f ancial reporting. EnLink and Medallion areconsolidated subs u idiaries whose totalassets and total revenuesexcludedfro f mmanagement’s assessmentand our auditofinternalcontroloverfin f ancial reportingrepresent approximately 20% and 3% oftotalassets,respectivelyand approximately 7% and 1% oftotal revenues, respectively, of therelated consolidated financialstatement amounts asofand for the yearended December31, 2024
Defi
Acompany’s internalcontroloverfin f ancial reporting is aprocessdesigned to provide reasonable assuranceregarding the reliabi a lity of financialreporting and the preparationoffin f ancial statements forexternal purpos r es in accordance with generally accepted accounting principles. Acompany’s internalcontroloverfin f ancial reporting includes thosepolicies and procedur d es that (i)pertain to themaintenance of records that, in reasonable detail, accurately andfai f rly refle f ct the transactions and dispositions of the assets of thecompany; (ii) provide reasonable assurance thattransactions arerecorded as necessary to permit preparationoffin f ancial statements in accordance with generallyaccepted accounting principles, and thatreceipts and expendituresofthe companyare beingmadeonlyinaccordance withauthorizations of management anddirectorsofthe company; and (iii) provide reasonable assuranceregarding preventionortimely detectionofunauthorized acquisition, use, or dispositionofthe company’s assets thatcould have a materialeffect on thefin f ancial statements
Because of its inherent limitations, internalcontroloverfin f ancial reportingmay notpreventordetect misstatements.Also, projections of any evaluationofeffectiveness tofut f tureperiods aresubject to theriskthatcontrols may become inadequate because of changes inconditions, orthatthe degree of compliancewith thepoliciesor procedur d es maydeteriorate
Critical AuditM i Matte t rs
Thecriticalauditmattercommunicated below is a matter arisingfro f mthe current period auditofthe consolidated financial statements that wascommunicated or required tobecommunicated to the auditcommittee and that (i)relates to accountsor disclosures thatare material to theconsolidated financialstatements and (ii) involvedour especially challenging, subj u ective, or complexjudgments The communicationofcriticalauditmatters doesnot alter inany wayour opinion on theconsolidated financialstatements, takenas a whole, andwe are not,bycommunicating the criticalauditmatterbelow, providing a separate opinion on thecriticalauditmatteroronthe accountsordisclosures to which itrelates
Acquisi i tionofE o EnLinkMid M dstre t am,LLC –Val V uationofP o ipelines,Right g ts-of-Wa f ayand Processing Plants t
As described inNoteB to theconsolidated financialstatements, on October 15, 2024, the Company completed the acquisition of a controlling interest in EnLinkby acquiring GIP’s interest in EnLinkconsisting ofappr a oximately 43% of theoutstanding EnLink Units for $14.90 in cashperunitand 100% of theoutstanding limited liabi a lity companyinterests in themanaging member of EnLink for $300 million, fora totalcashconsiderationof$3.3 billion. The acquisitionresulted inthe recognitionof $11.4billionof property,plantand equipment(PP&E), a significant portionofwhich relates to pipelines,rights-of-w f ay, and processing plants The acquisitionwas accounted forusing the acquisitionmethod of accountingfor f businesscombinations, whichrequires, among otherthings, assets acquired and liabi a lities assumed toberecorded at theirfai f rvaluesonthe acquisition date.Asdisclosed by management, inorder to estimate thefai f rvalue of assets acquired and liabi a lities assumed, management utilized valuationtechniques that includeddiscounted cashflow andcostmethods. The discounted cashflo f wmethod utilizes assumptions that include,but arenot limited to, estimatedfut f turecashflo f ws, discount ratesappl a ied toestimatedfut f turecash flows and commodity margin growth rates. Cost methods estimate the fair valueofassets basedonthe estimatedconstruc r tion or replacementcostofthe assets andrequire theuse of various inputs and assumptions
Theprincipal considerations forour determinationthat performing procedur d es relating to the valuationof pipelines,rights-off way, andprocessing plants acquired inthe acquisition of EnLink is a criticalauditmatterare (i) the significant judgmentby management when developing thefai f rvalue estimate of thepipelines,rights-of-w f ay, and processing plants acquired; (ii) a high degree of auditor judgment, subj u ectivity, and effo f rt in performing procedur d es andevaluatingmanagement’ssignificant assumptions related todiscount rates and commodity margin growth ratesused inthe discounted cashflo f wmethod and estimatedconstruc r tion or replacementcostused inthe cost method; and (iii) the auditeffort involved the useof professionals with specialized skilland knowledge
Addressing thematter involvedperforming procedur d es andevaluating auditevidence inconnectionwith forming our overall opinion on theconsolidatedfin f ancial statements. These procedur d es included testing the effe f ctivenessofcontrols relating to the acquisitionaccounting, including controls overmanagement’svaluationofthe pipelines,rights-of-w f ay, and processing plants acquired. Theseprocedures also included, among others (i)reading the purchase agreement; (ii) testingmanagement’s process fordeveloping thefai f rvalue estimate of thepipelines,rights-of-w f ay, and processing plants acquired; (iii) evaluating the appropriatenessofthe discounted cashflo f ws andcostmethods used by management; (iv) testing the completeness and accuracy of underlying data used in thediscounted cashflow andcostmethods; and (v)evaluating the reasonablenessofthe significantassumptions used by management related todiscount rates and commodity margin growth ratesused inthe discounted cashflo f wmethod and the estimatedconstruc r tion or replacementcostused inthe cost method. Evaluating management’s assumptions related to the commodity margin growth rates involvedevaluating whether the assumptions used by management were reasonableconsidering (i) thecurrent andpast performance of EnLink and (ii) whetherthe assumptions were
consistent with evidence obtained inother areas of the audit. Profes f sionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriatenessofthe discounted cashflow andcostmethods and (ii) thereasonablenessofthe assumptions related todiscount rates, commodity margin growth rates, andestimatedconstruc r tionorreplacementcost.
s/ PricewaterhouseCoopers LLP
Tulsa, Oklahoma
Februa r ry 25, 2025
We have served as the Company’s auditorsince 2007
ONEOK, Inc. andSubsidiaries
CONSOLIDATED STATEMENTS OF INCOME
See accompanying Notes toConsolidated FinancialStatements.
ONEOK, Inc. andSubsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Othercomprehensive income (loss),net of tax
Change in fair
derivatives,net of tax of$16, $(46) and$(28),respectively
Derivative amountsreclassified to net income, netoftax of $5, $21 and$(60), respectively
Changes inbenefit f plan obligations andother,net of tax of$(2), $3 and$(21), respectively
See accompanying Notes toConsolidated FinancialStatements.
P)
Prefer f redstock, $0.01parvalue: authorized and issued 20,000 shares atDec. 31, 2024, and atDec. 31, 2023
Commonstock, $0 01parvalue: authorized 1,200,000,000 shares; issued 609,713,834 shares andoutstanding 583,110,633 shares atDec. 31, 2024; issued 609,713,834 shares andoutstanding 583,093,100
31, 2023
Treasurys r tock,atcost: 26,603,201 shares atDec. 31, 2024, and26,620,734 shares atDec. 31, 2023 (807) (677)
STATEMENTS
See accompanying Notes toConsolidated FinancialStatements.
A. SUMMARY OF SIGNIFICANTACCOUNTING POLICIES
Organizationand Nature of Operations -We are a corpor r ation incorpor r ated underthe laws of thestate of Oklahoma
OurNatur t al GasGathering and Processing segment providesmidstream services to producers inthe RockyM k ountainregion, the Mid-Continentregion, the PermianBasin region and the the NorthTexasregion. Rawnatur t al gas is typically gathered at thewellhead, compressed and transported throughpipelines toour processing facilities. Most rawnatur t al gas produced at the wellhead also contains amixture of NGL components, including ethane, propane, iso-butane, normalbutane and natural gasoline.Gatheredwellheadnatur t al gas isdirected to our processing plants to remove NGLs, resulting inresidue d naturalgas (primarily methane) Residue d naturalgas is then recompressed and delivered to naturalgas pipelines,storage facilities and end users. The NGLsseparated fromthe rawnatur t al gas are delivered throughNGLpipelines to fractionationfaci f litiesfor f further processing
In our NaturalGas Liquids segment, NGLs are extracted atour ownand third-party natur t al gas processing plants and are gathered by our NGL gathering pipelines.Gathered NGLs are directed to our downstream fractionators to be separated into Purity NGLs. Purity NGLs are stored or distributed to our customers, suchas petrochemical companies, propane distributors, diluentusers,ethanolproducers, refineries andexporters.Weprovide midstream services to producersofNGLs inthe Rocky k Mountain region, Mid-Continentregion, PermianBasin and GulfCoast region (including Louisiana) anddeliver thoseproducts to themarket. Our primary markets include the Mid-Continent inConway, Kansas, the GulfCoast in Mont Belvieu, Texas, Louisianaand theuppe u r Midwest The majo a rity of thepipeline-connected naturalgas processing plants in the Williston Basin, Oklahoma, Kansas and the Texas Panhandle aswellas a largenumber inthe PermianBasin,Barnett Shale, EastTexas and Louisianaregions areconnected to our NGL gatheringsystems
In our NaturalGas Pipelines segment, we receive residue naturalgas fromthird parties and our ownnatur t al gas processing plants and interconnecting pipelines Residue d naturalgas is transportedorstoredfor f endusers,suchas large industrial customers, naturalgas andelectricutilitiesserving commercialand residentialconsumers and can ultimately reach international markets through liquified naturalgas exports (Louisiana GulfCoast) and crossborder pipelines.Our assets areconnected to key supplyareas anddemandcenters, including exportmarkets in Mexico via Roadrunne r rand suppl u yareas in Canada and the United Statesvia our interstate and intrastatenatur t al gas pipelines and NorthernBorder, whichenabl a es us to provide essential naturalgas transportation andstorage services.Growing demand fromdata centers andcontinueddemandfro f m local distributioncompanies,electric-generationfaci f lities and large industrialcompanies suppor u t low-costexpansions thatposition us well to provide additionalservices to our customerswhenneeded
Our Refin f ed Produc d ts and Crude segment is principally engaged inthe transportation, storage and distributionof Refin f ed Products andcrude oil. As aresultofthe EnLink Acquisitions and the MedallionAcquisition, we are alsoengaged inthe gathering ofcrude oil Crude r oil pipelines gather and transportcrude oiltorefin f eries, exportfaci f lities and demand centers Throughout our distributionsystem, terminals playa key role infaci f litating productmovements and marketingbyproviding storage, distribution, blending andother ancillary services Products transportedonour Refined Products pipelinesystem include gasoline, distillates, aviationfue f land certain NGLs. Shipmentsoriginate on our Refined Products pipelinesystemfrom f direct connections to refineries or through interconnections with other pipelines or terminalsfor f transportationand ultimate distributiontoretailfue f ling stations, convenience stores, travelcenters,railroads, airpor r ts andother endusers.
BasisofPresentation -Our accompanying Consolidated FinancialStatements havebeen prepared pursuantto the rules and regulations of the SEC These statements have been prepared in accordance with GAAP
Consolidation -Our Consolidated FinancialStatements include our accounts and the accountsofour subs u idiaries overwhich we have controlorare theprimary beneficiary. r Thirdparty ownershipinterests in our controlledsubsidiaries arepresented as noncontrolling interests. All intercompany balances and transactions have been eliminated in consolidation.
We account for investmentswhere we controlthe investment using the consolidationmethod of accounting. Underthis method, we consolidate allassets and liabi a litiesofan investment on our Consolidated Balance Sheets and record noncontrolling interestsfor f theportion of the investment we do not own. We include allofthe investment’s results of operations on our Consolidated Statement of Income andrecord income attributable to noncontrolling interests forthe portionofthe investment that we do not own. Ournoncontrolling interests forthe year endedDec. 31, 2024, arecomposed of approximately 57% of outstanding EnLink Units we didnot own, Series B Preferred Units and thepartially ownedconsolidated subs u idiaries of EnLink
See Note I fordisclosures of our noncontrolling interests.
Investments inunconsolidated affi f liates are accounted forusing theequity method if we have theabi a lity to exercise significant influenceoveroperating andfin f ancialpoliciesofour investee. Underthismethod, an investment is carried at its acquisition cost and adjustedeachperiod forcontributions made, distributions received and our shareofthe investee’scomprehensive income The differencebetween thecarryingvalue of an investment andour shareofthe investment’s underlying equity in net assets is referred to as a basisdiffe f rence. Basisdiffe f rences related todepreciable or amortizable assets are amortized through equity in netearnings from investments. Thepremium or excesscostoverunderlying fair valueofnetassets is referred to as equity-method goodwill. Theportionofthe basisdiffe f rence that is attributable to our equity-method goodwill isnot amortized Impairment of equity investments isrecorded when the impairments areother than temporary. r These amounts are recorded as investments inunconsolidated affi f liatesonour accompanying Consolidated Balance Sheets.
See Note O fordisclosures of our unconsolidated affi f liates
Distributions paid to us fromour unconsolidated affi f liates are classified as operating activitiesonour Consolidated Statements of CashFlowsuntil thecumulativedistributions exceed our proportionate shareofincomefro f mthe unconsolidated affi f liate since the date of our initial investment The amount of cumulative distributions paid to us that exceedsour cumulative proportionate shareofincome ineachperiod represents aretur t nofinvestment and isclassified as an investing activity on our Consolidated StatementsofCashFlows
Variable InterestEntities(VIE) - We evaluate all legalentities inwhich we hold anownership interest to determine ifthe entity is a VIE.Variabl a e interests areownership interests inanentity that change with changes inthe fair valueofthe VIE’s assets.Whenweconclude that we hold an interest ina VIE, we must determine ifwe are theentity’s primary beneficiary. r A primaryb r enefic f iary is deemed to have thepower to direct the activitiesofthe VIE thatmostsignificantly impact the VIE’s economic performance. We consolidate any VIE whenwedetermine thatwe are theprimary beneficiary. r
Significant judgment isexercised in determining thata legalentity is a VIE and inevaluating our interest in a VIE.Weuse primarily a qualitative analysis todetermine ifanentity is a VIE.Weevaluateour interests ina VIE todeterminewhether we are the primary beneficiary. r We continually monitorour interests in legal entitiesfor f changes inthe design or activitiesofan entityand changes inour interests, including our status t as theprimary beneficiaryt r odetermine ifthe changesrequire us to revise our previous conclusions
See Note J forour VIE disclosures
Useof Estimates - The preparationofour Consolidated FinancialStatements and relateddisclosures in accordance with GAAP requires us to make estimates and assumptions with respect to values or conditions that cannot be knownwith certainty that affe f ct thereported amountsonour Consolidated FinancialStatements. Items thatmay be estimated include,but arenot limited to, the economic useful f lifeo f fassets,fai f rvalue of assets, liabi a lities and equity-method investments, obligations underemployee benefit plans, allowancefor f credit losses, expenses forservices receivedbut forwhich no invoice hasbeen received, provision for income taxes, including anydefer f red tax valuationallowances, theresults of litigation, environmentalremediation and various otherrecorded or disclosed amounts. In addition, aportionofour revenues and cost of sales and fuel arerecorded basedoncurrent month prices and estimatedvolumes. The estimates arereversed inthe following monthwhenwerecord actua t lvolumes
We evaluate our estimatesonanongoing basisusing historical experience, consultationwith experts and othermethods we consider reasonablebased on theparticular circumstances. Nevertheless, actua t lresults maydiffe f rsignificantly fromthe estimates. Any effectsonour financial positionorresults of operations fromrevisions to theseestimates are recorded inthe period when thefac f ts that give rise to therevisionbecome known.
Fair Value Measurements
-For our fair valuemeasurements, weutilizemarket prices, third-partypricing services, present valuemethods andstandard optionvaluationmodels to determine the pricewewouldreceive fromthe sale of an assetorthe transfer f of a liabi a lityinanorderly transactionatthe measurementdate. We measure the fair valueofa group of financialassets and liabi a litiesconsistentwith how amarket participantwouldprice thenet risk exposure atthe measurementdate.
Most of thecontracts inour derivativeportfol f io areexecuted in liquidmarkets whereprice transparency exists.Our financial commodity derivatives areprimarily settled througha NYMEX or Intercontinental Exchange clearingbrokeraccount with daily margin requirements. We validateour valuation inputswiththird-party informationand settlement prices fromother sources, where available.
We compute the fair valueofour derivativeportfol f io by discounting the projected future cashflo f ws fromour derivative assets and liabi a lities to presentvalue using interest-rate yields to calculate present-valuediscount factorsderived fromthe implied forward SOFR yield curve. Thefai f rvalue of our forward-starting interest-rate swaps isdetermined usingfin f ancial models that incorporate the impliedfor f ward SOFRyieldcurve forthe same period as thefut f ture interest-rate swap settlements. We consider current market data in evaluating counterpa r rties’, aswellasour own, nonperformance risk,net of collateral, by using counterpa r rty-specificbond yields.Although we useour best estimates todetermine the fair valueofthe derivativecontractswe have executed, theultimatemarket prices realized coulddiffe f rmaterially fromour estimates.
Fair Value Hierarchy y -Ateachbalance sheetdate, we utilize afai f rvalue hierarchytoclassify fair value amountsrecognizedor disclosed inour financialstatementsbased on theobservabi a lityofinputsused toestimate such fair value. The levelsofthe hierarchyare describedbelow:
• Level1- fair valuemeasurements are basedonunadjusted quoted prices for identical securities inactivemarkets Thesebalances arecomposed predominantly of exchange-tradedderivativecontractsfor f naturalgas, Refin f ed Products andcrude oil.
• Level2- fair valuemeasurements are basedonsignificantobservabl a epricing inputs, including quoted prices for similarassets and liabi a lities inactivemarkets and inputsfro f mthird-party pricingservices suppor u tedwith corroborative evidence. These balances arecomposed of exchange cleared and over-the-counter derivatives to hedge naturalgas, NGLs, Refined Products andcrude oil price risk andover-the-counter interest-rate derivatives
• Level 3 - fair valuemeasurements are basedon inputs thatmay include one or more unobservabl a e inputs.
Determining the appropriate classificationofour fair valuemeasurements within thefai f rvalue hierarchy requires management’s judgmentregarding thedegree towhich market data is observabl a eorcorroborated by observabl a emarketdata We categorizederivatives basedonthe lowest level input that is significantto the fair valuemeasurement in its entirety.
See NoteD forour fair valuemeasurementsdisclosures.
Cash andCashEquivalents -Cashequivalentsconsistofhighlyliquid investments, whichare readily convertible into cash and haveoriginalmatur t itiesofthree months or less.
Revenue Recognition - Revenues are recognizedwhencontrolofthe promised goods or services is transfer f red toour customers inanamount that reflects the considerationweexpect to be entitled toreceive in exchange forthose goods or services.Our paymentterms vary by customer andcontract type, including requiring paymentbefor f eproducts or services are delivered to certain customers. However, the termbetween customer prepayments, completionofour performance obligations, invoicing andreceipt of paymentdue d is generally not significant.
Performance Obligations and Revenue Sources g - Revenue sources aredisaggregated in Note S and arederived fromcommodity sales and services revenues, as describedbelow:
Commodity Sales(allsegments) -Wecontract to deliver residue naturalgas, unfra f ctionated NGLs and/or Purity NGLs, RefinedProducts, condensate and crude r oiltocustomers ata specified deliveryp r oint.Our sales agreements may bedailyor longer-termcontractsfor f a specified volume. We consider thesale and deliveryo r feach unitofa commodity an individual performance obligationas the customer is expected to control, acceptand benefitfro f meach unit individually.Werecord revenue when thecommodity is delivered to thecustomeras thisrepresents the point in time when controlofthe produc d t is transfer f red to the customer Revenue is recorded basedonthe contracted selling price, which isgenerally index-based and settleddaily or monthly. Occasionally, wesellunfra f ctionated NGLs tocustomers at an index-basedprice less third-party fractionation costs. Thesecosts are included as a reductiontocommodity salesrevenue
Services
Feewith POPc O ontra t ctsw t ithp t roducer take-in-kind right g ts (NaturalGas Gatheringand Processing segm e ent) - Underthis type of contract, wedonot controlthe stream of unprocessednatur t al gas thatwereceive at thewellhead due to theproducer’s takein-kindrights. We purchase aportionofthe rawnatur t al gasstream, chargefees f for providing midstream services, which include gathering, treating, compressing andprocessing our customer’s naturalgas.After performing these services, weretur t n certain commodities to the producer,sellthe remaining commodities and remit aportionofthe commodity sales proceeds to the producer less our contractua t lfee f s. Our performance obligationbeginswith deliveryo r fraw naturalgas to our system This service is treated as one performance obligationthat issatisfied overtime.Weuse theoutput t method basedondeliveryo r f producttoour system as themeasure of progress, as our services areperformed simultaneously
Transpor s tation, exchange and terminal servicecontra t cts t (NaturalGas Liquids and Refin e ed Products and Crude segm e ents)Underthis type of contract, wechargefees f for providing midstream services, which mayinclude a bundled combinationofone or more of thefol f lowing services:gathering, transporting, terminalling, fractionationorother ancillary services.Our performance obligationbeginswith deliveryo r f producttoour system These services representa series of distinct services that are treated as one performance obligationthat issatisfied overtime.Weuse theoutput t method basedondeliveryo r f productto our system as themeasure of progress, as our services areperformed simultaneously.For transportationservices undera tariff on our transportation pipelines, fees arerecorded when theproductreaches its destination. We have certain contracts that require counterpa r rties toshipa minimumvolumeoveranagreed-upon time period, whichare contracted as minimumdollaror volumecommitments. Revenue pursuantto these take-or-paycontracts is initially deferred and subs u equently recognized when thecustomers utilize their committedvolumes or when the likelihood of meeting the minimumvolumecommitment becomes remote
Storage contra t cts t (NaturalGas Liquids,Refin f ed Products and Crude and NaturalGas Pipe i lines segm e ents) - Wereserve a stated storagecapacityand inje n ct/w t ithdraw/store commodities forour customer.As these services representa stand-ready obligation providedona daily basisoverthe lifeo f fthe agreement, thefix f ed capacity reservationfees f are allocated andevenly recognized in revenue overthe contract term.Capacity reservation fees that vary basedona stated or impliedeconomic index andcorrespond with thecosts to provide our services arerecognized in revenue as invoiced to our customers. We use the output t method basedonthe passage of time to measuresatisfactionofthe performance obligationassociated with our daily stand-ready services.Other fees arerecognized in revenue as thoseservices areprovided and aredependent on thevolume moved, which is atour customer’s discretion.
