What changed in this filing

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Item 1. Business

2022-03-01 compared with 2021-02-23 · 190 added, 169 removed, 286 unchanged (56% of the section changed)

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

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

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

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Raw natural gas is typically gathered at the wellhead, compressed and transported through pipelines to our processing facilities.

Most raw natural gas produced at the wellhead contains a mixture of NGL components, including ethane, propane, iso-butane, normal butane and natural gasoline.

Most raw natural gas produced at the wellhead also contains a mixture of NGL components, including ethane, propane, iso-butane, normal butane and natural gasoline.

Gathered wellhead natural gas is directed to our processing plants to remove NGLs, resulting in residue natural gas (primarily methane).

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Purity products are stored or distributed to our customers, such as petrochemical companies, propane distributors, heating fuel users, ethanol producers, refineries and exporters.

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EXECUTIVE SUMMARY

Business Update, Market Conditions and COVID-19 - Late in the first quarter 2020, the energy industry experienced historic events that led to a simultaneous demand and supply disruption.

The World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide, which contributed to a massive economic slowdown and decreased demand for crude oil.

In addition, Saudi Arabia and Russia increased production of crude oil as the two countries competed for market share.

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

Crude oil prices and the related impact on crude oil drilling impacts our business due to associated natural gas, which is natural gas produced by oil wells.

Associated natural gas contains NGLs.

The decline of crude oil prices resulted in crude oil and associated natural gas and NGL production being curtailed in the second quarter 2020.

We are still experiencing global and regional economic disruptions due primarily to COVID-19;

however, in the third quarter 2020, many of our producers reversed curtailments, bringing volumes back to pre-COVID-19 levels as prices and demand significantly improved from second quarter 2020 lows.

The full impact of the continued global and regional economic disruption will depend on the unknown duration and severity of COVID-19 and, among other things, the impact of governmental actions imposed in response to COVID-19, the pace and scale of economic recovery and corresponding demand for crude oil and the impacts to commodity prices.

We continue to monitor producers’ drilling, completion and production plans, which are increasingly positive as commodity prices have stabilized and improved, and our expectations for 2021 include the potential for an improving pace of drilling and completion activity.

The energy industry has experienced many up and down cycles, and as a result, we have positioned ourselves to minimize exposure to direct commodity price volatility.

Each of our three segments’ earnings are primarily fee-based, and our consolidated earnings were more than 90% fee-based in 2020.

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

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

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

Each of our three segments are primarily fee-based, and our consolidated earnings were approximately 90% fee-based in 2021.

While our Natural Gas Gathering and Processing segment’s earnings are primarily fee-based, we have direct commodity price exposure related primarily to fee with POP contracts.

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

In addition, although our Natural Gas Gathering and Processing and Natural Gas Liquids segments generate primarily fee-based earnings, those segments’ results of operations are exposed to volumetric risk as a result of production curtailments, reduced drilling and completion activity, declining well productivity, severe weather disruption, operational outages and crude oil, NGL and natural gas demand.

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

In addition, our Natural Gas Gathering and Processing and Natural Gas Liquids segments are exposed to volumetric risk as a result of drilling and completion activity, normal volumetric well decline, severe weather disruption, operational outages and crude oil, NGL and natural gas demand.

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

In continued response to COVID-19, we remain committed to managing the impact of the pandemic on our employees.

We continue to take actions for safe operations, to protect our workforce and to implement appropriate cost reduction measures.

We reduced our 2020 capital-growth expenditures by approximately $1.7 billion, compared with 2019, driven primarily by our previously completed, paused and suspended capital-growth projects.

We also significantly reduced our operating expenses in 2020, compared with 2019, primarily as a result of reduced outside services from contractors, asset optimizations and lower employee-related costs.

As always, we remain focused on operating our assets safely, reliably and in an environmentally responsible manner.

We continue to monitor the COVID-19 outbreak and have implemented our business continuity plans.

ONEOK is a critical infrastructure business as defined by the United States Department of Homeland Security, and, therefore, our workforce has remained fully engaged in the midst of federal, state and local government issued guidelines and safety-related ordinances.

We continue to practice remote work procedures when possible to protect the safety of our employees and their families and have taken extra precautions for our employees who work in the field or need to report to a ONEOK facility, such as increased facility access restrictions, workspace modifications, social distancing, face covering protocols and sanitation procedures.

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

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

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

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

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

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

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

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

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

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

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

We began implementing our return to office plan in early 2022, and we will continue to take safety precautions for our employees who work in the field or report to a ONEOK facility.

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

In the first quarter 2020, the CARES Act was signed into law in response to the COVID-19 pandemic, and we opted into the CARES Act payroll tax deferral program, which will modestly benefit us, and the 401(k) penalty-free hardship withdrawal and loan deferral programs for our employees.