Firm servicetra t nspor s tationcontra t cts t (NaturalGas Pipe i lines segm e ent) - Wereserve a stated transportation capa a cityand transportcommoditiesfor f our customer The capacity reservation and transportationservices areconsidered a bundled service, as we integrate them intoone stand-readyobligation providedona daily basisoverthe lifeo f fthe agreementand satisfied over time.Fixed capacity reservationfees f are allocated andevenly recognized in revenue.Capacity reservationfees f that vary based on a statedor impliedeconomic index and correspond with thecosts to provide our services arerecognized in revenue basedon a daily effe f ctivefee f rate Ifthe capa a city reservationfees f vary solely as a contract featur t e, contractassets or liabi a lities are recorded forthe differencebetween the amount recorded in revenue and the amount billed to the customer Transportationfees f arerecognized in revenue as thoseservices areprovided and aredependent on thevolume transportedbyour customer, which is at our customer’s discretion. We use the output t method basedonthe passage of time to measuresatisfactionofthe performance obligationassociated with our daily stand-ready services
Interruptible transpor s tation contra t cts t (NaturalGas Pipe i linessegme g nt) - We agree to transportnatur t al gasonour pipelines between thecustomer’s specified nominated-receipt anddeliveryp r oints ifcapacity is availabl a e after satisfyingfir f m transportationservice obligations The transaction price is basedonthe transportationfees f times the volumes transported. We use the output t method basedondeliveryo r f productto the customer to measuresatisfactionofthe performance obligation. The totalconsiderationfor f delivered volumes is recorded in revenue at the time of delivery, r when thecustomerobtains control
Many of thecontract typesdescribed above containadditionalfees f or charges payable by customersfor f nonperformance (e g., minimumvolumecommitmentsor productspecifications), whichare considered to be variable consideration. Thesefee f s and charges are not recorded until it is probabl a e thata significantreversalofthe associated revenue will not occur.
Receivables from Customers r -Substantially allofthe balances in accountsreceivabl a eonour Consolidated Balance Sheet at Dec. 31, 2024, relate to customer receivabl a es.Substantiallyall of thebalances in accountsreceivabl a eonour Consolidated Balance Sheet atDec. 31, 2023, related tocustomerreceivabl a es,excluding the insurance receivabl a erelated to the legal proceeding described in Note P.
See Note R forour revenue disclosures.
Contract Assets andContract Liabilities -Contractassets andcontract liabilities arerecordedwhenthe amount of revenue recognized froma contract witha customerdiffe f rs from the amount billed to the customer andrecorded in accountsreceivabl a e. Ourcontractassetbalances atthe beginning andend of theperiodprimarily relate to our firm service transportationcontracts with tieredrates, which arenot material.Our contract liabi a lities primarily representdefer f redrevenue on Refined Products and crude r transportationcontracts and NGL storagecontractsfor f whichrevenue is recognized overa one-yearterm, anddefer f red revenue on contributions in aidofconstruc r tionreceivedfro f mcustomers forwhich revenue is recognized overthe contract periods, which rangefro f mone year to 17 years, contract liabilities are not material.
Cost of Salesand Fuel -Costofsales andfue f l primarily includes(i) thecostof purchased commodities, including naturalgas, NGLs, Refin f ed Products, condensate and crude r oil, (ii) fees incurredfor f third-partytransportation, fractionationand storageof
commodities,(iii) fuel andpower costs incurred tooperate our ownfaci f lities thatgather, process, transportand store commodities,(iv)productgains and losses and (v) anoffse f tfro f mthe contractua t lfees f deductedfro f mthe cost of purchased commoditiesunderthe contract typesbelow:
Feewith POPc O ontracts with no producer take-in-kind right g ts(Na ( turalGas Gatheringand Processing segm e ent) - Wepurchase rawnatur t al gas and charge contractua t lfees f for providing midstream services, which include gathering, treating, compressing andprocessing theproducer’s naturalgas.After performing these services, wesellthe commodities and return aportion of the commodity sales proceeds to theproducer less our contractua t lfees f
Purchasewith fee (NaturalGas Liquids segm e ent) - Underthis type of contract, wepurchaseraw, unfra f ctionated NGLs atan indexprice andchargefee f sfor f providing midstream services, which mayinclude a bundled combinationofgathering, transporting and/or fractionation
Operationsand Maintenance -Operations andmaintenance primarilyincludes(i) payrolland benefitcosts,(ii) third-party costsfor f operations,maintenance and integrity management,regulatoryc r ompliance and environmentaland safety, and (iii) otherbusiness-relatedservice costs.
Accounts Receivable -Accountsreceivable representvalid claims againstnonaffiliatedcustomers for products sold or services rendered. We presentaccountsreceivabl a enet of an allowancefor f credit losses torefle f ct thenet amount expected to be collected.We assess the creditworthiness of our counterpa r rtiesonanongoing basis and require security, including prepayments and otherfor f ms of collateral, when appropriate.Outstanding customer receivabl a es arereviewedregularly for possiblenonpayment indicators, and allowances forcredit losses are recorded basedupon u management’s estimate of collectability, current conditions andsupportabl a efor f ecasts at each balancesheet date.AtDec. 31, 2024, our allowancefor f credit losseswas not material
Inventory - The values of current NGLs, naturalgas, Refin f ed Produc d ts andcrude oil instorage aredeterminedusing the lower of weighted-average cost or netrealizable value. Materials and suppl u ies are valued ataveragecost.
Commodity Imbalances - Inour NaturalGas Gathering and Processing, NaturalGas Liquids and Natur t al Gas Pipelines segments, commodity imbalancesrepresent amounts payable or receivabl a efor f NGL exchange contracts and naturalgas pipeline imbalances and are valued at marketprices.Underthe majo a rity of our NGL exchange agreements, wephysically receive volumes of unfra f ctionated NGLs, including theriskofloss and legaltitle to such volumes,fro f mthe exchange counterpa r rty. In turn, wedeliver Purity NGLsback to thecustomerand charge gathering, transportationand fractionationfees f To the extent that thevolumes we receiveundersuchagreements differfro f mthosewedeliver, werecord anet exchange receivabl a eor payabl a epositionwith thecounterpa r rties. Thesenet exchange receivabl a es andpayables are generally settledwith movementsof Purity NGLsratherthanwith cash. Naturalgas pipeline imbalances aresettled incashor in-kind, subj u ect to the terms of the pipelines’ tariffso f rbyagreement
In our Refined Products and Crude segment, commodity imbalances representdiffe f rences in productvolumes in our pipeline systems and terminals, compared to thevolumes of our customers’ inventories, as we do not take legaltitle to themajorityof theproducts on our pipeline systems and terminals. To theextentthe productvolumes differfro f mthe volumes of our customers’ book inventories, we record adju d stments toour product inventories. When productshortagescause anet short inventoryp r osition ina product, a liabi a lity is recorded basedonmarket prices Refin f ed Products andcrude oil imbalances are generally settled in-kind throughproduct purchases andsales.
Derivatives and Risk Management -Weutilizederivatives to reduceour market-riskexposure tocommodity price and interest-rate fluctuations and to achieve more predictabl a ecashflo f ws.Werecord allderivative instrum r ents at fair value, with theexceptionofnormal purchases andnormalsales transactions that areexpected to result in physical delivery. r Commodity price and interest-rate volatility may have a significant impactonthe fair valueof derivative instrum r ents as of a given date The accountingfor f changes inthe fair valueofa derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationshipand, if so, the reason for holding it
The table belowsummarizes the various ways in whichwe account forour derivative instrum r ents and the impact on our Consolidated FinancialStatements:
Recognitionand Measurement
Accounting Treatment
Normalpurchases and normalsales
BalanceSheet
-Fairvalue not recorded
Mark-to-market - Recorded at fair value
Cashflow hedge
Fair value hedge
- The gain or loss on the derivative instrum r ent isreported initially as a component of accumulatedother comprehensive income (loss)
- Recorded at fair value
-Change in fair valueofthe hedged item is recorded as an adju d stment to book value
Income Statement
-Change in fair valuenot recognized in earnings
- Change in fair valuerecognized in earnings
- The gain or loss on thederivative instrum r ent is reclassified out of accumulatedother comprehensive income (loss) into earnings when thefor f ecasted transactionaffectsearnings
-The gainor lossonthe derivative instrum r ent is recognized in earnings
-Change in fair valueofthe hedged item is recognized in earnings
To reduceour exposure toflu f ctua t tions in naturalgas, NGLs, Refined Products, condensate and crude r oil prices, weperiodically enter intofut f tures,for f ward purchases andsales, options or swap transactions in orderto hedge anticipated purchases andsales of naturalgas, NGLs, Refined Products, condensate and crud r eoil Treasuryl r ocks and interest-rate swaps are used fromtime to time to manage interest-rate risk.Undercertain conditions, wedesignate our derivative instrum r ents as a hedge of exposure to changes infai f rvaluesorcashflo f ws.Wefor f mally documentall relationships between hedging instruments and hedged items, as wellas risk-managementobjectives andstrategiesfor f undertakingvarious hedge transactions, and methods forassessing and testing correlation and hedge effe f ctiveness. We specific f ally identify thefor f ecasted transactionthat has been designated as the hedged item ina cashflo f w hedge relationship. We assess hedging relationships at the inceptionofthe hedge, and periodically thereafte f r, to determinewhether the hedging relationshipis, and isexpected to remain, highly effective. We also documentour normal purchases andnormalsales transactions that we expect to result in physical deliverya r nd that we elect to exempt from derivative accounting treatment
Therealized revenues andpurchasecosts of our derivative instrum r ents not considered held fortrading purpos r es andderivatives thatqualifya f snormal purchases or normalsales that areexpected to result in physical deliverya r re reportedona grossbasis
Cashflowsfro f mfut f tures,for f wards, options andswaps a that are accounted foras hedges are included inthe same categorya r s the cashflo f ws fromthe related hedged items in our Consolidated Statements of CashFlows.
See Notes D and Efor f disclosuresofour fair valuemeasurements and risk-managementand hedging activities, respectively
Property, Plant andEquipment -Our properties are stated at cost, including AFUDC andcapitalized interest Insomecases, thecostofregulated property retired or sold, plusremovalcosts, lesssalvage, ischarged to accumulateddepreciation. Gains and lossesfro f msales or transfer f sofnonregulated propertiesoranentireoperating unitorsystemofour regulated properties are recognized in income. Maintenance andrepairs arecharged directly to expense.
The interest portionofAFUDC andcapitalized interest representthe cost of borrowedfunds f used to financeconstruc r tion activitiesfor f regulated andnonregulated projects, respectively We capitalize interestcosts during the construc r tionorupgr u ade of qualifyi f ng assets. These costs are recorded as areduc d tion to interest expense. Theequity portionofAFUDC represents the capitalizationofthe estimated average cost of equity used during the construc r tionofmajor projects and is recorded in thecost of our regulatedproperties and as a creditto the allowancefor f equity funds used during construc r tion.
Our properties are depreciatedusing thestraight-linemethod overtheir estimateduseful lives.Generally, weestimate the useful f livesofindividualassets or applydepreciationrates to functionalgroups of propertyhavingsimilareconomic lives. We periodically conductdepreciationstudies to assess theeconomic lives of our assets.For our regulated assets, these depreciation studi t es arecompleted as apartofour rate proceedings or tariff filings, and thechanges ineconomic lives, ifappl a icable, are implemented prospectivelyasofthe approvedeffectivedate. Forour nonregulated assets, ifit isdetermined that theestimated economic lifec f hanges, thechanges aremadeprospectively.Changes inthe estimatedeconomic lives of our property,plantand equipmentcould have a material effe f ct on our financial positionorresults of operations
Property,plantand equipmentonour Consolidated Balance Sheets includesconstruc r tionwork in processfor f capital proje o cts that have notyetbeen placed inservice and therefore arenot being depreciated.Assets are transferredout of construc r tionwork in processwhentheyare subs u tantially complete andready fortheir intendeduse
See NoteF forour property,plantand equipmentdisclosures
Impairment of Goodwill and Long-LivedAssets,Including Intangible Assets andEquity MethodInvestments -We assess our goodwill for impairmentat leastannually as of July 1, unlesseventsorchanges incircumstances indicate an impairmentmay have occurredbefor f e thattime.Our qualitative goodwill impairmentanalysis performed as of July 1, 2024, didnot result in an impairmentchargenor didour analysis reflect any reporting units at risk, and subs u equent to that date,no event has occurred indicating thatthe impliedfai f rvalue of our reporting units are less thanthe carryingvalue of theirnetassets
Goodwill -As partofour goodwill impairmenttest, we assess qualitativefact f ors(including macroeconomic conditions, industrya r nd market considerations, costfact f ors and overallfinancial performance) to determinewhether it wasmore likely than not that thefai f rvalue of ourreporting units are less thantheir carrying amount Iffur f ther testing isnecessary, ora quantitative test iselected, weperform a Step1analysis. In a Step1analysis, an assessment ismadebycomparing thefai f r valueofa reporting unitwith its carrying amount, including goodwill If thecarryingvalue of areporting unitexceeds its fair value, an impairment loss isrecognized in an amountequalto thatexcess, limited to the totalamount of goodwill allocated to that reporting unit.
To estimate thefai f rvalue of our reporting units, weuse twogenerally acceptedvaluationappr a oaches, an incomeapp a roachand amarketapp a roach, using assumptions consistent with amarket participant’s perspective. Underthe income approach, weuse anticipated cashflo f ws overa period of years plus a terminal value and discount these amounts to their presentvalue using appropriate discount rates. Thefor f ecastedcashflo f ws arebased on probabi a lity weighted-average possiblefut f turecashflo f ws for areporting unitovera period of years. Underthe marketapproach, weappl a yEBITDAmultiples tofor f ecasted EBITDA. The multiplesused are consistent with recentmarkettransactions
Long-lived assets -We assess our long-lived assetgroups for impairmentwhenevereventsorchanges incircumstances indicate that an assetgroup’scarrying amount may not be recoverabl a e. An impairment is indicated if thecarrying amount of a longlived assetgroup exceeds the sumofthe undiscounted future cashflo f ws expected to result fromthe use and eventual dispositionofthe assetgroup If an impairment is indicated, werecord an impairment lossequalto the differencebetween the carryingvalue and the fair valueofthe long-lived assetgroup
Investments in unconsolidat d ed affilia f tes - The impairment test forequity-method investmentsconsiderswhether thefai f rvalue of theequity investment as a whole, not theunderlying netassets, hasdeclined andwhether that decline isother than temporary. r Therefor f e, we periodically evaluate the amount at whichwecarry our equity-method investments todetermine whethercurrent events or circumstances warrant adju d stments toour carryingvalues.
See Notes F, G and Ofor f our disclosures and related impairmentcharges related to long-lived assets,goodwill and intangible assets and investments inunconsolidated affi f liates, respectively.
Leases -We leasecertain buildings, warehouses, office space, land andequipment, including pipeline equipment, pipeline capacity,railcars and informationtechnology equipment. In addition, as aresultofthe EnLink Controlling Interest Acquisition, we acquired lessee arrangements that primarily include offi f ce space, compression, fieldequipmentand land. Acquiredoffice space lease arrangements typically include variable leasecostrelated to utility expenses, which aredetermined basedonour pro-rata shareof buildingexpenses eachmonthand areexpensed as incurred. Our leasepayments are generally straight-line and theexerciseofleaserenewal options, which vary in term, is atour sole discretion. We include renewal periods in a lease term ifwe are reasonablycertain to exercise availabl a erenewal options.Our lease agreements do not include any residualvalue guarantees or material restrictivecovenants. We applythe short-term policy election, whichallows us to exclude fromrecognition leaseswithan initialtermof 12 months or less. Ourweighted-average discount ratesrepresent therate implicit in the lease or our incrementalborrowing rate fora term equalto the remaining termofthe lease. Ourfin f ance lease assets and liabi a lities arenot material
Our lessorarrangements primarily include capa a city,storage andservice contracts and arenot material.We havemade an accounting policy electionfor f bothour lessee and lessorarrangements tocombine lease and non-leasecomponents. This election isappl a ied to all of our lease arrangements asour non-leasecomponentsdonot result in significanttiming diffe f rences in therecognitionofrentalexpenses or income
Regulation -Depending on thespecificservice provided, our naturalgas transmission pipelines, NGL, Refin f ed Products and crude r oil pipelines andcertain naturalgas storagefaci f lities are subj u ect to rate regulationand/or accountingrequirementsbyone or more of theFERC, Oklahoma Corpor r ationCommission, Kansas CorporationCommission, Louisiana Public Service Commission, Railroad Commission of Texas, Wyoming Public Service Commission and Colorado Public Utilities Commission Accordingly,portions of our NaturalGas Liquids and Natur t al Gas Pipelines segments follow the accounting and reportingguidancefor f regulated operations as definedpursuanttoFinancial Accounting StandardsBoard’s (FASB) Accounting StandardsCodification980, Regulated Operations.During the rate-making processfor f certain of our assets,regulatory r
authoritiesset thefra f mework forwhatwecan charge customersfor f our services andestablishthe mannerthatour costs are accounted for, including allowing us to deferrecognition of certain costs and permittingrecovery of the amounts through rates overtime asopposed to expensingsuchcosts as incurred. Certainexamplesoftypesofregulatoryg r uidance include costsfor f fuel and losses, acquisitioncosts, contributions in aidofconstruc r tion, chargesfor f depreciation, and gains or losseson dispositionofassets This allows us to stabilizerates overtime rather than passingsuchcosts on to thecustomerfor f immediate recovery.Actions by regulatorya r uthoritiescould have aneffect on the amountswemay charge our customers. Anydiffe f rence in the amountrecoverabl a e and the amount deferred isrecorded as incomeorexpense atthe time of theregulatorya r ction. A write-offo f fregulatorya r ssets andcosts not recoveredmay be required ifall or aportionofthe regulated operations have rates that areno longer(i) establ a ishedbyindependent, third-party regulators and (ii) setat levels thatwill recoverour costswhen considering the demand andcompetitionfor f our services
Retirementand OtherPostretirementEmployee Benefit f s -We have a legacy ONEOK definedbenefit f retirement plan covering certain employees andfor f meremployees, aswellas two definedbenefit f pension plans fornon-union andunion legacy Magellanemployees.Wesponsor legacy ONEOK welfar f eplans thatprovide postretirementmedical and lifei f nsurancebenefit f s to certain employees hiredprior to 2017 whoretirewithat leastfive yearsofservice of full-time consecutiveservice.We also sponsor thepostretirementbenefit f obligations, which covercertain legacy Magellanemployees The expense and liability related to these plans iscalculatedusing statistical andother factors thatattemptto anticipatefut f tureevents. Thesefact f ors include assumptions about thediscount rate,expected return on plan assets,rateoffut f turecompensation increases, interest credit rating, mortality andemployment length. In determining the projected benefitobligations andcosts, assumptions can change from period to period and may result inchanges inthe costs and liabi a litieswerecognize.
See Note M forour retirement andother postretirementemployeebenefits f disclosures.
Income Taxes -Defer f red income taxes areprovidedfor f thediffe f rencebetween thefin f ancial statementand income tax basis of assets and liabi a lities and carryforward items basedon income tax laws andrates existing atthe time the temporaryd r iffe f rences areexpected to reverse. Generally, the effe f ct of a change in tax rates on deferred tax assets and liabi a lities isrecognized in income in theperiod that includes the enactment date of theratechange
We utilize a more-likely-than-notrecognitionthreshold and measurementattributefor f thefin f ancial statementrecognition and measurementofa taxpositionthat is taken or expected to be taken ina tax retur t n. We reflectpenalties and interestas part of income tax expense as they become applicable fortax provisions that do not meet themore-likely-than-not recognition threshold and measurementattribute. Forallperiods presented, we hadnouncertain taxpositions that required the establ a ishmentofa material reserve.
We utilize the “with-and-without”appr a oach for intra-period tax allocationfor f purpos r es of allocating total tax expense (or benefit) forthe year among thevarious financialstatement components.
We file numerous consolidated andseparate income tax returnswithfed f eral tax authoritiesofthe United States along with the tax authoritiesofseveral states EnLink Midstream Operating,LP and EnLink Partners are bothunderfed f eralauditbythe InternalRevenue Service forthe calendaryearsended Dec. 31, 2019, andDec. 31, 2020, andstatute waivers are in place for these years. At this time, webelieve the audits will closewithout amaterial impact Noother ONEOK entity is underany United States federalaudits or statut t ewaivers at this time.
See Note N forour income tax disclosures.
Asset Retirement Obligations -Assetretirementobligations represent legal obligations associated with theretirementoflonglived assets that result fromthe acquisition, construc r tion, developmentand/or normaluse of the asset. Certainofour gathering andprocessing andpipelinefac f ilities are subj u ect to agreements or regulations that give rise to our assetretirementobligations forremovalorother disposition costs associated with retiring the assets in place upon thediscontinueduse of the assets.We recognize thefai f rvalue of a liabi a lity foranassetretirementobligation inthe period when it is incurred ifa reasonableestimate of thefai f rvalue canbemade. We arenotable to estimate reasonablythe fair valueofthe assetretirementobligations for portions of our assets, primarily certain pipeline assets, because the settlement dates are indeterminable givenour expected continueduse of the assets withpropermaintenance.Weexpect our pipeline assets,for f whichwe are unable toestimate reasonablythe fair valueofthe assetretirementobligation, will continue in operationas long as suppl u yand demand fornatur t al gas, NGLs, Refin f ed Products andcrude oilexist.Based on thewidespread useofthese products in themedical, transportation, synthetics and agriculture industries, as wellas forresidentialand industrialcustomers andelectricgeneration, we expect suppl u yand demand to existfor f thefor f eseeable future
Forassets in whichwe are able to make an estimate, the fair valueofthe liabilityis added to the carrying amount of the associated asset, and this additionalcarrying amount is depreciatedoverthe lifeo f fthe asset. The liabi a lity is accreted at theend of eachperiod through charges tooperatingexpense. If theobligation issettledfor f an amount otherthanthe carrying amount of the liabi a lity, wewill recognize a gainor lossonsettlement Th d edepre i ciatiiona d nd accretiio e n xpense are immaterial to our Cons l olidat d ed i FinanciiallStatements.
Contingencies -Our accountingfor f contingenciescovers a variety of business activities, including contingenciesfor f legaland environmentalexposures.We accrue r thesecontingencieswhenour assessments indicate that it is probabl a e thata liability has been incurredoranassetwill not be recovered, and anamount can be estimatedreasonably We expense legal fees as incurred andbaseour legal liabi a lity estimatesoncurrently availabl a efac f ts andour estimatesofthe ultimate outcome or resolution.
Accrua r ls forestimated lossesfro f menvironmentalremediationobligations generally arerecognized no laterthancompletionof aremediationfeas f ibility study. t Ourexpendituresfor f environmentalevaluation, mitigation, remediationand compliance to date have not been material in relationtoour financial positionorresults of operations, and our expendituresrelated to environmentalmatters didnot have amaterialeffect on earnings or cashflo f ws during2024, 2023 and2022.Actua t lresults may differfro f mour estimatesresulting inan impact, positiveornegative, on earnings
See Note P foradditionaldiscussion of contingencies.
Share-Based Payments -Weexpense the fair valueofshare-based payments netofestimated forfeitures. We estimate forfeiture ratesbasedon historicalfor f feituresunderour share-basedpayment plans.
See Note L forour share-basedpaymentsdisclosures
Earnings per CommonShare -Basic EPS iscalculatedbased on thedaily weighted-average numberofsharesofcommon stockoutstanding during the period, vested restricted andperformance units that have been deferred and share awards deferred underthe compensation planfor f non-employeedirectors. Diluted EPS is calculatedbased on thedaily weighted-average numberofsharesofcommonstock outstanding during the period plus potentially dilutivecomponents. Thedilutive components are calculated basedonthe dilutiveeffec f tfor f eachquarter.For fiscal-year periods, the dilutivecomponentsfor f eachquarter are averaged to arrive at thefis f calyear-to-date dilutivecomponent
See Note K forour EPS disclosures
Segment Reporting - Inaccordancewiththe “Segment Reporting”Topic280, our chiefoperating decision-maker has been identified as thechief executiveoffic f er, who reviews the financial performance of each of our four segments to make decisions about allocatingresources and assessing our financial performance as a whole, on aregular basis. Adju d sted EBITDA by segment is the singlemeasureof profitand loss utilized inthisevaluationbyour chiefexecutiveofficer and is provided through monthlyand quarterly review packages.Forecasted and actual adju d sted EBITDA is used in theevaluationand approvalof capital proje o cts. We believe thisfin f ancial measure isusefulbecause itand similar measures areusedby manycompanies in our industrya r s a measurementoffin f ancialperformance and are commonly employedbyfin f ancial analysts andothers toevaluate our financial performance and tocompare financial performance among companies inour industry. r Adju d sted EBITDA for each segment isdefin f ed as net income adjustedfor f interest expense, depreciationand amortization, noncash impairmentcharges, income taxes, noncash compensation expense, andcertain othernoncash items.Following the MagellanAcquisition, we performed areviewofour calculationmethodology of adju d sted EBITDA, andbeginning in 2023, we updatedour calculationto include adju d sted EBITDA related toour unconsolidated affi f liates using the same recognitionand measurementmethods used to record equity in netearnings from investments. In prior periods, our calculation includedequity in netearnings from investments. This change resulted inanadditional $62 million of adju d sted EBITDA in 2023, andwe havenot restated prior periods.Adjusted EBITDAfro f mour unconsolidated affi f liates iscalculatedconsistently with thedefin f itionabove a andexcludes items suchas interest, depreciation, income taxes and othernoncash items.Although the amountsrelated to our unconsolidated affi f liates are included inthe calculationofadjusted EBITDA, such inclusionshouldnot be understood to imply that we have controloverthe operations andresultingrevenues, expenses or cashflowsofsuchunconsolidated affi f liates. This calculation may not be comparable with similarlytitledmeasures of othercompanies
See Note S forour segments disclosures.
RecentlyIssued AccountingStandardsUpdate -Changes toGAAP areestablishedbythe FASB in thefor f mofAccounting StandardsUpdate (ASUs) to theFASBAccounting StandardsCodification. We consider theappl a icability and impact of all ASUs.ASUsnot discussed hereinwere assessed and determined to be either notapplicable or clarific f ations of ASUs previously issued. Exceptasdiscussedbelow, there have been no new accounting pronouncements that have become effe f ctive or have been issued that areofsignificance or potentialsignificance tous.
In November 2023, theFASBissuedASU 2023-07, Segm e entReporting(To ( opic 280):Imp I rovementst t oReportableSeg S gment Disc i losures, which requires public entities to disclose significant expensecategories and amountsfor f each reportabl a esegment on bothan interim and annualbasis, consisting ofexpenses regularly reported to the chiefoperating decision makerand included ina segment'sreportedmeasureofsegment profit f or loss. Thestandard also requiresdisclosing anamount of other segment items as wellas allannualdisclosures in interim periods.ASU 2023-07 is effe f ctivefor f fiscalyearsbeginning afte f r Dec. 15, 2023, andfor f interim periods within fiscalyearsbeginning afte f rDec. 15, 2024, with early adoption permitted The adoptionofthisstandard didnot materially impact us
In December2023, theFASB issuedASU 2023-09, Income Taxe a s(To ( opic740):Imp I rovements to Income TaxD a isclosures, whichrequires public entities, on an annualbasis, to provide disclosure of specificdisaggregated informationabout a the reporting entity’s effe f ctive tax rate reconciliationaswellas infor f mationon income taxes paid.ASU 2023-09 is effe f ctivefor f fiscalyearsbeginning afte f rDec 15, 2024, with early adoption permitted. We do not expect the adoptionofthisstandard to materially impact us
In November 2024, theFASB issuedASU 2024-03, Income Statement- Repor e ting ComprehensiveInc I ome- Expe x nse Disa i ggregationDisclosures (Subt S opic 220-40), which requires public entities to provide disaggregated informationfor f certain typesofcosts andexpenses included ineach income statementcaption, suchas inventoryp r urchases,employeecompensation, depreciation, intangible assetamortizationand depletion. ASU2024-03 is effe f ctivefor f fiscalyearsbeginning afte f rDec.15, 2026, and interim periods beginning afte f rDec. 15, 2027, with early adoption permitted. We arecurrently evaluating the impact of this standard on us
B. ACQUISITIONSAND DIVESTITURES
EnLink Controlling Interest Acquisition -OnOct.15, 2024, we completed the EnLink Controlling Interest Acquisition, acquiring GIP’s interest in EnLinkconsisting ofappr a oximately 43% of theoutstanding EnLink Units for $14.90 in cash per unit and 100% of theoutstanding limited liabi a lity companyinterests in themanagingmemberof EnLinkfor f $300 million, fortotal cashconsiderationof$3 3 billion. Through our 100% ownershipofthe managing member of EnLink, we obtainedcontrol of EnLink. We used aportion of theproceedsfro f mour September2024 underwritten public offe f ring of $7.0 billionsenior unsecurednotes to fund this acquisition. Foradditional infor f mationonour long-term debt,see Note H
EnLink’soperations areprincipally composed of providing midstream services relating to naturalgas, NGLs and crud r eoil The assets of EnLink include approximately 14,000 milesof pipeline and rightsofway,natur t al gas processing plants with approximately3.9 Bcf/dof processing capacity, NGL fractionators withapproximately 235 MBbl/d of operating capacity,barge andrailterminals, productstorage facilities, including naturalgas storage, purchasing and marketing capabilities andequity investments incertain jointventures. EnLink’soperations arenow reported across all four of our existing operating segments, allocated by thenatur t eofthe commodities and services provided.
This acquisitionmeaningful f ly increases our scale and integrated valuechain within the growing PermianBasin while expanding andextending our assetbases in the Mid-Continent, North Texas and Louisianaregions
We accounted forthis acquisitionusing the acquisitionmethod of accountingfor f businesscombinations pursuanttoAccounting StandardsCodification805, “BusinessCombinations,” whichrequires, among otherthings, assets acquired and liabi a lities assumed toberecorded at theirfai f rvalue on the acquisitiondate. Any excessofconsiderationtobe transferredoverthe estimatedfai f rvalue of assets acquired and liabi a lities assumed isrecorded asgoodwill. Determining the fair valueofacquired assets and liabi a lities assumedrequiresmanagementtomakeestimates, assumptions andjudgments, and in some cases, management mayalsoutilize third-party specialists to assist and advise on thoseestimates. Thepurchaseprice allocation presentedbelow is subs u tantially complete However,managementcontinues torefin f e the preliminaryv r aluationofcertain assets acquired and liabi a lities assumed,suchasworking capital liabi a lities and long-lived assets, and mayadjustthe allocation in subs u equent periods The finalvaluationwill be completed asweobtainthe informationnecessary to complete the analysis, but no laterthanone year fromthe acquisitiondate.
Thefol f lowing tabl a es setfor f th the acquisitionconsiderationand preliminaryp r urchaseprice allocationofassets acquired and liabilities assumed:
(a) -Includesobligationtorepay Series C Preferred Units.See Note I.
Property, plantand equipment: p p q p
Property,plantand equipmentconsists primarily of pipeline and rightsofway, pipeline-relatedequipmentand processing plant andfra f ctionators andwill be depreciated on a straight-linebasis overthe estimateduseful lives of the assets
Intangible assets: g
Thepreliminary valueofnet identifiable intangible assets relates tocustomerrelationships that will be amortized overthe period of expected benefit.
Long-term debt,excluding current maturities: g , g
We utilized publicly traded prices to estimate thefai f rvalue. The debt comprisesseniorunsecuredobligations with varying maturities and interest rates asoutlined in Note H Recognizing thedebtat its acquisition date fair valueresulted ina discount fromthe notionalvalue. The discount was immaterial andwillbe amortized into interest expenseoverthe remaining lifeo f fthe debt
Deferred income taxes:
The EnLinkControlling InterestAcquisitionresulted ina differencebetween thecarryingvalue of theunderlying assets acquired and thecarryovertax basisofassets, which resulted in a defer f red tax liabi a lity recorded as part of thepurchaseprice allocation.
Goodwill:
We establ a isheddefer f red income tax liabilities resulting fromcarryovertax basis, which increased goodwill Theremainderof the goodwill balanceprimarily represents commercialsynergies. Goodwill will not be deductiblefor f taxpurpos r es.For additional infor f mationongoodwill, see Note G
Noncontrollinginterest: g
Represents theapp a roximately 57% of EnLink Units notacquired inthe EnLink Controlling Interest Acquisition, valued at the acquisitiondateclosing priceof EnLink, the SeriesB Prefer f red Units andpartiallyowned consolidated subs u idiaries
Results of operations: p
Theresults of operations attributable to the EnLinkControlling Interest Acquisition havebeen included inour Consolidated FinancialStatementssince thedateofacquisitionthroughDec. 31, 2024 Revenue and incomebefor f e income taxes attributable to thenetassets acquiredfor f theperiod Oct 15, 2024, throughDec. 31, 2024, were $1.5 billionand $173 million, respectively
Subs u equent q event -OnJan 31, 2025, wecompleted the EnLinkAcquisition. Pursuant to the EnLink MergerAgreement, we acquired all of the EnLinkoutstanding publicly held commonunits in afix f ed ratio exchange of 0 1412 shares of ONEOK Commonstock, including EnLink Units that were exchangedfor f all previously outstanding Series B Preferred Units immediately priortoclosing We issued 41 millionsharesofcommonstock, with afai f rvalue of $4.0 billion EnLink isnow a wholly ownedsubsidiary.Aswecontrolled EnLink prior to the EnLinkAcquisition, thechange in our ownershipinterestwas accounted foras anequity transaction.
MedallionAcquisition -OnOct 31, 2024, we completed the MedallionAcquisitionwithGIP, acquiring allofthe equity interests in Medallionfor f totalcashconsiderationof$2.6 billion, inclusiveofthe purchaseofadditional interests in a Medallion jointventure ownedbya separate thirdparty.Weused aportionofthe proceedsfro f mour September2024 underwritten public offe f ring of $7.0 billionseniorunsecured notes to fund this acquisition. Foradditional infor f mationonour long-term debt,see Note H
This acquisitionexpands our midstream services forcrude oiland condensate inWest Texas,specifically the Midland Basin. The assets of Medallion include crude r oilgathering and transportation pipelines andcrude oilstorage facilities. Medallion’s assets andoperations arereported inour Refined Products and Crude segment.
We accounted forthis acquisitionusing the acquisitionmethod of accountingfor f businesscombinations pursuanttoAccounting StandardsCodification805, “BusinessCombinations,” whichrequires, among otherthings, assets acquired and liabi a lities assumed toberecorded at theirfai f rvalue on the acquisitiondate. Any excessofconsiderationtobe transferredoverthe estimatedfai f rvalue of assets acquired and liabi a lities assumedwillberecorded as goodwill. Determining the fair valueof acquired assets and liabi a lities assumedrequiresmanagementtomakeestimates, assumptions andjudgments, and in some cases management mayalsoutilize third-party specialists to assist and advise on thoseestimates. Thepurchaseprice allocation presentedbelow is subs u tantially complete However,managementcontinues torefin f e the preliminaryv r aluationofcertain assets acquired and liabi a lities assumed, suchas working capital liabi a lities and long-lived assets, and mayadjustthe allocation in subs u equent periods The finalvaluationwill be completed asweobtainthe informationnecessary to complete the analysis, but no laterthanone year fromthe acquisitiondate.
Thefol f lowing tabl a esetsfor f th thepreliminaryp r urchaseprice allocationofassets acquired and liabi a lities assumed: At Oct.31, 2024
Property, plantand equipment: p p q p
Property,plantand equipmentconsists primarily of pipeline and pump station equipmentand will be depreciatedona straightline basisoverthe estimateduseful lives of the assets.
Intangible assets: g
Thepreliminary valueofnet identifiable intangible assets relates tocustomerrelationships that will be amortized overthe period of expected benefit.
Goodwill:
Goodwill represents commercialsynergies, and isexpected to be fully deductible fortax purpos r es.For additional inform f ation on goodwill, see Note G
Results of operations: p
Theresults of operations attributable to the MedallionAcquisition havebeen included inour Consolidated FinancialStatements since the date of acquisitionthroughDec. 31, 2024. Revenue and incomebefor f e income taxes attributable to thenetassets acquiredfor f theperiod Nov. 1, 2024, throughDec. 31, 2024, were $256 million and$43 million, respectively
Gulf Coast NGLPipelines Acquisition -OnJune 17, 2024, we completed the acquisition of a systemofNGLpipelines from Easton Energy, a Houston-basedmidstream company, forappr a oximately $280 million. This acquisition in our NaturalGas Liquids segment includesappr a oximately 450 milesofliquids products pipelines located in thestrategic Gulf Coastmarket centers forNGLs, Refined Products and crude r oil. A portion of the Eastonassets are alreadyconnected to our Mont Belvieu assets.Weexpect to addconnections to our Houston-based assets beginning in mid-2025 through theend of 2025
Interstate Natural Gas PipelineDivestiture -OnDec. 31, 2024, we sold threeofour wholly owned interstatenatur t al gas pipelinesystems to DTMidstream, Inc. fortotal cashconsiderationof$1.2 billionand recognized a gainof$227 million in otheroperating income, net, within the Consolidated Statementof Income. This transactionaligns andenhances our capi a tal allocation prioritieswithin our integrated valuechain. These pipelinesystems have previously been reported inour NaturalGas Pipelines segment.
MagellanAcquisition -OnSept. 25, 2023, we completed the Magellan Acquisition. This acquisitionstrategically diversifie f s our complementarya r ssetbase and allows forsignificant expected synergies as a combined entity. Each commonunitof Magellanwas exchangedfor f afix f ed ratio of 0.667 shares of ONEOK commonstock and$25 00 of cash,for f a total considerationof$14.1 billion. Atotal of approximately 135 million shares of common stockwere issued, witha fair valueof approximately $9.0 billion as of theclosing date of the MagellanAcquisition We funded the cash portionofthis acquisition with an underwritten public offe f ring of $5.25 billionseniorunsecurednotes.For additional infor f mation on our long-term debt, pleasesee Note H
The MagellanAcquisitionwas accounted forusing the acquisitionmethod of accountingfor f businesscombinations pursuantto Accounting StandardsCodification805, “BusinessCombinations,” whichrequires, among otherthings, assets acquired and liabi a lities assumed toberecorded attheir fair valueonthe acquisitiondate. Determining the fair valueofacquired assets and liabilities assumedrequiresmanagement’s judgmentand theuse of independent valuationspecialists
Thefol f lowing tabl a es setfor f th the acquisition considerationand final purchaseprice allocationofassets acquired and liabilities assumed:
Sept.25, 2023
Sept.25, 2023
(a) -Includescontingent liabi a lities, primarily related to the amounts accrue r dfor f the Corpus r Christimatterdescribed in Note P.
In 2024, we recorded adju d stments to the preliminaryp r urchaseprice allocationthatresulted inan increase togoodwill of $165 milliondue d to additional infor f mation received during the measurement period. The adjustment is due primarily to a decrease in property,plantand equipmentofappr a oximately $100 million, and an increase tocertain contingencies thatexisted as of the acquisition date
Property, plantand equipment: p p q p
Property,plantand equipmentconsists primarily of pipeline, pipeline-relatedequipment, storage tanks andprocessing equipmentand will be depreciatedona straight-linebasis overthe estimateduseful lives of the assets.
Intangible assets: g
Thepreliminary valueofnet identifiable intangible assets relates tocustomerrelationships that will be amortized overthe period of expected benefit.
Long-term debt,excluding current maturities: g , g
We assumed the outstanding debt of Magellanand utilized publicly traded prices to estimate thefai f rvalue The debt comprises senior unsecuredobligations with varyingmatur t ities and interest rates asoutlined in Note H Recognizing thedebtat its acquisitiondatefai f rvalue resulted in a discount fromthe notionalvalue The discount will be amortized into interest expense overthe remaining lifeo f fthe debt
Goodwill:
Goodwillprimarily represents expected tax benefit f sfro f mfut f turedepreciationand amortizationofacquired assets and commercialsynergies, and isexpected tobeful f ly deductible fortax purpos r es.For additional infor f mation on goodwill, see Note G.
TransactionCosts - The following table sets forththe impact of acquisition related transactioncosts in our Consolidated Statements of Income as of theperiods indicated: YearsEnded Dec.31, 2024 (a)2023 (b) (Millions of
(a) -Primarily non-recurring costsrelated to advisory fees andbridgecommitment fees associated with the EnLinkControlling Interest Acquisitionand MedallionAcquisition.
(b) -Primarily non-recurring costsrelated to advisory fees,severance andsettlement of sharebased awards forcertain Magellanemployees and integrationscosts, aswellasbridge facility commitmentfees f associated with the MagellanAcquisition.
ProForma Financial Infor f mation (unaudited)
Thefol f lowing tabl a esetsfor f th theunauditedsupplemental pro formafin f ancial informationfor f the yearsendedDec.31, 2024, 2023 and2022, as if we hadcompleted the MagellanAcquisition on Jan. 1, 2022, and the EnLinkControlling Interest Acquisitionand the MedallionAcquisitiononJan. 1,2023:
Year EndedDec.31, 2024
ProForma EnLink Controlling InterestAcquisition
ProForma Medallion Acquisition ProForma Combined As reported
(Millions of dollars)
Revenues $21,698 $4,891 $ 1,078 $27,667 Net income$3,112 $288 $ 81$3,481
Year EndedDec.31, 2023
ProForma EnLink Controlling Interest Acquisition ProForma Medallion Acquisition ProForma Magellan Acquisition ProForma Combined As reported
(Millions of dollars)
Revenues $17,677 $6,671 $947 $2,322 $27,617
Net income$2,659 $ 383 $(16) $232 $ 3,258
Thesummarized unauditedpro forma infor f mationrefle f cts the following adju d stments:
• Refle f ctsdepreciationand amortizationbased on thepreliminary fair values of property,plantand equipment, and intangible assets;
• Refle f ctsnon-recurring transactioncosts incurredpresented above that were reclassified and included in pro formanet income as if they hadbeen incurred as of theearliest periodpresented foreach respective acquisition;
• Refle f cts interestexpenserelated to theunderwritten public offe f rings of senior unsecurednotes used to fund thecash considerationand othercosts related to the acquisitions;
• Refle f cts the amortization of excessfai f rvalue of Magellanand EnLink share-based awards;
•Refle f cts the income tax effect of thepro formaadjustments;
• Refle f cts the eliminationofhistoricalactivity betweenONEOK, EnLink and Medallion.