In 2020, due to the commodity price and market environment, we experienced a significant decline in our share price and market capitalization, and performed a Step 1 analysis to test our goodwill for impairment and evaluated certain long-lived asset groups and equity investments for impairment.

As a result, we incurred $644.9 million in noncash impairment charges, which had an adverse impact on our financial results for the year ended December 31, 2020.

We expect to maintain sufficient liquidity and financial stability into 2021 due to cash on hand from our June 2020 equity issuance, cash flows from operations and access to our undrawn $2.5 Billion Credit Agreement.

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

Natural Gas - In our Natural Gas Gathering and Processing segment, gathered and processed volumes decreased in 2020, compared with 2019, due primarily to natural production declines in the Mid-Continent region.

Production curtailments from many of our crude oil and natural gas producers impacted volumes in the second quarter 2020, however in the third quarter 2020, many of our producers returned production and our captured natural gas returned to pre-COVID-19 levels as commodity prices strengthened.

We expect to maintain pre-COVID-19 volume levels in the Rocky Mountain region through 2021, assuming no increase in producer activity, due to the completion of previously drilled but uncompleted wells, the capture of natural gas previously flared and rising gas-to-oil ratios.

In addition, as prices and volumes continue to strengthen, we have the processing capacity to benefit from production growth without significant capital investment due to the completion of our Demicks Lake I and II natural gas processing plants, which were placed in service in the fourth quarter 2019 and the first quarter 2020, respectively.

These plants increased our total processing capacity to approximately 1.5 Bcf/d in the Williston Basin.

Production growth may be impacted by the current litigation challenging the validity of an easement for the Dakota Access Pipeline (DAPL), which is used to transport crude oil from the Williston Basin to markets in the Mid-Continent region and Gulf Coast.

If DAPL operations are suspended, production growth could be limited due to increased crude oil transportation costs and pipeline capacity constraints in the region, which could impact us due to the associated natural gas and NGLs.

However, we expect limited impact to our producers due to alternative available crude pipeline capacity and existing rail infrastructure out of the Rocky Mountain region.

In our Natural Gas Pipelines segment, our assets are connected to key supply areas and demand centers, including export markets in Mexico via our Roadrunner joint venture and supply areas in Canada and the United States via our interstate and intrastate natural gas pipelines and our Northern Border Pipeline joint venture, which enables us to provide essential natural gas transportation and storage services to end users.

Continued demand from local distribution companies, electric-generation facilities and large industrial companies resulted in low-cost expansions in 2019 and 2020 that position us well to provide additional expansions for our customers in 2021.

Our natural gas transportation capacity contracted was not significantly impacted by market conditions and COVID-19 in 2020, as our end users rely on natural gas to support their business regardless of commodity price fluctuations.

We continued to experience stable fee-based earnings throughout 2020 with transportation capacity more than 95% contracted with firm commitments, and we expect these stable fee-based earnings to continue into 2021 at similarly contracted levels.

NGLs - In our Natural Gas Liquids segment, NGL volumes increased for the year ended December 31, 2020, compared with the same period in 2019, due primarily to increased volumes in the Rocky Mountain region, where we are the largest NGL takeaway provider.

While we saw significant declines in volumes in the second quarter 2020, due to reduced demand as a result of COVID-19, by the third quarter 2020 average volumes exceeded pre-COVID-19 levels.

NGL volumes were also favorably impacted by ethane production driven by improved ethane recovery economics due to increased demand from petrochemical manufacturers.

We expect the improved NGL volumes to continue into 2021, and to benefit without significant capital investment, from our integrated assets, which were strengthened through our recently completed capital-growth projects.

Our Elk Creek pipeline was completed in two phases during the second half of 2019.

In 2020, we completed an extension of our Bakken NGL pipeline, the construction and extension of our Arbuckle II pipeline and the construction of our 125 MBbl/d MB-4 fractionator.

Sustainability and Social Responsibility - In 2021 and 2022, we qualified for inclusion in the S&P Global Sustainability Yearbook .

In addition, we received a perfect score of 100 in the Human Rights Campaign 2021 Corporate Equality Index, were upgraded from A to AA at MSCI Inc.

ESG ratings, were named a Top 100 U.S.

Companies Supporting Healthy Communities and Families, were listed as one of America’s Most Responsible Companies for 2022 by Newsweek and were ranked in the top 10% in the Refiners and Pipelines industry group in Sustainalytics ESG Risk Ranking.

We continue to look for ways to reduce our environmental impact and utilize more efficient technologies.

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

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

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

In September 2021, we announced a 30% absolute GHG emissions reduction target, or 2.2 million metric tons, of our combined Scope 1 and Scope 2 emissions by 2030, compared with 2019 base-year levels.