C.MEDFORD INCIDENT
In 2022, afir f eoccurred atour 210 MBbl/d Medfor f d, Oklahoma, NGL fractionationfaci f lity Inthe firstquarter of 2023, we reached an agreementwithour insurers to settle allclaimsfor f physical damage andbusiness interrupt u ionrelated to the Medford incident.Underthe termsofthe settlement agreement, we agreed to resolve the claims fortotal insurancepaymentsof $930 million, $100millionofwhich wasreceived in2022 Theremaining $830 millionwas received inthe firstquarter of 2023 Theproceedsserve as settlement for propertydamage, business interrupt u ionclaims to thedateofthe settlement and as payment in lieuoffut f turebusiness interrupt u ion insurance claims.Weappl a ied the $830 million received toour outstanding insurancereceivabl a e atDec. 31, 2022, of $51 million, andrecorded anoperationalgainfor f theremaining $779 million inother operating income, net, within the Consolidated Statementof Income. We classified proceedsreceived within the Consolidated StatementofCashFlows basedonour assessmentofthe nature of the loss(propertyand business interrupt u ion) included inthe settlement
D. FAIR VALUEMEASUREMENTS
Recurring Fair Value Measurements -The following tabl a es setfor f th our recurring fair valuemeasurements asofthe dates indicated:
liabilities
(a) - Derivative assets and liabi a lities are presented inour Consolidated Balance Sheet on anet basis. We netderivative assets and liabi a lities when a legally enforceable master-netting arrangement exists between thecounterpa r rtyto a derivativecontract andus. At Dec. 31, 2024, we held no cash andpostedcashof$45 millionwitha counterpa r rty, including $10 millionofcashcollateralthat isoffsetting derivativenet liabi a lity positions undermaster-netting arrangements inthe tabl a eabove a The remaining $35 millionofcashcollateral inexcessof derivative liabi a lity positions is included inother current assets in our Consolidated Balance Sheet
(a) - Derivative assets and liabi a lities are presented inour Consolidated Balance Sheet on anet basis. We netderivative assets and liabi a lities when a legally enforceable master-netting arrangement exists between thecounterpa r rtyto a derivativecontract andus. At Dec. 31, 2023, we postednocashand held cashof$41 millionwith various counterpa r rties, whichoffsetsour derivativenetasset positionundermaster-netting arrangements asshown inthe tabl a eabove a
Other FinancialInstruments - The approximate fair valueofcashand cashequivalents, accountsreceivabl a e, accounts payable andshort-term borrowings is equaltobook valuedue d to theshort-term nature of these items.Our cashand cashequivalents are composed of bank andmoney marketaccounts and areclassified as Level 1.Our short-term borrowings areclassified as Level2 since the estimatedfai f rvalue of theshort-term borrowings can be determined using infor f mationavailabl a e inthe commercial paper market.We have investments associated with our suppl u ementalexecutiveretirement planand nonqualified deferredcompensation planthatare carried at fair value and primarily arecomposed of mutual funds,municipalbonds and otherfix f ed income securities classified as Level 1 and Level2
Theestimatedfai f rvalue of our consolidated long-term debt, including current maturities, was $30 8 billionand $21.4 billion at Dec. 31, 2024 and2023, respectively Thebook valueofour consolidated long-term debt, including current maturities, was $32 1 billionand $21.7 billionatDec 31, 2024 and2023, respectively Theestimatedfai f rvalue of the aggregateseniornotes outstanding wasdeterminedusing quoted marketprices forsimilar issues with similarterms andmatur t ities. Theestimated fair valueofour consolidated long-term debt is classified as Level2
E. RISK-MANAGEMENT AND HEDGINGACTIVITIESUSING DERIVATIVES
Risk-management Activities -We are sensitive tochanges inthe prices of naturalgas, NGLs, Refined Products andcrude oil, principally as aresultofcontractua t lterms underwhich thesecommodities are processed, purchased andsold. We are also subj u ect to theriskofinterest-rate fluctuation inthe normalcourse of business. We usephysical-forwardpurchases andsales andfin f ancial derivatives to secure a certain pricefor f aportionofour naturalgas, NGLs, Refined Products, condensate and crude r oil purchases andsales; toreduc d eour exposure tocommodity price and interest-rate fluctuations; and to achieve more predictabl a ecashflo f ws.Additionally, wemay usephysical-forwardpurchases andfin f ancial derivatives to reducecommodity priceriskassociated withpower andnatur t al gasused tooperate our facilities. We followestablishedpolicies and procedur d es to assess risk andappr a ove,monitorand reportour risk-managementactivities. We have not used these instrum r ents fortrading purpos r es
Commodity pricerisk y p -Commodity priceriskrefer f s to the risk of loss in cashflows and future earnings arisingfro f madverse changes inthe priceofnatur t al gas, NGLs, Refined Products andcrude oil. We mayuse thefol f lowing commodity derivative instruments toreduc d e the near-termcommodity priceriskassociated withaportionofour forecastedpurchases andsales of thesecommodities:
•Futur t es contracts -Standardized contracts to purchaseorsellnatur t al gas and crud r eoil forfut f turedeliveryo r rsettlement underthe provisions of exchange regulations;
•Forward contracts -Nonstandardized commitmentsbetween two parties to purchaseorsellnatur t al gas, NGLs, Refined Products, condensate and crude r oilfor f future physical delivery. r Thesecontracts are typically nontransferabl a e and can only becanceledwith theconsentof both parties;
•Swaps ap - Exchange of one or more payments basedonthe valueofone or more commodities. These instrum r ents transfer f thefin f ancial riskassociated with afut f turechange in valuebetween thecounterpa r rtiesofthe transaction, without also conveying ownershipinterest inthe assetor liabi a lity;
•Options p -Contractua t lagreements thatgive the holderthe right,but not theobligation, to buy or sell afix f ed quantityof a commodity at afix f ed pricewithina specified period of time. Options may either be standardized andexchangetraded or customized andnonexchange-traded; and
•Collars -Combinationofa purchased put optionand a soldcalloption, which places aflo f or andceiling price for commodity salesbeing hedged.
We mayalsouse other instrum r ents to mitigatecommodity pricerisk.
In our NaturalGas Gathering and Processing segment, we areexposed to commodity priceriskas a result of retaining aportion of thecommodity sales proceeds associated with our feewith POP contracts. Undercertain feewithPOP contracts, our fees andPOP percentage mayincreaseordecrease if productionvolumes, deliveryp r ressuresorcommodity prices change relative to specifie f d thresholds.We also are exposed to basisriskbetween thevarious productionand market locations wherewebuy and sell commodities. As part of our hedging strategy, we use the previously describedcommodity derivativefin f ancial instruments andphysical-forwardcontracts toreduc d e the impact of priceflu f ctua t tions related tonatur t al gas, NGLs and condensate.
In our NaturalGas Liquids segment, we areprimarily exposed to commodity priceriskresultingfro f mthe relativevaluesofthe various Purity NGLs to eachother, the valueofNGLs instorage and the relativevalue of NGLs tonatur t al gas. We are also exposed to location price differentialriskas a result of therelativevalue of NGLpurchases at one locationand sales atanother location, primarily related toour optimizationand marketingbusiness. As part of our hedging strategy, we utilizephysicalforwardcontracts and commodity derivativefin f ancial instruments toreduc d e the impact of priceflu f ctua t tions related to NGLs.
In our NaturalGas Pipelines segment, we areprimarily exposed to commodity priceriskonour intrastate pipelines because they consumenatur t al gas inoperations andretainnatur t al gasfro f mour customersfor f operations or as part of our feefor f compression services provided. When the amount consumed in operations differs fromthe amountprovidedbyour customers, our pipelines mustbuy or sell naturalgas, orstore or usenatur t al gas inventory, r whichcan expose thissegment to commodity priceriskdepending on theregulatoryt r reatment forthis activity To theextentthatcommodity pricerisk inour NaturalGas Pipelines segment isnot mitigated by fuel cost-recovery mechanisms, wemay usephysical-forwardsales or purchases to reduce the impact of naturalgas priceflu f ctua t tions.AtDec 31, 2024 and2023, therewerenofin f ancial derivative instrum r ents with respect to our naturalgas pipelineoperations
In our Refined Products and Crude segment, we areprimarily exposed to commodity priceriskfro f mour liquids blending and marketing activities, as wellas productretaineddur d ing the operations of our pipelines and terminals. As part of our hedging strategy, we use the previously describedcommodity derivative financial instrum r ents andphysical-forwardcontracts toreduc d e the impact of priceflu f ctua t tions related to NGLs, Refined Products andcrude oil.
Interest-raterisk -Wemay manage interest-rate risk through theuse of fixed-rate debt,flo f ating-rate debt, Treasuryl r ocks and interest-rate swaps. Treasury locks are agreements to paythe differencebetween thebenchmarkTreasuryr r ate and therate that is designated inthe termsofthe agreement. In the third quarter of 2024, we entered into $1.5 billionof Treasuryl r ocks to h hedge h thevariiabi a lity of i interest payyments on apor i tionofour forecastedd b eb i tissuances Inthhe same quarter, weset l tled all of our $1.5 billillion Treasuryl r ockks rellated toour d underw i ritten publiic offe f i ri g ng of $7.0 billiion se i nior unsecureddnotes asso i ciat d ed i wi h th h the EnLi k nk Controllilling InterestAcq i ui i si i tiona d nd MedalliionAcq i ui i si i tion l Alllofour Treasuryl r ockks were d de i signated ascashfllo f w h hedges. At Dec. 31, 2024, anddDec 31, 2023, we ha h dnooutsta di ndi g ng Treasu y ry l lo k ck agreements
Interest-rate swaps are agreements to exchange interestpayments at some future point basedonspecified notionalamounts. EnLinkpreviously entered into $400 million interestrateswaps a associated with the EnLink Revolving Credit Facility and the EnLink ARFacility InDecember2024, EnLink terminated the$400 million interest rate swapsupon u repaymentof outstanding amountsunderthe EnLinkRevolving Credit Facility and the terminationofthe EnLink ARFacility At Dec. 31, 2024, anddDec. 31, 2023, we ha h dnooutsta di ndi g ng i interest-rate swap agreements
Fair Values of DerivativeInstruments -See Note Afor f a discussionofthe inputs associated with our fair value measurements. The following tabl a esetsfor f th thefai f rvaluesofour derivative instruments presented on a gross basis asofthe dates indicated:
Dec.31, 2024 Dec.31, 2023
(a) - Derivative assets and liabi a lities are presented inour Consolidated Balance Sheetsona netbasis when a legally enforceable masternetting arrangement exists between thecounterpa r rtyto a derivativecontract andus.
(b) - AtDec. 31, 2024, our derivativenet liabi a lity positions undermaster-netting arrangementsfor f financialcommodity contractswereoffset by cashcollateralof$10 million.
NotionalQuantities for DerivativeInstruments - The following tabl a esetsfor f th thenotionalquantities forderivative instruments held asofthe dates indicated:
Dec.31, 2024 Dec.31, 2023 Contract Type Net Purchased/Payor (Sold/Receiver)
Derivatives designated as hedging instruments: Cashflow hedges
Fixedprice -Natur t al gas(Bc( cf)Futur t
-NGLs, Refined Products andcrude oil (MMB M bl) l
-Power (Gigawatthour) r
and swaps 22 1 Basis
t al gas(Bc( cf)Futur t es andswaps a
Derivatives not designated ashedging instruments: Fixedprice -Natur t al gas(Bc( cf)Futur t
-NGLs, Refined Products andcrude oil (MMB M bl) l
1 Basis -Natur t al gas(Bc( cf)Futur t es andswaps a
Refined Products, and crude r oil (MMB M bl) l
Swingswaps a -Natur t al gas(Bc( cf)Futur t es andswaps a (0.2)
Cash Flow Hedges -AtDec. 31, 2024 and2023, the accumulatedother comprehensive income (loss) relating toriskmanagement assets and liabi a lities, netoftaxes, was $(38) million and$31 million, respectively Corresponding unrealized gains(losses) related torisk-management assets and liabi a lities atDec. 31, 2024, arenot material
Thefol f lowing tabl a esetsfor f th theunrealized change in fair valueofcashflo f w hedges inother comprehensive income (loss) for theperiods indicated:
change in fair valueofcashflo f w hedges
Thefol f lowing tabl a esetsfor f th theeffect of cashflo f w hedgesonnet income forthe periods indicated:
Derivatives in Cash Flow Hedging Relationships
Location of Gain (Loss) Reclassified from AccumulatedOther Comprehensive Loss into NetIncome
YearsEndedDec.31, 2024 2023 2022 (Millions of dollars)
f w hedgesreclassified fromaccumulatedother
Credit Risk -Wemonitorthe creditworthiness of our counterpa r rties and compliancewithpolicies and limits establ a ishedbyour Risk Oversight and Strategy Committee. We maintain credit policieswith regard to our counterpa r rties thatwebelieve minimizecreditrisk. Thesepolicies include an evaluationof potentialcounterpa r rties’ financialcondition(including credit ratings,bond yields andcreditdefau f lt swap rates), collateralrequirementsundercertain circumstances and the useof
standardized master-netting agreements that allowus tonet thepositive and negativeexposures associated witha single counterpa r rty We use internallydevelopedcreditratings forcounterpa r rties thatdonot have a creditrating.
Ourfin f ancial commodity derivatives areprimarily settled througha NYMEX or Intercontinental Exchange clearingbroker account with daily margin requirements. However, we may enter into financialderivative instrum r ents that contain provisions that requireus tomaintainan investment-grade credit rating fromS&P,Fitchand/or Moody’s. If our credit ratings on our senior unsecured long-term debt were to declinebelow investment grade, thecounterpa r rties to the derivative instrum r ents could request collateralization on derivative instrum r ents in net liabi a litypositions
Thecounterpa r rties toour derivativecontracts typically consistofmajor energy companies, financial institutions and commercialand industrialend users. This concentrationofcounterpa r rtiesmay affe f ct our overall exposure tocreditrisk, either positivelyornegatively, in that thecounterpa r rtiesmay be affe f cted similarly bychanges ineconomic,regulatoryo r rother conditions.Based on our policies, exposures, creditand otherreserves, we do not anticipate a materialadverseeffect on our financial position or resultsofoperations as aresultofcounterpa r rty nonperformance
At Dec. 31, 2024, thecreditexposurefro f mour derivative assets is with investment-grade companies inthe financialservices sector
F.PROPERTY, PLANTAND EQUIPMENT
Thefol f lowing tabl a esetsfor f th our property,plantand equipmentbypropertytype, asofthe dates indicated:
Thedepreciationexpensefor f the yearsendedDec. 31, 2024 and2023, was $1 1 billionand $736 million, respectively
We incurred costsfor f construc r tionwork in process that had not been paid atDec. 31, 2024, 2023 and2022, of $179 million, $242 million and$171 million, respectively. Such amounts are not included incapital expenditures(less AFUDC) onthe Consolidated StatementsofCashFlows
EnLink ControllingInterestAcquisition - InOctober2024, we completed the EnLink Controlling Interest Acquisition and acquiredproperty,plantand equipment, which primarily include pipeline and rightsofway, pipeline-relatedequipment, processing plantand fractionators valued at $11.4 billion.
Medallion Acquisition - InOctober2024, we completed the Medallion Acquisition and acquiredproperty,plantand equipment, which primarily include pipeline and pump station equipment, valued at $1.6 billion.
Interstate Natural Gas PipelineDivestiture - InDecember2024, we completed the sale of threeofour wholly owned interstate naturalgas pipelinesystems to DTMidstream, Inc. These assets, which areprimarily transmission pipelines and relatedequipment, had a gross cost basisof$1 3 billion.
MagellanAcquisition - InSeptember 2023, we completed the MagellanAcquisition and acquiredproperty,plantand equipment, which primarily include pipeline, pipeline-relatedequipment, storage tanks andprocessing equipment, valued at $11.6 billion.
J. VARIABLE INTEREST ENTITIES
Consolidated Variable Interest Entities (VIE)s - As of Dec. 31, 2024, we consolidate the following VIEs:
EnLink -Wecontrol EnLinkthrough our ownershipofits managing member EnLink is a VIE because the holders of the membership interest do not have subs u tantive kick-outrightsor participatingrightsoverthe managing member.We are the primary beneficiaryo r f EnLinkbecause we have thepower through our 100% ownershipofthe managing member, tocontrol decisions that most significantly impactEnLink We consolidate EnLinkand record anoncontrolling interestfor f the interest that we do not own. We also record anoncontrolling interest related to EnLink’sSeriesB Prefer f red Units
Subs u equent Event q -Upon closing ofthe EnLink AcquisitiononJan 31, 2025, EnLink is no longerconsidered a VIE
Delaware BasinJV - EnLinkowns a 50.1% interest in theDelawareBasin JV, which owns processing facilities located in the Delaware Basin in Texas The Delaware BasinJV is a VIE because theother ownerdoesnot have subs u tantive kick-out rights or participatingrightsoverthe managing member.As the managing member, we are theprimary beneficiaryb r ecausewe controlthe decisions that most significantly impact theDelawareBasin JV.After June 30, 2025, our jointventure partner has theright to cause theDelawareBasin JV to commence a sale process tosellall of theoutstanding interestsorassets of the Delaware BasinJVfor f thebestavailabl a eprice. If our jointventure partnerexercises this right, we are permitted to purchase their interestata certain callprice.
Ascension Pipe i lineCom C mpany,L y LC (Ascension) - EnLinkowns a 50% interest in Ascension, whichowns anNGL transmission pipeline thatconnects EnLink’s Riverside fractionatorto the otherowner’s refinery.Ascension is a VIE because theother ownerdoesnot have theabi a lity to remove us as themanagingmember. They also do not have theabi a lity to participateorblock our decisions as themanagingmember, whichmakes us theprimary beneficiaryb r ecause we controlthe decisions that most significantly impact Ascension.
Thefol f lowing tabl a epresents the balancesheet informationfor f the assets and liabi a litiesofour consolidated VIEs, which are included inour Consolidated Balance Sheet:
Dec.31, 2024 (Millions of dollars)
Thefol f lowing tabl a es setfor f th thecomputationof basic anddiluted EPS forthe periods indicated:
Year EndedDec.31, 2024
Year EndedDec.31, 2023
L. SHARE-BASED PAYMENTS
Our Equity Incentive Plan(EIP) providesfor f the granting ofstock-based compensation, including restricted stockunitawards andperformance unitawards, to eligible employees and the granting ofstockawards to non-employeedirectors. We have reserved 8.5 millionsharesofcommonstock for issuance underthe EIP and atDec. 31, 2024, we had 3.2 million shares availabl a efor f issuance underthe plan Thiscalculationofavailable shares reflectsshares issued andestimatedsharesexpected to be issued upon vesting ofoutstanding awards grantedunderthe EIP, excluding estimatedfor f feituresexpected to be returned to theplan.
EnLink ControllingInterestAcquisition
-Asdiscussed in Note B, we completed the EnLink Controlling InterestAcquisition on Oct. 15, 2024. EnLink has previously issued restricted incentiveunits andperformance units that vest at theend of a designatedperiod, typicallythree years. Thefai f rvalue of these awards attributable to pre-combinationservice was allocated to considerationtransferred and was included as partofthe purchaseprice. Theportionattributable to post-combinationservice is beingrecognized as compensationexpenseona straight-linebasis overthe remainingvesting periodofthe awards Compensationexpense forthe unit-based awardsof EnLinkfor f theownershipperiod is not material. Inaddition, unrecognized compensationexpense related to the outstanding EnLink restricted incentiveunits andperformance units is not material
MagellanAcquisition
-Asdiscussed inNoteB, wecompleted the MagellanAcquisition on Sept.25, 2023 Priorto the acquisition, Magellan hadpreviously issued unit-based awardsconsisting oftime-vestedphantom units andperformance phantom units, thatvested atthe endofa designatedperiod, typically three years. Pursuant to the terms of the Merger Agreement, each outstanding unit-based award wasconverted into arestrictedstock unitand measured at theiracquisitiondate fair value as iftheywerevested and issued on the acquisition date.The fair value attributable to pre-combinationservice was allocated to considerationtransferred and was included as partofthe purchaseprice. Theportionattributable to post-
combinationservice is beingrecognized as compensationexpenseona straight-linebasis overthe remainingvesting periodof the awards. Converted restricted stockunitawards accruedividendequivalents thatare paid out in cashatvesting.
Restricted Stock Units -We have granted restricted stockunits to key employees that vest at theend of a designatedperiod, typically three years, andentitle the grantee to receive shares of our commonstock Restrictedstock unitawards are measured at fair value as iftheywerevested and issued on the grant date and adjustedfor f estimatedfor f feitures. Restricted stockunit awards accrue r dividend equivalents inthe form of additionalrestrictedstock units priortovesting. Compensationexpense is recognized on a straight-linebasis overthe vesting periodofthe award.
Perfor f manceUnitAwards -We have granted performance unitawards to key employees that vest at theend of a three-year period. Upon vesting, a holderofoutstanding performance units is entitled toreceive anumberofsharesofour common stock equalto apercentage (0% to200%) ofthe performance units granted, basedonour totalshareholderretur t noverthe vesting period, compared with the total shareholderretur t nofa peer group of otherenergycompanies overthe same period. Performance unitawards are measured at fair valueonthe grantdatebased on a Monte Carlo modeland adju d sted forestimated forfeitures. Performance unitawards accrue r dividend equivalents inthe form of additional performance units priortovesting. Compensationexpense isrecognized on a straight-linebasis overthe vesting periodofthe award.
f
StockCompensationfor
Non-EmployeeDirectors
- The EIPprovidesfor f the granting ofnonstatutory stockoptions and stockbonus awards to non-employeedirectors, including performance unitawards and restricted stockunitawards. Underthe EIP, awards may be granted by the Executive CompensationCommittee atany time, until grants have been made for allshares authorized underthe EIP Themaximumnumberofsharesofcommonstock andcash-based awards thatcan be issued to a participantunderthe EIPdur d ing any year is limited to $0 8 million invalue as of the grant date No performance unitawardsor restricted stockunitawards havebeen made to non-employeedirectors, and there arenooptions outstanding
General -For allawardsoutstanding, we used a 3%for f feiture rate basedon historicalfor f feituresunderour share-based payment plans.Wecurrently use treasurys r tock to satisfyo f ur share-basedpayment obligations
Compensationexpense,exclusive of thoserecognized within transactioncosts,for f our share-basedpayment planswas $102 million, $63millionand $53 milliondur d ing2024, 2023 and2022, respectively, before related tax benefits of $36 million, $14 millionand $13 million, respectively.
Restricted StockUnitActivity -AsofDec. 31, 2024, we had$43 millionoftotal unrecognized compensation cost related to our nonvested restricted stockunitawards, which isexpected to be recognized overa weighted-average period of 1.7 years. Thefol f lowing tabl a es setfor f thactivity andvarious statisticsfor f our restricted stockunitawards:
(a) -Includes 847,120 unvested restricted stockunitawardsgranted in conjunctionwith the MagellanAcquisition.
(b) - Includes509,077 restricted stockunitawardsreleased to participants andfor f feited inconju n nctionwith the MagellanAcquisition.
(c) - Includes 338,043 restricted stockthatremainunvested related to the Magellan Acquisition.
Perfor f manceUnitActivity -AsofDec. 31, 2024, we had $38 million of tota t lunrecognized compensationcostrelated to the nonvestedperformance unitawards, which isexpected to be recognized overa weighted-average period of 1 8years. The following tabl a es setfor f thactivity andvarious statisticsrelated to theperformance unitawards and the assumptions used in the valuations at therespective grant dates:
(a) - Volatility wasbased on historical volatility overthree yearsusing daily stock price observations
EmployeeStockPurchase Plan -We havereserved a totalof 12 million shares of common stockfor f issuance underour Employee Stock Purchase Plan(the ESPP).Subjecttocertain exclusions, all employees areeligible to participate inthe ESPP Employees can choose to haveupt u o 10% of theirbasepay withheld from eachpaycheck during the offe f ring period to purchase our commonstock,subjectto terms and limitations of theplan. Thepurchaseprice of thestock is 85% of the lower of itsgrant date or exercise date marketprice. Approximately 59%,69% and68% of employees participated in theplan in2024, 2023 and 2022, respectively Underthe plan, wesold275,874 shares ata weighted averageof$64 38pershare in 2024, 236,108 shares ata weighted averageof$52.70 pershare in 2023 and235,583 shares ata weighted averageof$47.21pershare in 2022.