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

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

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

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

Natural Gas - In our Natural Gas Gathering and Processing segment, gathered and processed volumes in the Rocky Mountain region increased in 2021, compared with 2020, due primarily to increased producer activity, rising gas-to-oil ratios and the impact of curtailed production in 2020.

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

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

Upon completion of Demicks Lake III, which is expected in the first quarter 2023, our total processing capacity will be approximately 1.9 Bcf/d in the Williston Basin.

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

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

Continued demand from local distribution companies, electric-generation facilities and large industrial companies resulted in low-cost expansions that position us well to provide additional services to our customers when needed.

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

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

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

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

NGLs - In our Natural Gas Liquids segment, NGL volumes increased in 2021, compared with 2020, due primarily to increased production in the Rocky Mountain region, Mid-Continent region and Permian Basin, increased ethane production in the Rocky Mountain region and the impact of curtailed production across our system in 2020, offset partially by the impact of Winter Storm Uri in 2021 and lower volumes in the Barnett Shale.

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

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

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

BUSINESS STRATEGY

Our primary business strategy is to maintain prudent financial strength and flexibility while growing our fee-based earnings and sustaining our dividends per share with a focus on safe, reliable, environmentally responsible, legally compliant and reliable operations for our customers, employees, contractors and the public through the following:

• Operate in a safe, reliable and environmentally responsible manner - environmental, safety and health continues to be a primary focus for us, and our emphasis on personal and process safety has produced improving trends in the key indicators we track.

We also continue to seek ways to reduce our environmental impact by conserving resources and utilizing more efficient technologies.

We are preparing for the future energy transition and our role in meeting the world’s energy needs in an environmentally responsible way.

In 2020, we were included in the Dow Jones Sustainability North America Index for the second consecutive year and added to the Dow Jones Sustainability World Index, which recognize companies for industry-leading environmental, social and governance performance;

• Pursue organic investments in our existing operating regions to support earnings growth - we expect earnings growth and dividend stability provided by significant earnings power and available operating capacity from our recently

completed capital-growth projects.

As producer activity warrants additional infrastructure, we have the option for low-cost expansions of existing infrastructure to accommodate increasing volumes;

• Manage our balance sheet and maintain investment-grade credit ratings - we seek to maintain investment-grade credit ratings, pay down debt and internally fund capital-growth projects, when producer activity levels warrant additional infrastructure.

At December 31, 2020, we had no borrowings outstanding under our $2.5 Billion Credit Agreement and $524.5 million of cash and cash equivalents;

• Attract, select, develop, motivate, challenge and retain a diverse group of employees to support strategy execution - we continue to execute on our recruiting strategy that targets professional and field personnel in our operating areas.

We also continue to focus on employee development efforts with our current employees and monitor our benefits and compensation package to remain competitive.

Our mission is to deliver energy products and services vital to an advancing world.

Our vision is to create exceptional value for our stakeholders by providing solutions for a transforming energy future.

Our business strategy is focused on:

• Zero incidents - we commit to a zero-incident culture for the well-being of our employees, contractors and communities.

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

• Highly engaged workforce - we strive to be an employer of choice and continue to focus on attracting, selecting and retaining talent, advancing an inclusive, diverse and engaged culture and developing individuals and leaders.

• Sustainable business model - we aim to maintain prudent financial strength and flexibility while operating a safe, reliable and resilient asset base.

We seek to maintain investment-grade credit ratings and a strong balance sheet.

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

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

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

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

NARRATIVE DESCRIPTION OF BUSINESS

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Rocky Mountain region - The Williston Basin is located in portions of North Dakota and Montana and includes the oil-producing, NGL-rich Bakken Shale and Three Forks formations.

Our completed capital-growth projects in the Williston Basin increased our gathering and processing capacity and enable us to capture increased natural gas production from new wells and previously flared natural gas production.

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

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

Mid-Continent region - The Mid-Continent region includes the oil-producing, NGL-rich STACK and SCOOP areas and the Cana-Woodford Shale, Woodford Shale, Springer Shale, Meramec, Granite Wash and Mississippian Lime formations of Oklahoma and Kansas, and the Hugoton and Central Kansas Uplift Basins of Kansas.

Property - Our Natural Gas Gathering and Processing segment includes the following assets:

• 17,500 miles of natural gas gathering pipelines;

• ten natural gas processing plants with 1.0 Bcf/d of processing capacity in the Mid-Continent region, and 12 natural gas processing plants with 1.5 Bcf/d of processing capacity in the Rocky Mountain region;

• 14 MBbl/d of NGL fractionation capacity at various natural gas processing plants.

In addition, we have access to up to 200 MMcf/d of processing capacity in the Mid-Continent region through a long-term processing services agreement with an unaffiliated third party.

Our paused and suspended growth projects are excluded from the assets listed above.

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

• 14 MBbl/d of NGL fractionation capacity and 26 MBbl/d of de-ethanizer capacity at various natural gas processing plants.

We are in the process of constructing our 200 MMcf/d Demicks Lake III natural gas processing plant in the Williston Basin, which is not included in the assets listed above.

See “Recent Developments” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this Annual Report for more information on our growth projects.

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

This type of contract represented 65% and 63% of supply volumes in this segment for 2020 and 2019, respectively.

• Fee with POP contracts with producer take-in-kind rights - We purchase a portion of the raw natural gas stream, charge fees for providing the midstream services listed above, return primarily the residue natural gas to the producer, sell the remaining commodities and remit a portion of the commodity sales proceeds to the producer less our contractual fees.

This type of contract represented 29% and 33% of supply volumes in this segment for 2020 and 2019, respectively.

• Fee-only - Under this type of contract, we charge a fee for the midstream services we provide, based on volumes gathered, processed, treated and/or compressed.

Our fee-only contracts represented 6% and 4% of supply volumes in this segment in 2020 and 2019, respectively.

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For commodity sales, we contract to deliver residue natural gas, condensate and/or unfractionated NGLs to downstream customers at a specified delivery point.

Our sales of NGLs are primarily to our affiliate in the Natural Gas Liquids segment.

Utilization - The utilization rates for our natural gas processing plants were 66% and 84% for 2020 and 2019, respectively.

Our utilization rates decreased in 2020 due primarily to reduced demand as a result of COVID-19.

We calculate utilization rates using a weighted-average approach, adjusting for the dates that assets were placed in service.

Utilization - The utilization rates for our natural gas processing plants were 69% and 66% for 2021 and 2020, respectively, which includes 81% and 70% in the Rocky Mountain region for 2021 and 2020, respectively.

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

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

We calculate utilization rates using a weighted-average approach, adjusting for the dates that assets were placed in or removed from service.

Unconsolidated Affiliates - Our unconsolidated affiliates in this segment are not material.

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The Natural Gas Act also exempts natural gas gathering facilities from the jurisdiction of the FERC.

We believe our natural gas gathering facilities and operations meet the criteria used by the FERC for nonjurisdictional natural gas gathering facility status.

We believe our natural gas gathering facilities upstream of our natural gas processing plants meet the criteria used by the FERC for nonjurisdictional natural gas gathering facility status.

Interstate transmission facilities remain subject to FERC jurisdiction.

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A portion of our ONEOK North System transports refined petroleum products, including unleaded gasoline and diesel, from Kansas to Iowa.

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Property - Our Natural Gas Liquids segment includes the following assets:

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In addition, we lease 10 MMBbl of annual pipeline capacity near our ONEOK North System and have access to 5 MMBbl of combined NGL storage capacity at facilities in Kansas and Texas and 60 MBbl/d of NGL fractionation capacity in the Gulf Coast through service agreements.

Our paused and suspended growth projects are excluded from the assets listed above.

We are in the process of constructing our 125 MBbl/d MB-5 NGL fractionator in Mont Belvieu, Texas, which is not included in the assets listed above.

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Sources of Earnings - Earnings for our Natural Gas Liquids segment are derived primarily from commodity sales and purchases and fee-based services.

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• Exchange services - We utilize our assets to gather, transport, treat and fractionate unfractionated NGLs, thereby converting them into marketable NGL products delivered to a market center or customer-designated location.

Many of these exchange volumes are under contracts with minimum volume commitments that provide a minimum level of revenues regardless of volumetric throughput.

Our exchange services activities are primarily fee-based and include

some rate-regulated tariffs;

Some of these exchange volumes are under contracts with minimum volume commitments that provide a minimum level of revenues regardless of volumetric throughput.

Our exchange services activities are primarily fee-based and include some rate-regulated tariffs;

however, we also capture certain product price differentials through the fractionation process.

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Our storage activities consist primarily of fee-based NGL storage services at our Mid-Continent and Gulf Coast storage facilities.

• Optimization and marketing - We utilize our assets, contract portfolio and market knowledge to capture location, product and seasonal price differentials through the purchase and sale of NGLs and NGL products.

We primarily transport NGL products between Conway, Kansas, and Mont Belvieu, Texas, to capture the location price differentials between the two market centers.

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Our isomerization activities capture the price differential when normal butane is converted into the more valuable iso-butane at our isomerization unit in Conway, Kansas.

In many of our exchange services contracts, we purchase the unfractionated NGLs at the tailgate of the processing plant and deduct contractual fees related to the transportation and fractionation services we must perform before we can sell them as NGL products.

In the majority of our exchange services contracts, we purchase the unfractionated NGLs at the tailgate of the processing plant and deduct contractual fees related to the transportation and fractionation services we must perform before we can sell them as NGL products.

To the extent we hold unfractionated NGLs in inventory, the related contractual fees will not be recognized until the unfractionated inventory is fractionated and sold.