EmployeeStockAward Program -Underour Employee Stock Award Program, we issued,for f no monetary consideration, to alleligible employees one shareofour commonstock when theper-share closing price of our commonstock on the NYSEis at or above each one-dollar increment above its previous high closing price. We originally reserved a total of 900,000 shares of commonstock for issuance underthis program.Shares issued toemployees underthis program during2024 totaled 127,825 andwe haveful f ly awarded all shares allocated to theprogram.Weexpect to requestadditionalsharesbe issued and allocated to theprogram during the 2025 Annual Meeting ofShareholders Employees have received awards through the$103 milestone No shares were issued to employees underthis program in 2023 or 2022.
Deferred Compensation Plan for Non-EmployeeDirectors -Our Deferred Compensation Planfor f Non-EmployeeDirectors providesour non-employeedirectors theoptiontodefer f allora portionoftheir compensationfor f theirservice on our Boardof Directors. Underthe plan, directors may elect either a cashdefer f raloptionora phantom stockoption. Underthe cash deferral option, directorsmay elect to deferthe receipt of allora portionoftheir annualretainerfees f , which will be credited with interest during the deferral period. Underthe phantom stockoption, directorsmay deferall or aportionoftheir annualretainer fees andreceivesuchfee f sona deferredbasis in thefor f mofsharesofcommonstock underour EIP, whichearnthe equivalent of dividends declared on our commonstock.Shares are distributed to non-employeedirectors atthe fair market valueofour commonstock at thedateof distribution.
M.EMPLOYEE BENEFITPLANS
Retirementand OtherPostretirement Benefit f Plans
ONEOK Legacy Retirement Plan -We have alegacydefin f ed benefit pension plan covering certainemployees andfor f mer employees, which closed to newparticipants in 2005. In addition, we have a supplementalexecutiveretirement planfor f the benefitofcertain offi f cers who participate inour definedbenefit f pension plan. Oursupplementalexecutiveretirement plan is closed to newparticipants. We fund our definedbenefit f pension planata levelneeded to maintain or exceed theminimum funding levels requiredbythe Employee Retirement Income Security Actof 1974, as amended.
Magellan Legacy Retirement Plans -As a result of the MagellanAcquisition, we assumed the pension planassets and obligations of Magellan in 2023 Theseobligations arecomposed of twodefin f ed benefit pension plans, including one fornonunion employees andone forunion employees The pension planfor f non-union employees closed to newparticipants upon the closing ofthe acquisition Thepension plan forunion employees closed to newparticipants in January 2024 We fund these definedbenefit f pension plans at a level needed to maintain or exceed theminimumfundi f ng levels requiredbythe Employee Retirement Income Security Act of 1974, as amended.
OtherPostretirement Benefit f Plans -Wesponsor legacy health andwelfare plans that provide postretirementmedical and life f insurancebenefits f to employees hiredprior to 2017 whoretirewith at leastfiv f e yearsofful f l-time consecutiveservice The postretirementmedicalplan for pre-Medicareparticipants iscontributory, r with retiree contributions adju d sted periodically, and contains othercost-sharingfea f turessuchasdeduc d tibles and coinsurance. Thepostretirementmedicalplan for Medicareeligible participants is an account-based plan underwhichparticipants may elect to purchaseprivate insurancepoliciesundera privateexchange and/or seek reimbursement of othereligiblemedical expenses In2023, we also assumed the postretirement benefitobligations of Magellan whichcovers certain employees of Magellan.
Obligations andFundedStatus - The following table sets forthour retirement andother postretirementbenefit f plansbenefit f obligations andfai f rvalue of plan assets forthe periods indicated:
(a) -The benefitobligationfor f RetirementBenefits f atDec. 31, 2024 and2023, include thesupplementalexecutiveretirement planobligation. (b) - Fairvalue of plan assets for RetirementBenefits f exclude the assets of our suppl u ementalexecutiveretirement plan, whichtotaled $92 millionand $89 millionatDec. 31, 2024 and2023, respectively, and are included inother assets on the Consolidated Balance Sheets. These assets aremaintained ina rabbi a trus r tand arenot treated as assets of thesupplementalexecutiveretirement plan.
The accumulatedbenefit f obligationfor f our retirement plans was $628 millionand $637 million atDec. 31, 2024 and2023, respectively
Thecomponentsofnetperiodicbenefit f cost andrelated assumptions, and amountsrecognized in othercomprehensive income related toour retirementand other postretirementbenefit f plans are not material The balance inaccumulatedother comprehensive loss atDec. 31, 2024 and2023, was $58 million and$64 million, respectively. Thisbalance is expected to be amortized overthe averageremaining serviceperiodofemployees participating inthese plans.
Actuarial Assumptions - The following table sets forththe weighted-average assumptions used to determinebenefit f obligations forretirementand other postretirementbenefit f sfor f theperiods indicated:
(a)
(a) -This actua t rialassumption isonlyappl a icable to thepension plans assumedwith the MagellanAcquisition.
We determineour discount rates annually utilizing portfol f iosofhigh-quality bonds matched to the estimatedbenefit f cashflo f ws of our retirementand other postretirementbenefit f plans. Bonds selected to be included inthe portfol f ios are onlythoserated by S&P or Moody’s as an AA or Aa2 rating orbetterand exclude callabl a ebonds,bonds with less than aminimum issuesize, yield outliers andother filtering criteria to remove unsuitabl a ebonds.
Plan Assets -Our investment strategy is to investplan assets in accordance with sound investment practices that emphasize long-term fundamentals. The goalofthisstrategyis tomaximize investment returnswhile managing risk in ordertomeetthe plan’s current andproje o cted financialobligations. The investment allocationfor f our ONEOK legacy definedbenefit f pension plan follows a glidepathappr a oach of liabi a lity-driven investing thatshifts a higher portfol f io weighting tofix f ed income as the plan’s fundedstatus increases.A majo a rity of the legacyMagellan pension assets are allocated to fixed incomesecurities and invested to matchthe durationofthe plans’ short, intermediate and long-term liabi a lities, with theremaining amount allocated to equity securities. Our pension plansutilize a diversified mix ofinvestments thatmay include domestic and international equities, short, intermediate and long term corporate and government obligations,real estate and hedge funds The combined target allocationfor f the assets of our pension plans as of Dec. 31, 2024, is as follows:
As part of our risk management forthe plans, minimums and maximums have been setfor f each of the assetclasses listedabove a .
Thefai f rvalue of theplanassets forour other postretirementbenefit f plans asofDec. 31, 2024, arenot material. The following tabl a es setfor f th theplanassets by fair valuecategorya r softhe measurementdatefor f our definedbenefit f pension plans:
f s Dec.31, 2024
(a) -Thiscategoryr r epresentssecuritiesofthe respectivemarketsector fromdiverse industries.
(b) -Thiscategoryr r epresentsbonds fromdiverse industries.
(c) -Thiscategoryr r epresents alternative investments in limitedpartnerships, whichcan be redeemed witha 30-day noticewith no further restrictions There arenounfunde f dcapitalcommitments. These limitedpartnerships
inbroadly diversifie f dportfol f iosof
and/or
accounts toseekequity-likeretur t ns with lowmarket correlation, reduced volatility and limited risk
(d) -Plan asset investmentsmeasured at fair valueusing thenetassetvalue pershare
(a) -Thiscategoryr r epresentssecuritiesofthe respectivemarketsector fromdiverse industries.
(b) -Thiscategoryr r epresentsbonds fromdiverse industries.
(c) -Thiscategoryr r epresents alternative investments in limitedpartnerships, whichcan be redeemed witha 30-day noticewith no further restrictions There arenounfunde f dcapitalcommitments. These limitedpartnerships invest through multi-strategy programs inbroadly diversifie f dportfol f iosof private investment funds, hedge funds and/or separate accounts toseekequity-likeretur t ns with lowmarket correlation, reduced volatility and limited risk
(d) -Plan asset investmentsmeasured at fair valueusing thenetassetvalue pershare
Contributions -During2024, we contributed $5 million to our legacy ONEOK definedbenefit f pensionand made no contributions to our legacy Magellandefin f ed benefit pension plans and other postretirementbenefit f plans. We contributed $9 milliontoour legacy ONEOK definedbenefit f pension, $17 milliontoour legacy Magellan non-union plan and$3millionto
our legacy Magellanunion plan in Februa r ry 2025. We do not expect to make anycontributions to our other postretirement benefit plans in 2025
Pensionand OtherPostretirement Benefit f Payments -Benefit f payments forour definedbenefit f pensions andother postretirementbenefit plans forthe period ending Dec. 31, 2024, were $36 million and$3million, respectively The following tabl a esetsfor f th thedefin f ed benefit pension andother postretirementbenefits f payments expected to be paid in 2025 through 2034:
Theexpected benefits to be paid arebased on thesame assumptions used to measureour benefitobligationatDec. 31, 2024, and include estimatedfut f tureemployeeservice.
Other Employee Benefit f Plans
401(k) Plan -We have a 401(k) Plan covering allemployees, and employeecontributions arediscretionary.Wematch100% of employee401(k) Plan contributions up to 6% of eachparticipant’seligiblecompensationeachpayroll period, subj u ect to certain limits.We alsomakeprofit-sharing contributions underour 401(k) Plan foremployees whodonotparticipate inour definedbenefit f pension plans.We generally make a quarterly profit f -sharing contributionequalto 1% ofeachprofitf sharing participant’seligible compensation during the quarter and anannualdiscretionary profitf sharing contributionequalto a percentage of eachprofitf sharing participant’seligible compensation. Effe f ctive Jan 1,2025, theprofit-sharingquarterly contributions will increase to 6% from 1% ofquarterly eligible compensation. We will continue to make annualdiscretionary contributions of up to 2% of eligible compensation.Our contributions made to theplan, including profitf sharing contributions, were $66 million, $44 millionand $35 million in2024, 2023 and2022, respectively.
Medallionterminated the legacyMedallion401(k) Plan effe f ctive Oct. 30, 2024, priorto the closing ofthe Medallion AcquisitiononOct 31, 2024 Legacy Medallionemployees may rolltheir Medallion401(k) Plan account balance to the ONEOK 401(k) Plan or an individualretirementaccount or take a distribution.
In September2023, the legacyMagellan401(k) Plan was terminated as aresultofthe MagellanAcquisition, and legacy Magellanemployees were giventhe optiontorolltheir 401(k) balances into theexistingONEOK 401(k) Plan or to their individualretirementaccounts. The Magellan401(k) plan was liquidated and closed in September2024.
Subsequent event - EnLinkterminated the EnLink 401(k) Plan effe f ctive Jan. 30, 2025, priorto the closing ofthe EnLink Acquisition. Legacy EnLink employees may rolltheir EnLink 401(k) Plan account balance to the ONEOK 401(k) Plan, an individualretirementaccount or take a distribution.
Nonqualifie f dDefer f redCompensation Plan - The 2020 Nonqualifie f dDefer f red Compensation Planand its predecessor nonqualifie f ddefer f redcompensation plans (collectively, the NQDC Plan) provide a select group of management and highly compensatedemployees, asappr a ovedbyour chiefexecutive offi f cer, with theoptiontodefer f portions of theircompensationand receivenotionalemployercontributions that generallyare notavailabl a edue d to limitations on employerand employee contributions to qualifie f ddefin f ed contribution plans underfed f eral taxlaws. Our investmentswhich are included inother assets on the Consolidated Balance Sheetsrelated to the NQDC Plan arenot material These investments are maintained in arabbi trus r t. Ourcontributions to theplanwerenot material.
Thefol f lowing tabl a esetsfor f th our provision for income taxes forthe periods indicated:
Thefol f lowing tabl a e is a reconciliationofour income taxprovision forthe periods indicated:
Thefol f lowing tabl a esetsfor f th the tax effe f ctsoftemporaryd r iffe f rences that gave rise to significant
assets and liabi a lities asofthe dates indicated:
f
(a)Due primarily to excessoftax over book depreciation.
On Oct. 15, 2024, we completed the EnLink Controlling Interest Acquisitionresulting in a diffe f rencebetween thecarrying valueofthe underlying assets acquired and thecarryovertax basis inthe assets, which resulted ina deferred tax liabi a lityof $2.0 billionrecorded as part of thepurchaseprice allocation
Sub u sequent event q -OnJan 31, 2025, wecompleted the EnLinkAcquisition by acquiring allofthe remaining and outstanding publicly held EnLink Units. EnLink is now a wholly ownedsubsidiary and included inour consolidated income taxretur t ns
As of Dec. 31, 2024, we havefed f eral netoperating loss carryforwards of $13.4 billion, themajorityofwhich have an indefinite carryforwardperiod. We expect to generate taxable income and utilize these netoperating losscarryforwards in future periods We also have loss andcreditcarryovers in multiple states, $11.0 billionofwhich, have an indefinite carryforwardperiod and $2.3 billion of whichwillexpire between2026 and2044 We have deferred tax assets related tofed f eral andstate netoperating loss andcreditcarryforwards of $3.3 billionand $3.0 billion in2024 and2023, respectively We believe that it is more likely than not that the tax benefits of certain statecarryforwards will not be utilized; therefore, werecorded a valuationallowance, whichwas increasedby$12 millionand $165 million in2024 and2023, respectively, a d nd redduc d ed by $1 million i in 2022 throughnet income
O. UNCONSOLIDATED AFFILIATES
EnLink ControllingInterestAcquisition
-As a result of the EnLinkControlling Interest Acquisition, our investments in unconsolidated affi f liates includes EnLink’s three unconsolidated affi f liates. These investments include EnLink’s 15% ownershipinterest in Matterhorn, which is a bidirectional pipeline thattransports naturalgas fromthe Waha Hub to Katy, Texas. Theother unconsolidated affi f liates acquired are not material
Investments inUnconsolidatedAffiliates - The following table sets forthour investments inunconsolidated affi f liates as of the dates indicated:
Investments inunconsolidated affi f liates (c)
(a) -In March2024, we purchased an additional 10% interest in Saddlehorn, resulting ina 40% ownershipinterest.
(b) - AsofDec. 31, 2024, the 15% interest represents EnLink’sownership interest in Matterhorn.
(c) -Includesbasis differences of $368 millionand $148 millionatDec. 31, 2024 and2023, respectively, related to property,plantand equipmentand equity-method goodwill (NoteA).
Equity in NetEarningsfro f m Investments - The following table sets forthour equity in netearnings from investmentsfor f the periods indicated:
in
y g
from investments
(a) -Forthe year endedDec. 31, 2023, includesequity in netearnings fromthe period Sept.25, 2023 throughDec. 31, 2023.
(b) -Forthe year endedDec. 31, 2024, includesequity in netearnings fromthe period Oct. 15, 2024 throughDec. 31, 2024.
We incurred expenses in transactions with unconsolidated affi f liatesof$254 million, $132 millionand $83 million for 2024, 2023 and2022, respectively,primarily related toOverland Pass and Northern Border Revenue earned and accountsreceivable from, and accounts payable to, our equity-method investeeswerenot material
We have agreements with our unconsolidated affi f liates which provide that distributions to members are made, primarily, ona prorata basis according toeach member’s ownershipinterest.
We are the operatorof Roadrunn r er,BridgeTex, MVP and Saddlehorn. In each case, we have operating agreements thatprovide forreimbursement or paymenttousfor f management services andcertain operating costs Reimbursements and payments included inoperating income inour Consolidated Statements of Income forallperiods presentedwerenot material
In 2024, we acquired anadditional 10% interest in Saddlehorn, resulting ina totalownership interest of 40% In2023, we made an equity contributionof$105 millionto Roadrunne r r, which incombination with an equalcontributionfro f mour joint ventur t epartner, was used to repayRoadrunne r r’s outstanding debt.Also in2023, we made an equity contributionof $91 millionto NorthernBorderwhich in combinationwithanequalcontributionfro f mour jointventure partner, wasused to partially repaythe outstanding balanceofits revolving credit facility andfund f capital proje o cts. In 2022, our equity contributions were not material
P. COMMITMENTS AND CONTINGENCIES
Commitments - The following tabl a esetsfor f th our transportation, volume and storagecommitmentsfor f theperiods indicated:
Regulatory,Environmental andSafet f y Matters - The operation of pipelines, terminals, plants andother facilitiesfor f the gathering,processing, fractionation, transportationand storageof products is subj u ect to numerous andcomplex laws and regulations pertaining to health,safet f yand theenvironment. As an ownerand/or operatorofthese facilities, we must comply with laws andregulations that relate to airand waterquality, hazardous andsolid wastemanagementand disposal, cultural resource protectionand otherenvironmentaland safety matters. Thecostof planning, designing, construc r ting and operating pipelines, terminals, plants andother facilitiesmust incorpor r atecompliancewith these laws, regulations andsafet f ystandards Failure to comply with these laws and regulations maytriggera varietyofadministrative, civiland potentially criminal enforcementmeasures, including citizen suits, which can include the assessmentofmonetary penalties, the imposition of remedial requirements and the issuanceofinjunctions or restrictions on operationorconstruc r tion. Management doesnot
believe that,based on currently known infor f mation, amaterialriskofnoncompliancewith these laws and regulations exists that will affe f ctadverselyour consolidated results of operations,fin f ancial conditionorcashflo f ws
LegalProceedings -Corpus r Christi TerminalPersonal Inju n ry Proceeding p j y g - Ismael Garcia,Andrew Ramirez, and Jesus Juarez Quintero,etal. broughtpersonal injuryc r ases against Magellanand co-defen f dants Triton IndustrialServices, LLC, TidalTank, Inc. and Cleveland IntegrityServices, Inc inNueces County Court inTexas The claims were originally brought in three different actions but were consolidated into a singlecaseon Mar.2,2021 Claims were asserted by or on behalf of seven individuals, and certain beneficiaries, whowereemployedbya contractor of Magellanand were inju n red, one fatally, as a result of afir f e thatoccurredonDec.5,2020, while they were cleaning a tank at our Corpus Christiterminal In2024, we reached settlement with allremaining claimants, and all settlement paymentsweremade, andwereful f ly offs f etby insuranceproceeds received.
We areaparty to various other legalproceedings that have arisen in thenormalcourse of our operations.While theresults of theseproceedings cannot be predictedwith certainty, webelieve thereasonablypossible lossesfro f msuch proceedings, individually and inthe aggregate, arenot material.Additionally, we believe theprobabl a efin f al outcome of suchproceedings will not have amaterialadverseeffect on our consolidated resultsofoperations,fin f ancialpositionorcashflo f ws
Q. LEASES
Lesseeactivity - Thefol f lowing tabl a esetsfor f th informationabout a our operating lease assets and liabi a lities included inour Consolidated Balance Sheets asofthe dates indicated:
Theweighted averageremaining lease termfor f our operating leases was9.1years and 6.3years atDec. 31, 2024 and2023, respectively Theweighted averagediscount rate forour operating leases was5 51% and5 78% atDec. 31, 2024 and2023, respectively. Ourweighted-average discount ratesrepresent therate implicit in the leaseorour incrementalborrowing rate for a termequalto the remaining termofthe lease.
Thefol f lowing tabl a esetsfor f th thematur t ity of our lease liabi a lities as of Dec. 31, 2024:
Our leasecosts andsupplementalcashflo f w infor f mationrelated to our leases forthe periods endedDec. 31, 2024 and2023, are not material
Unsatisfie f d Perfor f manceObligations -Wedonot disclose thevalue of unsatisfied performance obligations for(i) contracts with an original expected lengthofone year or less and (ii) variable considerationoncontractsfor f whichwerecognize revenue at the amount to whichwe have the right to invoice forservices performed
Thefol f lowing tabl a epresents aggregatevalue allocated tounsatisfied performance obligations as of Dec. 31, 2024, and the amountsweexpect to recognize in revenue in future periods,related primarily to firm transportationand storagecontractswith remaining contract termsranging fromtwo months to16 years:
The table above excludesvariabl a econsiderationallocated entirely to wholly unsatisfied performance obligations, wholly unsatisfied promises to transfer f distinct goods or services that arepartofa singleperformance obligationand considerationwe determine tobeful f ly constrained. Informationonthe nature of thevariabl a econsiderationexcluded and thenatur t eofthe performance obligations to whichthe variable considerationrelates can be found in thedescriptionofthe majo a rcontract types discussed inNoteA The amountswedetermined to be fully constrainedrelate tofut f turesales obligations under long-term sales contractswhere thevalue is not knownand minimumvolume agreements, which we consider to be fully constraineduntil invoiced
S. SEGMENTS
SegmentDescriptions -Our operations aredivided into four reportabl a ebusinesssegments, as follows:
•our NaturalGas Gathering and Processing segmentgathers, treats, processes and marketsnatur t al gas;
•our NaturalGas Liquids segmentgathers, treats, fractionates and transports NGLs and stores,markets anddistributes Purity NGLs;
•our NaturalGas Pipelinessegment transports,stores and marketsnatur t al gas; and
•our Refined Products and Crude segmentgathers, transports,stores, distributes,blends andmarkets Refined Products andcrude oil.
On Oct. 15, 2024, we completed the EnLink Controlling Interest Acquisition. EnLink’sresults of operations arereported across all four of our existing operating segments fromthe period of Oct. 15, 2024, to Dec. 31, 2024 On Oct. 31, 2024, we completed the MedallionAcquisition. Medallion’sresults of operations arereported inour Refined Products and Crude segmentfro f mthe period of Nov. 1, 2024, to Dec. 31, 2024
Otherand eliminations consistofcorpor r atecosts, the operating activitiesofour headquartersbuilding and relatedparking facility, the activity of our wholly ownedcaptive insurance companyand eliminations necessary to reconcile our reportabl a e segments to our Consolidated FinancialStatements.
Forthe yearsendedDec. 31, 2024, andDec. 31, 2022, we hadnosinglecustomerfro f mwhich we received10% or more of our consolidated revenues. Forthe year endedDec.31, 2023, revenuesfro f mone customer impacting all our segments represented approximately 11% of our consolidated revenues.
Thesignificant expensecategories and amounts included inthe tabl a ebelow alignwith thesegment-level informationthat is regularly provided to the chiefoperating decision maker.
OperatingSegment Information - The following tabl a es setfor f th certainselectedfin f ancial informationfor f our operating segments forthe periods indicated: Year EndedDec.31, 2024
(a) - Intersegment revenues are primarily fromcommodity sales, whichare basedonthe contracted selling price that is generally index-based andsettledmonthly. Intersegment revenues totaled $3.0 billionfor f the Natur t al GasGathering and Processing segment, $0.3 billionfor f the NaturalGas Liquids segmentand were not material forthe Refined Products and Crude and Natur t al Gas Pipelines segments.
(b) - Includes a gain of $227 millionfor f the Natur t al Gas Pipelines segmentrelated to thesaleofthree of our wholly owned interstatenatur t al gas pipelinesystems to DTMidstream, Inc.
(a) -Substantially allofour revenuesrelate tocontractswith customers.
EndedDec.31, 2023
(a) - Intersegment revenues are primarily fromcommodity sales, whichare basedonthe contracted selling price that is generally index-based andsettledmonthly Intersegment revenuesfor f the Natur t al GasGathering and Processing segmenttotaled $2.4 billionand were not
forthe NaturalGas Liquids, Refin f ed Products and Crude and Natur t al Gas Pipelines segments (b) -Includes a settlement gain of $779 millionfor f the Natur t al Gas Liquids segmentrelated to the Medford incident.
(a) - Subs u tantially allofour revenuesrelate tocontractswith customers.
(a) -Intersegmentrevenues are primarily fromcommodity sales, whichare basedonthe contracted selling price that is generally index-based andsettledmonthly Intersegment revenuesfor f the Natur t al GasGathering and Processing segmenttotaled $3.7 billionand were not material forthe NaturalGas Liquids and Natur t al Gas Pipelines segments
(a) - Subs u tantially allofour revenuesrelate tocontractswith customers.
of net incometototal segmentadjustedEBITDA
adju d sted EBITDA (a)(c)(d)
(a) - Beginning in 2023, we updatedour calculationmethodology of adju d sted EBITDA to include adju d sted EBITDA fromour unconsolidated affi f liatesusing thesamerecognitionand measurementmethods used to record equity in netearnings from investments. In prior periods, our calculation includedequity in netearnings from investments. This change resulted inanadditional $62 millionofadjusted EBITDA in2023, andwe havenot restated prior periods
(b) -The year endedDec. 31, 2024, includes transactioncosts relatedprimarily to the EnLinkAcquisitions and MedallionAcquisitionof$73 million, offs f etpartially byinterest incomeof$39 million. The year endedDec. 31, 2023, includes transactioncosts related to the Magellan Acquisitionof$158 million, offs f etpartially by interest income of $49 millionand corporatenet gainsof$41 milliononextinguishment of debt related toopenmarketrepurchases
(c) -The year endedDec. 31, 2023, includes $633 million related to the Medfor f d incident, including a settlement gain of $779 million, offs f et partially by $146 millionofthird-party fractionationcosts.
(d) -The year endedDec. 31, 2024, includes a gain of $227 millionfro f mthe interstate naturalgas pipelinedivestiture.
ITEM 9. CHANGES IN AND DISAGREEMENTSWITH ACCOUNTANTSON ACCOUNTINGAND FINANCIALDISCLOSURE
None.
ITEM 9A.CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
OurChief Executive Officer(Principal Executive Officer) and Chief FinancialOfficer (PrincipalFinancialOfficer) have concluded thatour disclosure controls andprocedur d es (asdefin f ed in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) were effe f ctive asofthe endofthe period coveredbythisreport.
Management’s Report on Internal Control over Financial Reporting
Ourmanagement isresponsible forestablishing andmaintaining adequate internal controloverfin f ancial reporting,as such term is defined inRul R e 13a-15(f) and 15d-15(f) of the Exchange Act. Underthe supe u rvisionand with theparticipationofour management, including our Principal Executive Offic f er and PrincipalFinancialOfficer, weevaluated theeffectivenessofour internal controloverfin f ancial reportingbased on thefra f mework in Internal Contro t l-Integr e ated Framework( r (2013) issued by the CommitteeofSponsoring Organizations of the Treadway Commission. Because of inherent limitations, internalcontrol overfin f ancial reportingmay notpreventordetect misstatements.Also, projections of any evaluationofeffectiveness tofut f ture periods aresubject to theriskthatcontrols may become inadequate because of changes inconditions, orthatthe degree of compliancewith thepoliciesor procedur d es maydeteriorate.Based on our evaluationunderthatfra f mework, our management concluded thatour internal controloverfin f ancial reporting was effe f ctive asofDec. 31, 2024.
Ourevaluationofthe effe f ctivenessofinternalcontroloverfin f ancial reportingexcludes the EnLink Controlling Interest Acquisitionand the Medallion Acquisition OurConsolidated Statementof Incomefor f the year endedDec. 31, 2024, includes approximately 7% and 1% oftotal revenue attributable to EnLink and Medallion, respectively, andour Consolidated Balance Sheetas of Dec. 31, 2024, includesappr a oximately 20% and 3% oftotalassets attributable to EnLink and Medallion, respectively, that were excludedfro f mmanagement’s assessmentofthe effe f ctivenessofinternalcontrols overfin f ancial reporting. In accordance with guidance issued by the SEC, companies are allowed toexclude acquisitions fromtheir assessmentofinternalcontroloverfin f ancial reporting during the firstyear subs u equent to the acquisitionwhile integrating the acquiredoperations
Theeffectivenessofour internal controloverfin f ancial reporting asofDec. 31, 2024, hasbeenauditedby PricewaterhouseCoopers LLP, an independent registered public accountingfir f m, as stated in theirreportwhich is included herein (Item 8)
Changes inInternal Control over Financial Reporting
There havebeen no changes inour internal controloverfin f ancial reportingdur d ing the quarter endedDec. 31, 2024, that have materially affe f cted, orare reasonably likelytomateriallyaffect, our internal controloverfin f ancial reporting.
ITEM 9B.OTHERINFORMATION
During the three months endedDec. 31, 2024, no director or offi f cer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement”or “non-Rule 10b5-1 trading arrangements,”aseach term is defined in item408(a) RegulationS-K
ITEM 9C.DISCLOSUREREGARDING FOREIGNJURISDICTIONS THATPREVENTINSPECTIONS
Notappl a icable
PARTIII
ITEM 10.DIRECTORS, EXECUTIVE OFFICERSAND CORPORAT R E GOVERNANCE
Directorsof the Registrant
Informationconcerning our directors isset forth inour 2025 definitive Proxy Statementand is incorporated herein by this reference.
Executive Offi f cers of the Registrant
Informationconcerning our executiveofficers is included inPart I, Item1,Business, of this Annual Report.
CompliancewithSection 16(a) of theExchangeAct
InformationoncompliancewithSection16(a) of the Exchange Act isset forth inour 2025 definitive Proxy Statementand is incorporated herein by this reference.
Code of Ethics
Informationconcerning thecode of ethics, orcode of businessconduct, is setfor f th in our 2025 definitive Proxy Statementand is incorporated herein by this reference.
CorporateGovernance
Informationconcerning our corporate governance is setfor f th in our 2025 definitive Proxy Statementand is incorporated herein by this reference.
InsiderTrading Policy
We have adopted insidertrading policies and procedur d es that govern thepurchase, sale andother dispositionofour securities by our directors, offi f cers and employees that we believe arereasonablydesigned to promote compliancewith insidertrading laws,rul r es andregulations and the listingstandardsofthe NYSE Acopy of our Insider Trading Policyisfile f dwiththis Annual Reportas Exhibit19.
ITEM 11.EXECUTIVE COMPENSATION
Informationonexecutive compensation isset forth inour 2025 definitive Proxy Statementand is incorporated herein by this reference.
Security Ownershipof CertainBeneficial Owners
Informationconcerning theownership of certain beneficial owners is setfor f th in our 2025 definitive Proxy Statementand is incorporated herein by this reference.
Security OwnershipofManagement
Informationonsecurity ownershipof directors and offi f cers isset forth inour 2025 definitive Proxy Statementand is incorporated herein by this reference.
Equity Compensation Plan Information
Thefol f lowing tabl a esetsfor f th certain infor f mationconcerning our equity compensation plans as of Dec. 31, 2024:
Plan Category
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrantsand Rights
Weighted-Average Exercise Priceof Outstanding Options, Warrantsand Rights (3)
Number of Securities RemainingAvailableFor Future Issuance Under Equity Compensation Plans(4)
Equity compensation plans approvedby securityholders (1)2,708,539 —4,695,916 Equity
4,695,916
(1) -Includessharesgranted underour Employee StockPurchase Plan, Employee Stock Award Program andrestrictedstock incentiveunit awards andperformance unitawardsgranted underour former Equity Compensation Plan, our Equity Incentive Planand the assumed former Magellan Midstream Partners, L P., Long-Term Incentive Plan. Fora brief descriptionofthe material featur t es of theseplans, see Note L ofthe Notes toConsolidated FinancialStatements inthisAnnual Report.
(2) -Includesour NQDC Plan, Deferred Compensation Planfor f Non-EmployeeDirectors and our former StockCompensation Planfor f NonEmployeeDirectors. Fora brief descriptionofthe material featur t es of theseplans,see Notes L and M of the Notes to Consolidated FinancialStatements inthisAnnual Report.
(3) -There is no exercise price associatedwith restrictivestock incentiveunitawards and performance unitawards. Compensationdefer f red into our commonstock underour Deferred Compensation Planfor f Non-EmployeeDirectors isdistributed to participants at fair market valueonthe date of distribution. Theprice used forthese plans tocalculate theweighted-average exercise price inthe tabl a e is $100.40, whichrepresents the 2024 year-end closing price of our common stockonthe NYSE.
(4) -Includes 1,459,223, 2,379 and 3,234,314 shares availabl a efor f future issuance underour Employee Stock Purchase Plan, Employee Stock Award Program and Equity Incentive Plan, respectively.
ITEM 13. CERTAIN RELATIONSHIPSAND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE
Informationoncertain relationships andrelated transactions anddirector independence isset forth inour 2025 definitive Proxy Statementand is incorporated herein by this reference.
ITEM 14.PRINCIPALACCOUNTINGFEESAND SERVICES
Informationconcerning theprincipalaccountant’sfees f andservices is setfor f th in our 2025 definitive Proxy Statementand is incorporated herein by this reference.
(1)Financial Statements ( )
(2)Financial Statements Schedules ( )
Allschedul d es have been omittedbecause of theabs a ence of conditions underwhich they arerequired.
(3)Exhibits ( )
A
2 greement and Planof Merger, dated asof May 14, 2023, by and among ONEOK, Inc.,Otter MergerSub, LLC and Magellan Midstream Partners, L P (incorpo r ratedby refer f ence from Exhibit2 1 to ONEOK, Inc.’s Current ReportonForm8-K,fil f ed May15, 2023 (File No. 1-13643)).
2 1Purchase Agreement, dated asofAug 28, 2024, by and among ONEOK, Inc.,GIP III Stetson I, L.P., GIP III Stetson II, L.P. and EnLink Midstream Manager, LLC (incorpo r ratedby refer f ence from Exhibit2.1 to ONEOKInc.’sCurrent ReportonForm8-K,file f dAug 30, 2024 (File No 1-13643)).
2 P 2 urchase and Sale Agreement, dated asofAug 28, 2024, by and among ONEOK, Inc.,GIP IIITrophy GP 2, LLC, GIPIIITrophy Acquisition Partners, L.P. and Medallion Management, L.P. (incorpor r ated by referencefro f m Exhibit2.2 to ONEOK Inc.’s Current ReportonForm8-K,file f dAug 30, 2024 (File No. 1-13643)).
2.3 Agreementand Plan of Merger, dated as of Nov. 24, 2024, by and among ONEOK, Inc., ElkMerger SubI u , L L C., ElkMerger SubI u I, L L C., EnLink Midstream LLC and EnLink Midstream Manager, LLC (incorpor r ated by referencefro f m Exhibit2.1 to ONEOK Inc.’s Current ReportonForm8-K,file f d Nov. 25, 2024 (File No. 1-13643)). A 3 mended and Restated Certific f ateof Incorpor r ationofONEOK, Inc., dated July 3, 2017, as amended (incorpor r ated by referencefro f m Exhibit3.2 to ONEOK, Inc.’s QuarterlyReportonForm 10-Qfor f the quarterended Sept. 30, 2017, filed Nov. 1, 2017 (File No. 1-13643)).
3 1 Amended and Restated By-lawsofONEOK, Inc. (incorpor r ated by referencefro f m Exhibit3 1 to ONEOK Inc.’s Current ReportonForm8-KfiledFeb.24, 2023 (File No 1-13643)).
3.2 Certific f ateofDesignation forConvertible Prefer f red Stock of WAI, Inc. (now ONEOK, Inc.)file f d Nov. 21, 2008 (incorpor r ated by referencefro f mExhibit3.1 to ONEOK, Inc.’s QuarterlyReportonForm10-Qfor f the quarterended June 30, 2012, filedAug 1, 2012 (File No. 1-13643)).
3 C 3 ertific f ateofDesignation forSeriesC Participating Preferred Stock of ONEOK, Inc. filed Nov. 21, 2008 (incorpor r ated by referencefro f m ExhibitNo. 3.1 to ONEOK, Inc.’s QuarterlyReportonForm 10-Qfor f the quarterended June 30, 2012, filedAug 1, 2012 (File No. 1-13643)).
3 4Certific f ateofDesignation, Prefer f ences and RightsofSeries ENon-Voting Perpetua t l Preferred Stock of ONEOK, Inc. filedApril20, 2017 (incorpo r ratedby refer f ence from ExhibitNo. 3.1 to ONEOK, Inc.’s Current ReportonForm8-KfiledApril20, 2017 (File No. 1-13643)).
4 Form of CommonStock Certific f ate (incorporated by referencefro f m Exhibit 1 to ONEOK, Inc.’s RegistrationStatement on Form 8-Afile f d Nov. 21, 1997 (File No 1-13643)).
4.1 Second Suppl u emental Indentur t e, dated asofSept. 25, 1998, between ONEOK, Inc. and Chase Bank of Texas, as trus r tee, with respectto the 6.875% Debentur t es due 2028 (incorpor r ated by referencefrom f Exhibit 5(b) to ONEOK, Inc.’s Current ReportonForm8-K/A K filed Oct.2, 1998 (File No 1-13643)).
4. F 2 ifth f Suppl u emental Indentur t e, dated asofJune 30, 2017, by and among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnershipand TheBankofNew YorkMellon Trust, as trus r tee (incorporated by referencefro f m Exhibit4 1 to ONEOK Inc.’s Current ReportonForm8-Kfiled July 3, 2017 (File No. 1-13643)).
4.3 SixthSupplemental Indentur t e, dated asofSept. 25, 2023, by and among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and TheBank of New York Mellon Trust, as trustee (incorpor r ated by referencefro f m Exhibit4.1 to ONEOK Inc.’s Current ReportonForm8-Kfiled Sept. 25, 2023 (File No 1-13643)).
4.4 Indentur t e, dated asofDec. 28, 2001, betweenONEOK, Inc. and SunTrust Bank, as trus r tee (incorporated by referencefro f m Exhibit4 1 to AmendmentNo. 1 toONEOK, Inc.’s RegistrationStatement on Form S-3fil f ed Dec. 28, 2001 (File No 333-65392)).
4.5 Third Supplemental Indentur t e, dated asofJune 17, 2005, between ONEOK, Inc. and SunTrust Bank, as trus r tee, with respectto the 6.00% Senior Notesdue d 2035 (incorpor r ated by referencefro f m Exhibit4 3 to ONEOK, Inc.’s Current ReportonForm8-Kfiled June 17, 2005 (File No. 1-13643)).
4.6FourthSupplemental Indentur t e, dated asofJune 30, 2017, by and among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respect to the6.00% Senior Notesdue d 2035 (incorpo r ratedby refer f ence from Exhibit4.3 to ONEOK Inc.’s Current ReportonForm8-Kfiled July3,2017 (File No. 1-13643)).
4.7 Fifth f Suppl u emental Indentur t e, dated asofJuly13, 2017, by and among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnership and U.S.BankNationalAssociation, as trus r tee, with respect to the4 95% Senior Notesdue d 2047 (incorpo r ratedby refer f ence from Exhibit4.2 to ONEOK Inc.’s Current ReportonForm8-Kfiled July13, 2017 (File No. 1-13643)).
4.8 Indentur t e, dated asofJan.26, 2012, among ONEOK, Inc. and U.S.BankNationalAssociation, as trus r tee (incorpor r ated by reference to Exhibit4 1 to ONEOK, Inc.’s Current ReportonForm8-Kfiled Jan.26, 2012 (File No. 1-13643)).
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Third Supplemental Indentur t e, dated asofJune 30, 2017, by and among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee (incorpor r ated by referencefro f m Exhibit4.2 to ONEOK Inc.’s Current ReportonForm8-Kfiled July3, 2017 (File No. 1-13643)).
Fourth Suppl u emental Indentur t e, dated asofJuly13, 2017, by and among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respect to the4.00% Senior Notesdue d 2027 (incorpo r ratedby refer f ence from Exhibit4.1 to ONEOK Inc.’s Current ReportonForm8-Kfiled July13, 2017 (File No. 1-13643)).
4.11FifthSupplemental Indentur t e, dated asofJuly13, 2017, by and among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnership and U.S.BankNationalAssociation, as trus r tee, with respect to the4 95% Senior Notesdue d 2047 (incorpo r ratedby refer f ence from Exhibit4.2 to ONEOK Inc.’s Current ReportonForm8-Kfiled July13, 2017 (File No. 1-13643)).
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SixthSupplemental Indentur t e, dated asofJuly 2,2018, among ONEOK, Inc.,ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 4.55% Senior Notesdue d 2028 (incorpo r ratedby refer f ence from ExhibitNo. 4.1 to ONEOK, Inc.’s Current ReportonForm8-Kfiled July 2,2018 (File No. 1-13643))
SeventhSupplemental Indentur t e, dated asofJuly 2,2018, among ONEOK, Inc.,ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 5.20% Senior Notesdue d 2048 (incorpo r ratedby refer f ence from ExhibitNo. 4.2 to ONEOK, Inc.’s Current ReportonForm8-Kfiled July 2,2018 (File No. 1-13643)
EighthSupplemental Indentur t e, dated asof March13, 2019, among ONEOK, Inc.,ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 4.35% Senior Notesdue d 2029 (incorpo r ratedby refer f ence from ExhibitNo. 4.2 to ONEOK, Inc.’s Current ReportonForm8-Kfiled March13, 2019 (File No. 1-13643)).
NinthSupplemental Indentur t e, dated March13, 2019, among ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnership and Wells FargoBank, N A., as trustee, with respect to the5 20% Senior Notesdue d 2048 (incorpor r ated by referencefro f m Exhibit4.3 to ONEOKPartners, L.P.’s Current Reporton Form 8-K filed March13, 2019 (File No 1-12202)).
4.16 TenthSupplemental Indentur t e, dated asofAug 15, 2019, among ONEOK, Inc.,ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 2.75% Senior Notesdue d 2024 (incorpo r ratedby refer f ence from ExhibitNo. 4.1 to ONEOK, Inc.’s Current ReportonForm8-KfiledAug. 15, 2019 (File No. 1-13643)).
4.17 Eleventh Suppl u emental Indentur t e, dated asofAug 15, 2019, among ONEOK, Inc.,ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 3.40% Senior Notesdue d 2029 (incorpo r ratedby refer f ence from ExhibitNo. 4.2 to ONEOK, Inc.’s Current ReportonForm8-KfiledAug 15, 2019 (File No 1-13643)).
4.18TwelfthSupplemental Indentur t e, dated asofAug. 15, 2019, among ONEOK, Inc.,ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 4.45% Senior Notesdue d 2049 (incorpo r ratedby refer f ence from ExhibitNo. 4.3 to ONEOK, Inc.’s Current ReportonForm8-KfiledAug 15, 2019 (File No 1-13643)).
4.19 Thirteenth Suppl u emental Indentur t e, dated asof March10, 2020, among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respect to the2 200% Senior Notesdue d 2025 (incorpo r ratedby refer f ence from ExhibitNo. 4.1 to ONEOK, Inc.’s Current ReportonForm8-Kfiled March10, 2020 (File No.1-13643)).
4.20 Fourteenth Suppl u emental Indentur t e, dated asof March10, 2020, among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respect to the 3 100% Senior Notesdue d 2030 (incorpo r ratedby refer f ence fromExhibitNo. 4.2 to ONEOK, Inc.’s Current ReportonForm8-K filed March10, 2020 (File No. 1-13643)).
4.21 FifteenthIndentur t e, dated asofMarch10, 2020, among ONEOK, Inc.,ONEOKPartners, L.P., ONEOK Partners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 4.500% Senior Notesdue d 2050 (incorpo r ratedby refer f ence from ExhibitNo. 4.3 to ONEOK, Inc.’s Current ReportonForm8-Kfiled March20, 2020 (File No 1-13643)).
4.22 SixteenthSupplemental Indentur t e, dated asof May 7, 2020, among ONEOK, Inc.,ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 5.850% Senior Notesdue d 2026 (incorpor r ated by referencefro f m ExhibitNo. 4.1 to ONEOK, Inc.’s Current ReportonForm8-Kfiled May 7, 2020 (File No. 1-13643)).
4.23 Seventeenth Supp u lemental Indentur t e, dated asof May 7, 2020, among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respect to the6 350% Senior Notesdue d 2031 (incorpo r ratedby refer f ence from ExhibitNo. 4.2 to ONEOK, Inc.’s Current ReportonForm8-Kfiled May 7, 2020 (File No 1-13643)).
4.24 EighteenthSupplemental Indentur t e, dated asof May 7, 2020, among ONEOK, Inc.,ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 7.150% Senior Notesdue d 2051 (incorpor r ated by referencefro f m ExhibitNo. 4.3 to ONEOK, Inc.’s Current ReportonForm8-Kfiled May 7, 2020 (File No. 1-13643)).
4.25 Nineteenth Suppl u emental Indentur t e, dated asofNov. 18, 2022, among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank Trus r tCompany, National Association(successor in interesttoU.S.BankNationalAssociation), as trustee, with respect to the6 100% Senior Notesdue d 2032 (incorpor r ated by referencefro f m ExhibitNo. 4.1 to ONEOK, Inc.’s Current Reporton Form 8-K filed Nov 18, 2022 (File No 1-13643)).
4.26 Twentieth Suppl u emental Indentur t e, dated asofAug 24, 2023, among ONEOK, Inc.,ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respectto the 5.550% Senior Notesdue d 2026 (incorpor r ated by referencefro f m Exhibit4 1 to ONEOK Inc.’s Current ReportonForm8-K,fil f ed Aug. 25, 2023 (File No. 1-13643)).