Utilization - The utilization rates for our various assets, including leased assets, decreased in 2020, due primarily to reduced demand as a result of COVID-19, which was partially offset by ethane economics, including the impact of ethane rejection in 2019 and ethane recovery in 2020.

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

The utilization rates for 2021 and 2020, respectively, were as follows:

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We have 50% ownership interests in Northern Border Pipeline and Roadrunner, which provide transportation services to various end users.

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

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• Midwestern Gas Transmission, which is a bidirectional system that interconnects with Tennessee Gas Transmission Company’s pipeline near Portland, Tennessee, and with several interstate pipelines that have access to both the Utica Shale and the Marcellus Shale at the Chicago Hub near Joliet, Illinois;

• Viking Gas Transmission, which is a bidirectional system that interconnects with a TransCanada Corporation pipeline at the United States border near Emerson, Canada, and ANR Pipeline Company near Marshfield, Wisconsin;

• Guardian Pipeline, which interconnects with several pipelines at the Chicago Hub near Joliet, Illinois, and with local natural gas distribution companies in Wisconsin;

• Viking Gas Transmission, which is a bidirectional system that interconnects with a TC Energy Corporation pipeline at the United States border near Emerson, Canada, and ANR Pipeline Company near Marshfield, Wisconsin;

• Guardian Pipeline, which interconnects with several pipelines at the Chicago Hub near Joliet, Illinois, and with local natural gas distribution and electric generation companies in Wisconsin;

• OkTex Pipeline, which has interconnections with several pipelines in Oklahoma, Texas and New Mexico.

Intrastate Pipelines - Our intrastate natural gas pipeline assets in Oklahoma transport natural gas throughout the state and have access to the major natural gas production areas in the Mid-Continent region, which include the STACK and SCOOP areas and the Cana-Woodford Shale, Woodford Shale, Springer Shale, Meramec, Granite Wash and Mississippian Lime formations.

Intrastate Pipelines and Storage - Our intrastate natural gas pipeline assets in Oklahoma transport natural gas throughout the state and have access to the major natural gas production areas in the Mid-Continent region, which include the STACK and SCOOP areas and the Cana-Woodford Shale, Woodford Shale, Springer Shale, Meramec, Granite Wash and Mississippian Lime formations.

In Texas, our intrastate natural gas pipelines are connected to the major natural gas producing formations in the Texas Panhandle, including the Granite Wash formation and Delaware and Midland Basins in the Permian Basin.

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Our intrastate natural gas pipeline assets also have access to the Hugoton and Central Kansas Uplift Basins in Kansas.

Our intrastate pipelines are also connected to our storage assets in Oklahoma and Texas.

Property - Our Natural Gas Pipelines segment includes the following assets:

• 1,500 miles of FERC-regulated interstate natural gas pipelines with 3.5 Bcf/d of peak transportation capacity;

• 5,100 miles of state-regulated intrastate transmission pipelines with peak transportation capacity of 4.3 Bcf/d;

• 1,500 miles of FERC-regulated interstate natural gas pipelines with 3.5 Bcf/d of transportation capacity;

• 5,100 miles of state-regulated intrastate transmission pipelines with transportation capacity of 4.3 Bcf/d;

• six underground natural gas storage facilities with 52.2 Bcf of total active working natural gas storage capacity.

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Our storage includes two underground natural gas storage facilities in Oklahoma, two underground natural gas storage facilities in Kansas and two underground natural gas storage facilities in Texas.

We are in the process of expanding the capacity of our Texas natural gas storage facilities by 1.1 Bcf, which is not included in the assets listed above.

Sources of Earnings - Earnings in this segment are derived primarily from transportation and storage services.

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In Texas and Kansas, natural gas storage may be regulated by the state and by the FERC for certain types of services.

In Oklahoma, natural gas storage operations are not subject to rate regulation by the state, and we have market-based rate authority from the FERC for certain types of services.

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Oklahoma, natural gas storage operations are not subject to rate regulation by the state, and we have market-based rate authority from the FERC for certain types of services.

See further discussion in the “Regulatory, Environmental and Safety Matters” section.

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Supply and Demand - Supply for each of our segments depends on crude oil and natural gas drilling and production activities, which are driven by the strength of the economy;

the decline rate of existing production;

producer access to capital;

producer firm commitments to transportation pipelines;

natural gas, crude oil and NGL prices;

or the demand for each of these products from end users.

the demand for each of these products from end users;

the decline rate of existing production;

producer access to capital and investment in the industry;

or producer firm commitments to transportation pipelines.

Demand for gathering and processing services is dependent on natural gas production by producers in the regions in which we operate.

State requirements in North Dakota for producers to reduce natural gas flaring have increased the need for our services to capture, gather and process natural gas.