4.27 Twenty-First Suppl u emental Indentur t e, dated asofAug. 24, 2023, among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respect to the5.650% Senior Notesdue d 2028 (incorpo r ratedby refer f ence from Exhibit4.2 to ONEOK Inc.’s Current ReportonForm8-K,file f dAug 25, 2023 (File No 1-13643)).
4.28Twenty-Second Suppl u emental Indentur t e, dated asofAug 24, 2023, among ONEOK, Inc.,ONEOK Partners, L P., ONEOKPartners Intermediate Limited Partnership and U.S.BankNationalAssociation, as trus r tee, with respectto the 5.800% Senior Notesdue d 2030 (incorpor r ated by referencefro f m Exhibit4 3 to ONEOKInc.’sCurrent ReportonForm8-K,file f dAug 25, 2023 (File No 1-13643)).
4.29 Twenty-Third Suppl u emental Indentur t e, dated asofAug 24, 2023, among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respect to the6 050% Senior Notesdue d 2033 (incorpo r ratedby refer f ence from Exhibit4.4 to ONEOK Inc.’s Current ReportonForm8-K,file f dAug. 25, 2023 (File No. 1-13643)).
4.30 Twenty-Fourth Suppl u emental Indentur t e, dated asofAug. 24, 2023, among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnershipand U.S. Bank NationalAssociation, as trus r tee, with respect to the6.625% Senior Notesdue d 2053 (incorpo r ratedby refer f ence from Exhibit4.5 to ONEOK Inc.’s Current ReportonForm8-K,file f dAug 25, 2023 (File No 1-13643)).
4.31Twenty-Fifth f Suppl u emental Indentur t e, dated asofSept. 25, 2023, among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnership, Magellan Midstream Partners, L.P. and U.S. Bank NationalAssociation, as trus r tee (incorporated by referencefro f m Exhibit4 3 to ONEOK Inc.’s Current ReportonForm8-K,file f d Sept. 25, 2023 (File No. 1-13643)).
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Twenty-Sixth Suppl u emental Indentur t e, dated asofSept. 24, 2024, among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnership, Magellan Midstream Partners, L P and U.S. Bank NationalAssociation, as trus r tee, with respect to 4.250% Notesdue d 2027 (incorpor r ated by referencefrom f Exhibit4.2 to ONEOK Inc.’s Current ReportonForm8-K,file f d Sept. 24, 2024 (File No 1-13643)).
Twenty-SeventhSupplemental Indenture, dated as of Sept.24, 2024, among ONEOK, Inc.,ONEOK Partners, L.P., ONEOKPartners Intermediate Limited Partnership, Magellan Midstream Partners, L.P. and U.S. Bank NationalAssociation, as trus r tee, with respect to 4.400% Notesdue d 2029 (incorpor r ated by referencefro f m Exhibit4.3 to ONEOK Inc.’s Current ReportonForm8-K,file f d Sept. 24, 2024 (File No. 1-13643)).
Twenty-EighthSupplemental Indentur t e, dated asofSept. 24, 2024, among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and U.S. Bank NationalAssociation, as trus r tee, with respect to 4.750% Notesdue d 2031 (incorpor r ated by referencefrom f Exhibit4.4 to ONEOK Inc.’s Current ReportonForm8-K,file f d Sept. 24, 2024 (File No 1-13643)).
Twenty-Ninth Suppl u emental Indentur t e, dated asofSept. 24, 2024, among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L.P. and U.S. Bank NationalAssociation, as trus r tee, with respect to 5.050% Notesdue d 2034 (incorpor r ated by referencefrom f Exhibit4.5 to ONEOK Inc.’s Current ReportonForm8-K,file f d Sept. 24, 2024 (File No. 1-13643)).
4.36 Thirtieth Suppl u emental Indentur t e, dated asofSept. 24, 2024, among ONEOK, Inc.,ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and U.S. Bank NationalAssociation, as trus r tee, with respect to 5.700% Notesdue d 2054 (incorpor r ated by referencefrom f Exhibit4.6 to ONEOK Inc.’s Current ReportonForm8-K,file f d Sept. 24, 2024 (File No 1-13643)).
4.37 Thirty-First Suppl u emental Indentur t e, dated asofSept. 24, 2024, among ONEOK, Inc.,ONEOKPartners, L.P.,ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L.P. and U.S. Bank NationalAssociation, as trus r tee, with respect to 5.850% Notesdue d 2064 (incorpor r ated by referencefrom f Exhibit4.7 to ONEOK Inc.’s Current ReportonForm8-K,file f d Sept. 24, 2024 (File No. 1-13643)).
4.38 Indentur t e, dated asofSept. 25, 2006, betweenONEOKPartners, L.P. and Wells FargoBank, N.A., as trus r tee (incorporated by reference to Exhibit4 1 to ONEOKPartners, L P.’sCurrent ReportonForm8-K filed Sept. 26, 2006 (File No. 1-12202)).
4.39 Third Supplemental Indentur t e, dated asofSept. 25, 2006, amongONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnership and Wells FargoBank, N.A., as trustee, with respect to the6.65% Senior Notesdue d 2036 (incorpor r ated by reference to Exhibit4.4 to ONEOKPartners, L P.’sCurrent Reporton Form 8-K filed Sept.26, 2006 (File No.1-12202)).
4.40 Fourth Suppl u emental Indentur t e, dated asofSept. 28, 2007, among ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnership and Wells FargoBank, N A., as trustee, with respect to the6 85% Senior Notesdue d 2037 (incorpor r ated by reference to Exhibit4.2 to ONEOKPartners, L.P.’sCurrent Reporton Form 8-K filed Sept.28, 2007 (File No.1-12202)).
4.41 SeventhSupplemental Indentur t e, dated asofJan.26, 2011, among ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnership and Wells FargoBank, N A., as trustee, with respect to the6 125% Senior Notesdue d 2041 (incorpor r ated by referencefro f m Exhibit4 3 to ONEOKPartners, L P ’s Current Reporton Form 8-K filed Jan. 26, 2011 (File No. 1-12202)).
4.42 TwelfthSupplemental Indentur t e, dated asofSept. 12, 2013, among ONEOKPartners, L P., ONEOK Partners Intermediate Limited Partnershipand WellsFargo Bank, N.A., as trustee, with respect to the 6.200% Senior Notesdue d 2043 (incorpo r ratedby refer f ence to Exhibit4.4 to ONEOKPartners, L P.’sCurrent ReportonForm8-Kfiled Sept. 12, 2013 (File No. 1-12202)).
4.43 Fourteenth Suppl u emental Indentur t e, dated asof March20, 2015, among ONEOKPartners, L.P., ONEOK Partners Intermediate Limited Partnershipand WellsFargo Bank, N A., as trustee, with respect to the4 90% Senior Notesdue d 2025 (incorpor r ated by reference to Exhibit4.3 to ONEOKPartners, L.P.’sCurrent Report on Form 8-K filed on March20, 2015 (File No 1-12202)).
4.44 FifteenthSupplemental Indentur t e, dated asofJune 30, 2017, by and among ONEOKPartners, L P., ONEOK, Inc.,ONEOKPartners Intermediate Limited Partnership and Wells FargoBank, N.A., as trustee (incorpor r ated by referencefro f m Exhibit4 1 to ONEOK, Partners, L P.’sCurrent ReportonForm8-Kfiled July 3, 2017 (File No. 1-12202)).
4.45 SixteenthSupplemental Indentur t e, dated asofSept. 25, 2023, among ONEOKPartners, L P., ONEOK, Inc., ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and Computershare Trus r tCompany,N A., as trustee (incorpor r ated by referencefro f m Exhibit4.4 to ONEOK Inc.’s Current ReportonForm8-K,fil f ed Sept.25, 2023 (File No 1-13643)).
4.46 Indentur t e, dated asofApril19, 2007, between Magellan Midstream Partners, L.P. and U.S. Bank National Association, as trus r tee (incorporated by referencefro f m Exhibit4 1 to Magellan Midstream Partners, L.P.’s Form 8-K, filedApril20, 2007 (File No. 1-16335)).
4.47 FirstSupplemental Indentur t e, dated asofApril19, 2007, between Magellan Midstream Partners, L.P. and U.S. Bank NationalAssociation, as trus r tee, with respect to the6 400% Senior Notesdue d 2037 (incorpo r rated by referencefro f m Exhibit4.2 to Magellan Midstream Partners, L.P.’s Form 8-K, filedApril20, 2007 (File No 1-16335)).
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Second Suppl u emental Indentur t e, dated asofSept. 25, 2023, among Magellan Midstream Partners, L P., ONEOK, Inc.,ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnership and U.S.Bank Trus r tCompany, NationalAssociation, as trus r tee (incorporated by referencefro f m Exhibit4.5 to ONEOK Inc.’s Current ReportonForm8-K,file f d Sept. 25, 2023 (File No. 1-13643)).
Third Supplemental Indentur t e, dated asofDec. 13, 2023, by and among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and U.S. Bank Trus r tCompany, NationalAssociation, as trus r tee (incorporated by referencefro f m Exhibit4.1 to ONEOK Inc.’s Current ReportonForm8-KfiledDec 14, 2023 (File No. 1-13643)).
4.50 Indentur t e, dated asofAug 11, 2010, between Magellan Midstream Partners, L P and U.S. Bank National Association, as trus r tee (incorporated by referencefro f m Exhibit4 1 to Midstream Partners, L P.’sForm8-K, filedAug 16, 2010 (File No 1-16335)).
4.51 Second Suppl u emental Indentur t e, dated asofNov. 9, 2012, between ONEOK, Inc. (successor in interestto Magellan Midstream Partners, L P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 4.200% Senior Notesdue d 2042 (incorpo r ratedby refer f ence from Exhibit4.2 to Magellan Midstream Partners, L P ’s Current ReportonForm8-K,fil f ed Nov. 9, 2012 (File No. 1-16335)).
4.52 Third Supplemental Indentur t e, dated asofOct 10, 2013, between ONEOK, Inc. (successor in interestto Magellan Midstream Partners, L.P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 5.15% Senior Notesdue d 2043 (incorpo r ratedby refer f ence from Exhibit4.2 to Magellan Midstream Partners, L.P.’s Current ReportonForm8-K,fil f ed Oct. 10, 2013 (File No. 1-16335)).
4.53 Fourth Suppl u emental Indentur t e, dated asof March 4, 2015, between ONEOK, Inc. (successor in interestto Magellan Midstream Partners, L.P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 3.20% Senior Notesdue d 2025 (incorpo r ratedby refer f ence fromExhibit4.2 to MagellanMidstream Partners, L.P.’s Current ReportonForm8-K,fil f ed March4,2015 (File No. 1-16335)).
4.54 FifthSupplemental Indentur t e, dated asof March 4, 2015, between ONEOK, Inc. (successor in interestto Magellan Midstream Partners, L P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 4.20% Senior Notesdue d 2045 (incorpo r ratedby refer f ence from Exhibit4.3 to Magellan Midstream Partners, L P ’s Current ReportonForm8-K,fil f ed March4,2015 (File No. 1-16335)).
4.55 SixthSupplemental Indentur t e, dated asofFeb.29, 2016, betweenONEOK, Inc. (successor in interestto Magellan Midstream Partners, L.P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 5.00% Senior Notesdue d 2026 (incorpo r ratedby refer f ence from Exhibit4.2 to Magellan Midstream Partners, L.P.’s Current ReportonForm8-K,fil f ed Feb. 29, 2016 (File No. 1-16335)).
4.56 SeventhSupplemental Indentur t e, dated asofSept. 13, 2016, between ONEOK, Inc. (successor in interestto Magellan Midstream Partners, L P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 4.25% Senior Notesdue d 2046 (incorpo r ratedby refer f ence from Exhibit4.2 to Magellan Midstream Partners, L P ’s Current ReportonForm8-K,fil f ed Sept 13, 2016 (File No. 1-16335)).
4.57 EighthSupplemental Indentur t e, dated asofOct. 3,2017, between ONEOK, Inc. (successor in interestto Magellan Midstream Partners, L P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 4.200% Senior Notesdue d 2047 (incorpo r ratedby refer f ence from Exhibit4.2 to Magellan Midstream Partners, L P ’s Current ReportonForm8-K,fil f ed Oct. 3, 2017 (File No. 1-16335)).
4.58 NinthSupplemental Indentur t e, dated asofJan 18, 2019, betweenONEOK, Inc. (successor in interestto Magellan Midstream Partners, L.P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 4.850% Senior Notesdue d 2049 (incorpo r ratedby refer f ence from Exhibit4.2 to Magellan Midstream Partners, L.P.’s Current ReportonForm8-K,fil f ed Jan. 18, 2019 (File No. 1-16335)).
4.59 TenthSupplemental Indentur t e, dated asofAug. 19, 2019, between ONEOK, Inc. (successor in interestto Magellan Midstream Partners, L P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 3.950% Senior Notesdue d 2050 (incorpo r ratedby refer f ence from Exhibit4.2 to Magellan Midstream Partners, L P ’s Current ReportonForm8-K,fil f ed Aug. 19, 2019 (File No. 1-16335)).
4.60 Eleventh Suppl u emental Indentur t e, dated asof May 20, 2020, between ONEOK, Inc. (successor in interestto Magellan Midstream Partners, L.P.), and U.S. Bank NationalAssociation, as trus r tee, with respectto the 3.250% Senior Notesdue d 2030 (incorpo r ratedby refer f ence from Exhibit4.2 to Magellan Midstream Partners, L.P.’s Current ReportonForm8-K,fil f ed May 20, 2020 (File No. 1-16335))
4.61TwelfthSupplemental Indentur t e, dated asofSept. 25, 2023, among Magellan Midstream Partners, L P., ONEOK, Inc.,ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnership and U.S.Bank Trus r tCompany, NationalAssociation, as trus r tee (incorporated by referencefro f m Exhibit4.6 to ONEOK Inc.’s Current ReportonForm8-K,file f d Sept. 25, 2023 (File No. 1-13643)).
4.62 Thirteenth Suppl u emental Indentur t e, dated asofDec. 13, 2023, by and among ONEOK, Inc.,ONEOK Partners, L P., ONEOKPartners Intermediate Limited Partnership, Magellan Midstream Partners, L P and U.S. Bank Trus r tCompany, NationalAssociation, as trus r tee, (incorpor r ated by referencefro f m Exhibit4.2 to ONEOK Inc.’s Current ReportonForm8-KfiledDec 14, 2023 (File No 1-13643)).
4.63 Indentur t e, dated asof March19, 2014, by andbetween EnLinkMidstream Partners, LP and Wells Fargo Bank, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4.2 to EnLinkMidstream Partners, LP’sCurrent ReportonForm8-K,fil f ed March21, 2014 (File No.001-36340)).
4.64 FirstSupplemental Indentur t e, dated asof March19, 2014, by andbetween EnLinkMidstream Partners, LP and Wells FargoBank, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4.3 to EnLink Midstream Partners, LP’s Current ReportonForm8-K,file f d March21, 2014 (File No.001-36340)).
4.65
Second Suppl u emental Indentur t e, dated asofNov. 12, 2014, by andbetween EnLinkMidstream Partners, LP and Wells FargoBank, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4.3 to EnLink Midstream Partners, LP’s Current ReportonForm8-K,file f d Nov. 12, 2014 (File No.001-36340)).
4.66 Third Supplemental Indentur t e, dated asof May 12, 2015, by andbetween EnLinkMidstream Partners, LP and Wells FargoBank, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4.3 to EnLink Midstream Partners, LP’s Current ReportonForm8-K,file f d May 12, 2015 (File No.001-36340)).
4.67 Fourth Suppl u emental Indentur t e, dated asofJuly14, 2016, by andbetween EnLinkMidstream Partners, LP and Wells FargoBank, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4.2 to EnLink Midstream Partners, LP’s Current ReportonForm8-K,file f d July14, 2016 ((File No.001-36340)).
4.68 FifthSupplemental Indentur t e, dated asof May 11, 2017, by andbetween EnLinkMidstream Partners, LP and Wells FargoBank, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4.2 to EnLink Midstream Partners, LP’s Current ReportonForm8-K,file f d May 11, 2017 (File No.001-36340)).
4.69 Indentur t e, dated asofApril 9, 2019, by andbetween EnLinkMidstream, LLC and Wells FargoBank, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4 1 to EnLinkMidstream, LLC’s Current ReportonForm8-K,fil f ed April9,2019 (File No.001-36336)).
4.70 FirstSupplemental Indentur t e, dated asofApril 9, 2019, by and among EnLinkMidstream, LLC, EnLink Midstream Partners, LP, and Wells FargoBank, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4.2 to EnLinkMidstream, LLC’sCurrent ReportonForm8-K,file f dApril 9, 2019 (File No. 001-36336)).
4.71 Indentur t e, dated asofDec. 17, 2020, by and among EnLinkMidstream, LLC, as issuer, EnLink Midstream Partners, LP, as guarantor, and WellsFargo Bank, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4 1 to EnLinkMidstream, LLC’s Current ReportonForm8-K,file f dDec. 18, 2020 (File No.001-36336)).
4.72 Indentur t e, dated asofAug 31, 2022, by and among EnLinkMidstream, LLC, as issuer, EnLink Midstream Partners, LP, as guarantor, and Computershare Trust Company,N A., as trustee (incorpor r ated by reference to Exhibit4 1 to EnLinkMidstream, LLC’sCurrent ReportonForm8-K,file f donAug 31, 2022 (File No. 001-36336)).
4.73 Indentur t e, dated asofAug. 15, 2024, by and among EnLinkMidstream, LLC, as issuer, EnLink Midstream Partners, LP, as guarantor, and Computershare Trust Company,N A., as trustee (incorpor r ated by reference to Exhibit4.1 to EnLinkMidstream, LLC’sCurrent ReportonForm8-K,file f dAug. 15, 2024 (File No. 001-36336)).
4.74 FirstSupplemental Indentur t e, dated asofAug 15, 2024, by and among EnLinkMidstream, LLC, as issuer, EnLinkMidstream Partners, LP, asguarantor, and Computershare Trust Company,N.A., as trustee (incorpor r ated by reference to Exhibit4.2 to EnLinkMidstream, LLC’s Current ReportonForm8-K,file f d Aug. 15, 2024 (File No. 001-36336)).
4.75 FirstSupplemental Indentur t e, dated asofJan. 31, 2025, by and among Elk MergerSub II, L.L.C., as issuer, EnLink Midstream Partners, LP, as guarantor, and Computershare Trust Company,N A., as trustee (incorpor r ated by reference to Exhibit4.1 to EnLinkMidstream, LLC’s Current ReportonForm8-K,file f d Jan. 31, 2025, File No.001-36336)
4.76
4.77
4.78
Second Suppl u emental Indentur t e, dated asofJan 31, 2025, by and among Elk MergerSub II, L L C., as issuer, EnLink Midstream Partners, LP, as guarantor, and Computershare Trust Company,N.A., as trustee (incorpor r ated by reference to Exhibit4.2 to EnLink Midstream, LLC’s Current ReportonForm8-K,file f d Jan. 31, 2025, File No.001-36336).
FirstSupplemental Indentur t e, dated asofJan. 31, 2025, by and among Elk MergerSub II, L.L.C., as issuer, EnLink Midstream Partners, LP, as guarantor, and Computershare Trust Company,N A., as trustee (incorpor r ated by reference to Exhibit4.3 to EnLinkMidstream, LLC’s Current ReportonForm8-K,file f d Jan. 31, 2025, File No.001-36336)
Second Suppl u emental Indentur t e, dated asofJan 31, 2025, by and among Elk MergerSub II, L L C., as issuer, EnLink Midstream Partners, LP, as guarantor, and Computershare Trust Company,N.A., as trustee (incorpor r ated by reference to Exhibit4.4 to EnLinkMidstream, LLC’s Current ReportonForm8-K,file f d Jan. 31, 2025, File No.001-36336).
4.79 Third Supplemental Indentur t e, dated asofJan 31, 2025, by and among ONEOK, Inc., ElkMerger SubI u I, L L C., EnLink Midstream Partners, LP, ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and Computershare Trust Company,N A., as trustee (incorpor r ated by reference to Exhibit4.5 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb.5,2025 (File No. 1-13643)).
4.80 Second Suppl u emental Indentur t e, dated asofJan 31, 2025, by and among ONEOK, Inc., ElkMerger SubI u I, L.L.C., EnLink Midstream Partners, LP, ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and Computershare Trust Company,N A., as trustee (incorpor r ated by reference to Exhibit4.6 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb.5,2025 (File No. 1-13643)).
4.81 Second Suppl u emental Indentur t e, dated asofJan 31, 2025, by and among ONEOK, Inc., ElkMerger SubI u I, L.L.C., EnLink Midstream Partners, LP, ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and Computershare Trust Company,N A., as trustee (incorpor r ated by reference to Exhibit4.7 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb.5,2025 (File No. 1-13643)).
4.82 Third Supplemental Indentur t e, dated asofJan 31, 2025, by and among ONEOK, Inc., ElkMerger SubI u I, L.L.C., EnLink Midstream Partners, LP, ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and Computershare Trust Company,N A., as trustee (incorpor r ated by reference to Exhibit4.8 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb.5,2025 (File No. 1-13643)).
4.83 SixthSupplemental Indentur t e, dated asofJan 31, 2025, by and among ONEOK, Inc., EnLink Midstream Partners, LP, Elk MergerSub II, L.L.C.,ONEOKPartners, L.P., ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P and Computershare Trust Company,N A., as trustee (incorpor r ated by reference to Exhibit4.9 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb.5,2025 (File No. 1-13643)).
4.84 SeventhSupplemental Indentur t e, dated asofJan 31, 2025, by and among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P., EnLink Midstream Partners, LP, ElkMerger SubI u I, L L C. and The Bank of New York Mellon Trust Company, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4 10 to ONEOK, Inc.’s Current Report on Form 8-K filed Feb. 5, 2025 (File No 1-13643)).
4.85 Fourteenth Suppl u emental Indentur t e, dated asofJan. 31, 2025, by and among ONEOK, Inc.,ONEOK Partners, L P., ONEOKPartners Intermediate Limited Partnership, Magellan Midstream Partners, L P., EnLinkMidstream Partners, LP, ElkMerger SubI u I, L.L.C., and U.S. Bank Trus r tCompany, National Association, as trus r tee (incorporated by reference to Exhibit4 11 to ONEOK, Inc.’s Current ReportonForm 8-K, filedFeb.5,2025 (File No. 1-13643)).