Demand for NGLs and the ability of natural gas processors to successfully and

economically sustain their operations affect the volume of unfractionated NGLs produced by natural gas processing plants, thereby affecting the demand for NGL gathering, transportation and fractionation services.

Producers’ targets to limit natural gas flaring have increased the need for our services to capture, gather and process natural gas.

Demand for NGLs and the ability of natural gas processors to successfully and economically sustain their operations affect the volume of unfractionated NGLs produced by natural gas processing plants, thereby affecting the demand for NGL gathering, transportation and fractionation services.

Natural gas and NGL products are affected by economic conditions and the demand associated with the various industries that utilize the commodities, such as butanes and natural gasoline used by the refining industry as blending stocks for motor fuel, denaturant for ethanol and diluents for crude oil.

Ethane, propane, normal butane and natural gasoline are also used by the petrochemical industry to produce chemical components, used for a range of products that improve our daily lives and promote economic growth, including health care products, recyclable food packaging, clothing, technology, building materials, industrial, manufacturing and energy infrastructure, lightweight vehicle components and batteries.

Ethane, propane, butanes and natural gasoline are also used by the petrochemical industry to produce chemical components, used for a range of products that improve our daily lives and promote economic growth, including health care products, recyclable food packaging, clothing, technology, building materials, industrial, manufacturing and energy infrastructure, lightweight vehicle components and batteries.

Propane is also used to heat homes and businesses.

See additional discussion regarding the impacts of COVID-19 on supply and demand under “Business Update, Market Conditions and COVID-19” in our Executive Summary at the beginning of this Item 1.

Commodity Prices - In March 2020, the increase in crude oil supply combined with a decrease in crude oil demand stemming from the global response and uncertainties related to COVID-19 resulted in a sharp decline in crude oil prices.

However, in the third quarter 2020, prices significantly improved from second quarter lows.

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

Commodity Prices - Our earnings are primarily fee-based in all three of our segments, however in our Natural Gas Gathering and Processing segment, we are exposed to commodity price risk as a result of retaining a portion of the commodity sales proceeds associated with our fee with POP contracts.

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

In our Natural Gas Liquids segment, we are exposed to commodity price risk associated with changes in the price of NGLs;

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See additional discussion regarding our commodity price risk and related hedging activities under “Commodity Price Risk” in Part II, Item 7A, Quantitative and Qualitative Disclosures about Market Risk, in this Annual Report.

Seasonality - Cold temperatures usually increase demand for natural gas and certain NGL products, such as propane, the main heating fuels for homes and businesses.

Seasonality - Cold temperatures usually increase demand for natural gas and certain NGL products, such as propane, which are heating fuels for homes and businesses.

Warm temperatures usually increase demand for natural gas used in gas-fired electric generation for residential and commercial cooling, as well as agriculture-related equipment like irrigation pumps and crop dryers.

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In our Natural Gas Pipelines segment, natural gas storage is necessary to balance the relatively steady natural gas supply with the seasonal demand of residential, commercial and electric-generation users.

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Competition - We compete for natural gas and NGL supply with other midstream companies, major integrated oil companies and independent exploration and production companies that have gathering and processing assets, fractionators, intrastate and interstate pipelines and storage facilities.

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• cost of and access to capital.

We have responded by making capital investments to access and connect new supplies with end-user demand;

We have remained competitive by making capital investments to access and connect new supplies with end-user demand;

increasing gathering, processing, fractionation and pipeline capacity;

increasing storage, withdrawal and injection capabilities;

and reducing operating costs so that we compete effectively.

and improving operating efficiency so that we compete effectively.

Our and our competitors’ infrastructure projects may affect commodity prices and could displace supply volumes from the Mid-Continent and Rocky Mountain regions and the Permian Basin where our assets are located.

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Customers - Our Natural Gas Gathering and Processing and Natural Gas Liquids segments derive services revenue from major and independent crude oil and natural gas producers.

Our Natural Gas Liquids segment’s customers also include NGL and natural gas gathering and processing companies.

Our Natural Gas Liquids segment’s customers also include other NGL and natural gas gathering and processing companies.

Our downstream commodity sales customers are primarily petrochemical, refining and marketing companies, utilities, large industrial companies, natural gasoline distributors, propane distributors and municipalities.

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Failure to comply with these laws, regulations, licenses and permits may expose us to fines, penalties, reputational harm and/or interruptions in our operations that could be material to our results of operations or financial condition.

For example, if a leak or spill of hazardous substances or petroleum products occurs from pipelines or facilities that we own, operate or otherwise use, we could be held jointly and severally liable for all resulting liabilities, including response, investigation and cleanup costs, which could affect adversely our results of operations and cash flows.

In addition, emissions controls and/or other regulatory or permitting mandates under the Clean Air Act and other similar federal and state laws could require unexpected capital expenditures at our facilities.

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We also cannot assure that existing permits will not be revised or cancelled, potentially impacting facility construction activities or ongoing operations.

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International, federal, regional and/or state legislative and/or regulatory initiatives may attempt to control or limit GHG emissions, including initiatives directed at issues associated with climate change.

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In addition, there have been international efforts seeking legally binding reductions in emissions of GHGs.

Our GHG emissions originate primarily from combustion engine exhaust, heater exhaust and fugitive methane gas emissions.

Our environmental actions focus on minimizing the impact of our operations on the environment.

These actions include:

(i) developing and maintaining an accurate GHG emissions inventory according to current rules issued by the EPA;

(ii) improving the efficiency of our various pipelines, natural gas processing facilities and NGL fractionation facilities;

(iii) following developing technologies for emissions control and the capture of carbon dioxide to keep it from reaching the atmosphere;

and (iv) utilizing practices to reduce the loss of methane from our facilities.

In addition, many of our compressor station facilities are designed and operated with electric-driven compression units, which reduce the potential emission from these facilities, including Scope 1 GHG emissions, which are emissions directly sourced from our facilities.

We participate in the EPA’s Natural Gas STAR Program and the Our Nation’s Energy (ONE) Future Coalition to reduce voluntarily methane emissions.

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

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

PHMSA has submitted to the Federal Register an advisory bulletin underscoring to pipeline and pipeline facility operators requirements to minimize methane emissions in the Protecting our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2020.

The PIPES Act directs pipeline operators to update their inspection and maintenance plans to address the elimination of hazardous leaks, and to minimize natural gas releases from pipeline facilities.

The updated plans must also address the replacement or remediation at facilities that historically have been known to experience leaks.

In September 2021, we announced a 30% absolute GHG emissions reduction target, or 2.2 million metric tons, of our combined Scope 1 and Scope 2 emissions by 2030, compared with 2019 base-year levels.

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

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

We participate in the EPA’s Natural Gas STAR Program and the Our Nation’s Energy (ONE) Future Coalition to voluntarily report methane emission reductions and to calculate our methane intensity.

We continue to focus on maintaining low methane gas release rates through expanded implementation of best practices to limit the release of natural gas during pipeline and facility maintenance and operations.

We believe it is likely that future governmental legislation and/or regulation may require us either to limit GHG emissions from our operations, to purchase allowances for such emissions or to be subject to a carbon emissions tax.

However, we cannot predict precisely what form these future regulations will take, the stringency of the regulations, when they will become effective or the impact on our results of operations.

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

We believe it is likely that future governmental legislation and/or regulation on the federal, state or regional level may require us to limit GHG emissions associated with our operations, pay additional taxes or purchase allowances for certain emissions.

However, we cannot predict precisely what form these future regulations will take, the stringency of the regulations, when they will become effective or the impact on our capital expenditures, competitive position and results of operations.

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

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

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Pipeline Safety - We are subject to PHMSA safety regulations, including pipeline asset integrity-management regulations.

The Pipeline Safety Improvement Act of 2002 requires pipeline companies operating high-pressure pipelines to perform integrity assessments on pipeline segments that pass through densely populated areas or near specifically designated high-consequence areas.

The Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 (the 2011 Pipeline Safety Act) increased maximum penalties for violating federal pipeline safety regulations, directs the DOT and Secretary of Transportation to conduct further review or studies on issues that may or may not be material to us and may result in the imposition of more stringent regulations.

In 2015, PHMSA issued notices of proposed rulemaking for hazardous liquid pipeline safety regulations, natural gas transmission and gathering lines and underground natural gas storage facilities, known as “the Mega Rule.” Due to the large number of rules being considered, PHMSA partitioned the new rulemaking into three sections.

To date, the first section of rules was finalized and published in 2019 in the federal register.

These final rules mostly address congressional mandates due to former pipeline safety reauthorizations.

We do not anticipate the potential capital and operating expenditures related to the first section of rules to create a material impact to our planned capital or operations and maintenance costs.

At this point, we do not fully know the impact of the regulations that remain to be finalized.

In 2015, PHMSA issued notices of proposed rule-making for hazardous liquid pipeline safety regulations, natural gas transmission and gathering lines and underground natural gas storage facilities.

For natural gas and natural gas gathering pipelines, the new proposed regulations became known as “the Mega Rule.” Due to the large number of rules being considered, PHMSA partitioned the new rule-making into three sections.

The first section of rules was finalized and published in 2019 in the Federal Register and became effective in July 2020.

These final rules mostly address congressional mandates due to former pipeline safety reauthorizations and established criteria for verifying current operating pressures.

The second section of the PHMSA Gas Mega Rule, which is still not currently published, focuses on repair requirements for HCAs and non-HCAs.