4.86 Fourth Suppl u emental Indentur t e, dated asofJan. 31, 2025, by and among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnership, Magellan Midstream Partners, L P., EnLink Midstream Partners, LP, ElkMerger SubI u I, L.L.C., and U.S. Bank Trus r tCompany, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4 12 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb 5, 2025 (File No. 1-13643)).
4.87 SixthSupplemental Indentur t e, dated asofJan. 31, 2025, by and among ONEOK, Inc.,ONEOKPartners, L P ,ONEOKPartners Intermediate Limited Partnership,Magellan Midstream Partners, L P., EnLink Midstream Partners, LP, ElkMerger SubI u I, L.L.C. and U.S.Bank Trust Company, NationalAssociation, as trus r tee (incorporated by reference to Exhibit4 13 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb 5, 2025 (File No. 1-13643)).
4.88Thirty-Second Suppl u emental Indenture t , dated as of Jan. 31, 2025, by and among ONEOK, Inc.,ONEOK Partners, L P., ONEOKPartners Intermediate Limited Partnership, Magellan Midstream Partners, L P., EnLinkMidstream Partners, LP, ElkMerger SubI u I, L.L.C. and U.S.Bank Trust Company, National Association, as trus r tee (incorporated by reference to Exhibit4 14 to ONEOK, Inc.’s Current ReportonForm 8-K, filedFeb.5,2025 (File No. 1-13643)).
4.89 SeventeenthSupplemental Indentur t e, dated asofJan 31, 2025, by and among ONEOKPartners, L P., ONEOKPartners Intermediate Limited Partnership, ONEOK, Inc., Magellan Midstream Partners, L.P., EnLinkMidstream Partners, LP, ElkMerger SubI u I, L L C., and Computershare Trust Company,N A., as trus r tee (incorporated by reference to Exhibit4 15 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb 5, 2025 (File No 1-13643)).
4.90 Descriptionofsecurities(incorporated by referencefro f m Exhibit4 43 to ONEOK, Inc.'s Annual Reporton Form 10-Kfor f thefis f calyear endedDec. 31, 2020, filedFeb.23, 2021 (File No. 1-13643)).
10 ONEOK, Inc. Long-Term Incentive Plan(incorporated by referencefro f m Exhibit 10(a) to ONEOK, Inc.’s Annual ReportonForm 10-Kfor f thefis f calyear endedDec 31, 2001, filed March14, 2002 (File No 1-13643)).
10.1 ONEOK, Inc. StockCompensation Planfor f Non-EmployeeDirectors(incorporated by referencefrom f Exhibit99 toONEOK, Inc.’s RegistrationStatement on Form S-8file f d Jan.25, 2001 (File No 333-54274)).
10 2 ONEOK, Inc. Suppl u emental Executive Retirement Plan terminated andfro f zen Dec. 31, 2004 (incorpo r rated by referencefro f m Exhibit 10.1 to ONEOK, Inc.’s Current ReportonForm8-KfiledDec. 20, 2004 (File No. 1-13643)).
10 3 ONEOK, Inc. 2005 Suppl u emental Executive Retirement Plan, as amended and restated, dated as of Dec. 18, 2008 (incorpor r ated by referencefro f m Exhibit 10 3 to ONEOK, Inc.’s Annual ReportonForm 10-Kfor f the fiscalyear endedDec. 31, 2008, filedFeb.25, 2009 (File No. 1-13643)).
10.4 Form of Indemnific f ationAgreement betweenONEOK, Inc. and ONEOK, Inc. offi f cers and directors, as amended (incorporated by referencefro f m Exhibit 10.5 to ONEOK, Inc.’sAnnual ReportonForm 10-Kfor f thefis f calyear endedDec. 31, 2014, filedFeb.25, 2015 (File No. 1-13643)).
10.5 Amended and Restated ONEOK, Inc. AnnualOfficer Incentive Plan (incorpor r ated by referencefro f m Exhibit 10 1 to ONEOK, Inc.’s Current ReportonForm8-Kfiled May 27, 2009 (File No 1-13643)).
10.6 ONEOK, Inc. Employee Nonqualified Deferred Compensation Plan, as amended and restated Dec. 16, 2004 (incorpor r ated by referencefro f m Exhibit 10.3 to ONEOK, Inc.’s Current ReportonForm8-KfiledDec.20, 2004 (File No. 1-13643)).
10.7 ONEOK, Inc. 2005 Nonqualifie f dDefer f red Compensation Plan, as amended and restated, dated as of Dec. 18, 2008 (incorpor r ated by referencefro f m Exhibit 10.8 to ONEOK, Inc.’sAnnual ReportonForm 10-Kfor f thefis f calyear endedDec. 31, 2008, filedFeb.25, 2009 (File No. 1-13643)).
10 8 ONEOK, Inc. Deferred Compensation Planfor f Non-EmployeeDirectors, as amended and restated, dated as of Dec. 18, 2008 (incorpor r ated by referencefro f m Exhibit 10.9 to ONEOK, Inc.’s Annual ReportonForm 10-Kfor f thefis f calyear endedDec 31, 2008, filedFeb.25, 2009 (File No 1-13643)).
10.9 Amended and Restated Limited Liability Company AgreementofOverland Pass Pipeline Company LLC entered intobetween ONEOK Overland Pass Holdings, L.L.C. and Williams Field Services Company,LLC, dated asof May 31, 2006 (incorpo r ratedby refer f ence to Exhibit 10.6 to ONEOKPartners, L P.’sQuarterly ReportonForm 10-Qfor f the quarter ended June 30, 2006, filedAug. 4, 2006 (File No. 1-12202)).
10 10 Form of ONEOK, Inc. Offi f cerChange in ControlSeverance Plan (incorpor r ated by referencefro f m Exhibit 10 1 to ONEOK, Inc.’s Current ReportonForm8-Kfiled July 22, 2011 (File No 1-13643)).
10.11Form of 2023 Restricted Unit StockAward Agreement, dated asofFeb.22, 2023 (incorpor r ated by reference from Exhibit 10 15 to ONEOK, Inc.’s Annual ReportonForm 10-K,file f dFeb.28, 2023 (File No 1-13643)).
10.12 Form of 2023 Performance Unit Award Agreement, dated asofFeb.22, 2023 (incorpor r ated by reference from Exhibit 10 16 to ONEOK, Inc.’s Annual ReportonForm 10-K,file f dFeb.28, 2023 (File No 1-13643)).
10.13 Form of 2022 Restricted Unit Award Agreement(incorporated by referencefro f m Exhibit 10.17 to ONEOK, Inc.’s Annual ReportonForm 10-K, filed March1, 2022 (File No. 1-13643)).
10 14 Form of 2022 Performance Unit Award Agreement(incorporated by referencefro f m Exhibit 10 18 to ONEOK, Inc.’s Annual ReportonForm 10-K, filed March1, 2022 (File No. 1-13643)).
10 15 ONEOK, Inc. Equity Incentive Plan(incorporated by reference toAppendix A to ONEOK, Inc.’s definitive proxy statementonSchedul d e 14A filedonApril 5, 2018 (File No. 1-13643)).
10.16 ONEOK, Inc. Profit f Sharing Plan, dated asofJan. 1,2005 (incorpor r ated by referencefro f m Exhibit99 to ONEOK, Inc.’s RegistrationStatement on Form S-8fil f ed Dec. 30, 2004 (File No 333-121769)).
10 17 ONEOK, Inc. Equity Compensation Plan, as amended and restated, dated as of Dec. 18, 2008 (incorpo r rated by referencefro f m Exhibit 10.44 to ONEOK, Inc.’s Annual ReportonForm 10-Kfor f thefis f calyear ended Dec. 31, 2008, filedFeb.25, 2009 (File No 1-13643)).
10 18Equity DistributionAgreement, dated as of Aug. 3, 2023, among ONEOK, Inc., and BofA Securities, Inc., as sales agent, principals and/or forwardsellers, asfor f ward purchasers(incorporated by referencefrom f Exhibit 1 1 to ONEOK, Inc.’s Current ReportonForm8-K with afile f dAug 3, 2023 (File No 1-13643)).
10.19 Form of 2024 Restricted Unit Award Agreement, dated asofFeb.27, 2024 (incorpor r ated by referencefro f m Exhibit 10 24 to ONEOK, Inc.'s Annual ReportonForm 10-Kfor f thefis f calyear endedDec. 31, 2023, filed Feb. 27, 2024 (File No. 1-13643)).
10.20 Form of 2024 Performance Unit Award Agreement, dated asofFeb.27, 2024 (incorpor r ated by reference from Exhibit 10.25 to ONEOK, Inc.'s Annual ReportonForm 10-Kfor f thefis f calyear endedDec. 31, 2023, filedFeb.27, 2024 (File No. 1-13643)).
10.21Form of 2021Restricted Unit Award Agreement(incorporated by referencefro f m Exhibit 10.33 to ONEOK, Inc.'s Annual ReportonForm 10-Kfor f thefis f calyear endedDec. 31, 2020, filedFeb.23, 2021 (File No. 1-13643)).
10.22
Form of 2021Performance Unit Award Agreement(incorporated by referencefro f m Exhibit 10.34 to ONEOK, Inc'sAnnual ReportonForm 10-Kfor f thefis f calyear endedDec. 31, 2020, filedFeb.23, 2021 (File No. 1-13643)).
10.23 Form of 2025 Restricted Unit Award Agreement, dated asofFeb. 19, 2025.
10.24 Form of 2025 Performance Unit Award Agreement, dated asofFeb. 19, 2025.
10 25 ONEOK, Inc. Employee StockPurchase Plan as amended and restated effe f ctive May 24, 2023 (incorpo r rated by reference to Exhibit99.1 to ONEOK, Inc.’s RegistrationStatement on Form S-8, filed Nov. 9, 2023 (File No 1-13643)).
10 26 ONEOK, Inc. 2020 Nonqualifie f dDefer f red Compensation Plan, dated asofJuly 24, 2019, andeffective as of Jan. 1, 2020 (incorpor r ated by referencefro f m Exhibit 10.40 to ONEOK, Inc.’s Annual ReportonForm 10-K forthe fiscalyear endedDec. 31, 2020, filedFeb.23, 2021 (File No. 1-13643)).
10.27 Form of ONEOK, Inc. Equity Incentive Plan Restricted UnitAward Agreement(Make-WholeAward) betweenONEOK, Inc. and Pierce H. Norton II(incorporated by reference to Exhibit 10.1 to ONEOK, Inc.’s QuarterlyReportonForm 10-Qfor f the quarter ended June 30, 2021, filedAug 4, 2021 (File No 1-13643)).
10 28Form of ONEOK, Inc. Equity Incentive Plan Restricted UnitAward Agreement(Make-WholeAward) (incorpor r ated by reference to Exhibit 10.1 to ONEOK, Inc.’s QuarterlyReportonForm 10-Qfor f the quarter ended Sept. 30, 2022, filed Nov. 2, 2022 (File No. 1-13643)).
10 30 Restricted Unit Award Agreementbetween ONEOK, Inc. and JanetHogan(incorporated by reference to Exhibit 10 3 to ONEOK, Inc.’s QuarterlyReportonForm 10-Qfor f the quarter ended Sept. 30, 2022, filed Nov. 2, 2022 (File No. 1-13643)).
10.31Restricted Unit Award Agreementbetween ONEOK, Inc. andDarrenWallis (incorpor r ated by reference to Exhibit 10.4 to ONEOK, Inc.’s QuarterlyReportonForm 10-Qfor f the quarter ended Sept. 30, 2022, filed Nov. 2, 2022 (File No. 1-13643)).
10.32 Second Amended and Restated Credit Agreement, dated asofFeb. 14, 2025, by and amount ONEOK, Inc., as borrower, Citibank, N A., as administrative agent, a swing line lender, a letterofcredit issuer and a lender, andeachofthe other lenders,swing line lenders and letterofcredit issuers party thereto (incorpor r ated by referencefro f m Exhibit 10 1 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb.20, 2025 (File No. 1-13643)).
10.33 Second Amended and Restated Guaranty Agreement, dated asofFeb. 14, 2025, by and among ONEOK Partners, L P., ONEOKPartners Intermediate Limited Partnership, Magellan Midstream Partners, L P., EnLinkMidstream Partners, LP, and Elk MergerSub II, L.L.C., in favor of Citibank, N.A. (incorpor r ated by referencefro f m Exhibit 10.2 to ONEOK, Inc.’s Current ReportonForm8-K,file f dFeb.20, 2025 (File No. 1-13643)).
10.34 ONEOK, Inc. Long-Term Incentive Plain, as amended and restated, dated as of Jan. 26, 2021 (f/k/a the Magellan Midstream Partners, L P., Long-Term Incentive Plan) (incorpor r ated by reference to Magellan Midstream Partners, L.P.’s Exhibit 10(a) to Form 10-K filedApril29, 2021) (File No. 1-16335).
10 35 AmendmentNo. 1, dated asofApril1, 2021 to ONEOK, Inc. Long-Term Incentive Plan(f/k/a the Magellan Midstream Partners, L P Long-Term IncentivePlan) (incorpor r ated by reference to Exhibit 10.2 to Magellan Midstream Partners, L P ’s Form 10-Qfile f dApril29, 2021) (File No. 1-16335)
10.37
EnLinkMidstream, LLC2014 Long-Term Incentive Plan, as amended and restated, dated Dec. 16, 2021 (incorpor r ated by reference to EnLink Midstream, LLC’s Exhibit 10.3 to Form 10-K, filedFeb. 16, 2022 (File No. 001-36336)).
Suppor u tAgreement, dated asofNov. 24, 2024, by and among ONEOK, Inc. and EnLink Midstream, LLC (incorpor r ated by reference to Exhibit 10.1 to ONEOK, Inc.’s Current ReportonForm8-K,file f d Nov. 25, 2024 (File No. 1-13643)).
19 Securities and Insider Trading Policy
21Required infor f mation concerning theregistrant’ssubsidiaries
22.1List of subs u idiary guarantors and issuersofguaranteedsecurities.
23 Consentof Independent Registered Public AccountingFirm - PricewaterhouseCoopers LLP.
31.1 Certific f ationof Pierce H. Norton II pursuanttoSection302 of the Sarba r nes-Oxley Act of 2002.
31.2 Certific f ationofWalterS Hulse III pursuanttoSection302 of the Sarba r nes-Oxley Act of 2002
32 1 Certific f ationof Pierce H Norton II pursuantto 18 U.S.C.Section 1350 as adopted pursuanttoSection906 of the Sarba r nes-Oxley Act of 2002 (furnishedonlypursuanttoRul R e 13a-14(b)).
32.2
Certific f ationofWalterS. Hulse III pursuantto 18 U.S.C.Section 1350 as adopted pursuanttoSection906 of the Sarba r nes-Oxley Act of 2002 (furnishedonlypursuanttoRul R e 13a-14(b)).
97 Compensation Recoupment PolicyofONEOK, Inc.
101 INS Inline XBRL Instance Document -the instance documentdoesnotappear in the InteractiveDataFile because itsXBRL tags areembeddedwithinthe InlineXBRL document.
101.SCH Inline XBRLTaxonomyExtension Schema Document
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104.00 Cover Page Interactive Data File (for f matted in InlineXBRL andcontained in Exhibit 101) Attached as Exhibit 101 to this Annual Reportare thefol f lowing InlineXBRL-relateddocuments:(i) Document and Entity Information; (ii) Consolidated Statements of Income forthe yearsendedDec. 31, 2024, 2023 and2022 (iii) Consolidated Statements of Comprehensive Incomefor f the yearsendedDec. 31, 2024, 2023 and2022; (iv) Consolidated Balance Sheets at Dec. 31, 2024 and2023; (v)Consolidated Statements of CashFlowsfor f the years endedDec. 31, 2024, 2023 and2022; (vi) Consolidated Statements of Changes in Equity forthe yearsendedDec. 31, 2024, 2023 and2022 and (vii) Notes to Consolidated FinancialStatements.
ITEM 16. FORM10-KSUMMARY
None
Pursuant to therequirementsofSection 13 or 15(d) of the Exchange Act, theregistrant has dulycaused thisreporttobesigned on its behalfby theundersigned, thereuntodul d yauthorized
ONEOK, Inc.
Registrant
Date:February2 r 5, 2025
By:/s/ WalterS Hulse III
WalterS. Hulse III
ChiefFinancial Offi f cer, Treasurerand
Executive Vice President, Investor Relations and Corpor r ateDevelopment (PrincipalFinancialOfficer)
Pursuant to therequirementsofthe Exchange Act, this report has been signedbelow by thefol f lowing persons on behalf of the registrant and inthe capa a cities indicated on this 25thday of Februa r ry 2025.
/s/ Julie H Edwards/s/ Pierce H Norton II
Julie H Edwards Pierce H Norton II Board Chair President, Chief Executive Officer and Director
/s/ WalterS. Hulse III
/s/ MaryM r .Spears
WalterS Hulse IIIMary M Spears
ChiefFinancial Offi f cer, Treasurerand
Senior Vice Presidentand Chief
Executive Vice President, Investor AccountingOfficer,Finance and Tax Relations and Corpor r ateDevelopment
/s/Brian L. Derksen/s/ Pattye L. Moore
Brian L.Derksen
Pattye L Moore Director Director
/s/ LoriA.Gobillot
Lori A. Gobillot
/s/ EduardoA. Rodriguez
Edua d rdoA Rodriguez Director Director
/s/ MarkW Helderman
/s/ GeraldB.Smith
Mark W. HeldermanGeraldB.Smith Director Director
/s/ Randall J. Larson
Randall J. Larson
/s/ Wayne T Smith
Wayne T Smith Director Director
[THIS PAGE INTENTIONALLY LEFT BLANK]
ONEOK, INC. BOARD OF DIRECTORS
Positions and ages as of February 25, 2025
Brian L. Derksen, 73
Retired Global Deputy Chief Executive Officer, Deloitte Touche Tohmatsu Limited Dallas, Texas
Julie H. Edwards, 66
Board Chair, ONEOK, Inc.
Former Chief Financial Officer, Frontier Oil Corporation and Southern Union Company Houston, Texas
Lori A. Gobillot, 63 Business Consultant, Gobillot Advisors Houston, Texas
ONEOK,
INC. OFFICERS
Positions and ages as of February 25, 2025
Pierce H. Norton II, 65
President and Chief Executive Officer
Walter S. Hulse III, 61
Executive Vice President, Chief Financial Officer, Treasurer, Investor Relations and Corporate Development
Kevin L. Burdick, 60
Executive Vice President and Chief Enterprise Services Officer
Mark W. Helderman, 66
Retired Managing Director and Co-Portfolio Manager, Sasco Capital Inc. Westlake, Ohio
Randall J. Larson, 67
Retired Chief Executive Officer, TransMontaigne Partners L.P. Tucson, Arizona
Pattye L. Moore, 67
Former Board Chair, Red Robin Gourmet Burgers; Former Board Chair and President, Sonic Corp. Broken Arrow, Oklahoma
Pierce H. Norton II, 65
President and Chief Executive Officer, ONEOK,Inc. Tulsa, Oklahoma
Lyndon C. Taylor, 66
Executive Vice President, Chief Legal Officer and Assistant Secretary
Sheridan C. Swords, 55
Executive Vice President and Chief Commercial Officer
Randy N. Lentz, 60
Executive Vice President and Chief Operating Officer
CORPORATE INFORMATION
At ONEOK (NYSE: OKE), we deliver energy products and services vital to an advancing world. We are a leading midstream operator that provides gathering, processing, fractionation, transportation and storage services. Through our approximately 60,000-mile pipeline network, we transport the natural gas, natural gas liquids (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. As one of the largest diversified energy infrastructure companies in North America, ONEOK is delivering energy that makes a difference in the lives of people in the U.S. and around the world.
ONEOK is an S&P 500 company headquartered in Tulsa, Oklahoma.
For information about ONEOK, visit the website: www.oneok.com.
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ANNUAL MEETING
The 2025 annual meeting of shareholders will be held Wednesday, May 21, 2025, at 9 a.m. Central Daylight Time as a virtual meeting only. In order to virtually attend the annual meeting, shareholders must register online at www.proxydocs.com/oke.
AUDITORS
PricewaterhouseCoopers LLP Two Warren Place 6120 South Yale Avenue, Suite 1850 Tulsa, OK 74136
DIRECT STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
ONEOK's Direct Stock Purchase and Dividend Reinvestment Plan provides investors the opportunity to purchase shares of common stock without payment of any brokerage fees or service charges and to reinvest dividends automatically.
TRANSFER AGENT, REGISTRAR AND DIVIDEND DISBURSING AGENT
EQ Shareowner Services P.O. Box 64854
St. Paul, MN 55164-0854
866-235-0232
www.shareowneronline.com
CREDIT RATINGS – OKE
Moody’s Investors Service
S&P Global Ratings Fitch Ratings, Inc.
INVESTOR RELATIONS
Eduardo A. Rodriguez, 69
President, Strategic Communications Consulting Group El Paso, Texas
Gerald B. Smith, 74
Founder, Chairman and former Chief Executive Officer, Smith Graham & Company Investment Advisors Houston, Texas
Wayne T. Smith, 65
Retired Chairman and Chief Executive Officer, BASF Corporation, North America Rochester, NY
(stable)
(stable)
(stable)
ONEOKInvestorRelations@oneok.com 877-208-7318
Charles M. Kelley, 66
Senior Vice President, Commercial Natural Gas Pipelines
Mary M. Spears, 45
Senior Vice President and Chief Accounting Officer, Finance and Tax
Patrick W. Cipolla, 59 Vice President, Deputy General CounselCompliance & Ethics and Corporate Secretary
CORPORATE WEBSITE www.oneok.com
FORWARD-LOOKING STATEMENTS
The statements in this annual report that are not historical information, including statements concerning plans and objectives of management for future operations, economic performance or related assumptions, are forward-looking statements. Forward-looking statements may include words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “might,” “outlook,” “plan,” “potential,” “project,” “scheduled,” “should,” “target,” “will,” “would” and other words and terms of similar meaning.
Although we believe that our expectations regarding future events are based on reasonable assumptions, we can give no assurance that such expectations or assumptions will be achieved. Important factors that could cause actual results to differ materially from those in the forward-looking statements are described under Part I, Item 1A, Risk Factors in the ONEOK, Inc. Annual Report on Form 10-K for the year ended Dec. 31, 2024, included in this annual report.