The third section of the Mega Rule established new regulations for certain gas gathering lines, which were formerly unregulated, and was published in November 2021 and will become effective in May 2022.

We do not anticipate the potential capital and operating expenditures related to the first and third sections of the rules to create a material impact to our planned capital or operations and maintenance costs.

At this point, we do not fully know the impact of

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the regulations that remain to be finalized.

Coupled together, these new rules may provide increased requirements for operating and maintenance, integrity management, public awareness and civil/criminal penalties;

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In 2020, legislation was passed to reauthorize PHMSA through 2024.

Certain requirements for operations and maintenance, integrity management, leak detection and public awareness will be subject to new rulemaking as a result.

Certain requirements for operations and maintenance, integrity management, leak detection and public awareness will be subject to future rule-making as a result.

The potential capital and operating expenditures related to the new regulations are not fully known, but we do not anticipate a material impact to our planned capital or operations and maintenance costs resulting from compliance with the new regulations.

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We may be required to incur certain capital expenditures for air pollution-control equipment in connection with obtaining or maintaining permits and approvals for sources of air emissions.

The Clean Water Act imposes substantial potential liability for the removal of pollutants discharged to waters of the United States and remediation of waters affected by such discharge.

The Clean Water Act imposes substantial potential liability for pollutants discharged into waters of the United States and requires remediation of waters affected by such discharge.

We monitor all relevant legislation and regulatory initiatives to assess the potential impact on our operations and otherwise take efforts to limit GHG emissions from our facilities, including methane.

The EPA’s Mandatory Greenhouse Gas Reporting Rule requires annual GHG emissions reporting from affected facilities and the carbon dioxide emission equivalents for the natural gas delivered by us and the emission equivalents for all NGLs produced by us as if all of these products were combusted, even if they are used otherwise.

Our 2019 total emissions reported pursuant to EPA requirements were approximately 60 million metric tons of carbon dioxide equivalents.

This total includes direct emissions from the combustion of fuel in our equipment, such as compressor engines and heaters, as well as carbon dioxide equivalents from natural gas and NGL products delivered to customers and produced as if all such fuel and NGL products were combusted.

The additional cost to gather and report this emission data did not have, and we

do not expect it to have, a material impact on our results of operations, financial position or cash flows.

The EPA’s Mandatory Greenhouse Gas Reporting Rule requires annual GHG emissions reporting from affected facilities and the carbon dioxide emission equivalents for all NGLs produced by us as if all of these products were combusted, even if they are used otherwise.

Our 2020 total estimated GHG emissions were 66.7 million metric tons of carbon dioxide equivalents, which includes 3.8 million metric tons of Scope 1 emissions and 2.5 million metric tons of Scope 2 emissions.

Scope 1 emissions originate from the combustion of fuel in our equipment, such as compressor engines and heaters, as well as fugitive methane emissions, Scope 2 emissions are generated from purchased power sources and Scope 3 emissions reflect the carbon dioxide emissions that would result from the complete combustion or oxidation of the annual quantity of NGL products produced and sold or delivered to others.

The additional cost to gather and report this emission data did not have, and we do not expect it to have, a material impact on our results of operations, financial position or cash flows.

In addition, Congress has considered, and may consider in the future, legislation to reduce GHG emissions, including carbon dioxide and methane.

Likewise, the EPA may institute additional regulatory rulemaking associated with GHG emissions from the oil and natural gas industry.

Likewise, the EPA may institute additional future regulatory rule-making associated with GHG emissions from the oil and natural gas industry.

At this time, no rule or legislation has been enacted that assesses any material costs, fees or expenses on any of these emissions.

We monitor proposed and final rulemakings.

We monitor proposed and final rule-makings.

Generally, EPA rule-makings require expenditures for updated emissions controls, monitoring and recordkeeping requirements at affected facilities.

At this time, we do not anticipate a material impact to our planned capital, operations and maintenance costs resulting from compliance with the current or pending regulations and EPA actions.

However, the EPA may issue additional regulations, responses, amendments and/or policy guidance, which could alter our present expectations.

Generally, EPA rulemakings require expenditures for updated emissions controls, monitoring and record-keeping requirements at affected facilities.

Chemical Site Security - The United States Department of Homeland Security (Homeland Security) released the Chemical Facility Anti-Terrorism Standards in 2007, and the final rule associated with these regulations was issued in December 2014.

Chemical Site Security - Homeland Security released the Chemical Facility Anti-Terrorism Standards in 2007, and the final rule associated with these regulations was issued in December 2014.

We provided information regarding our chemicals via Top-Screens submitted to Homeland Security, and our facilities subsequently were assigned one of four risk-based tiers ranging from high (Tier 1) to low (Tier 4) risk, or not tiered at all due to low risk.

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The cost of the Site Security Plans and security enhancements did not have a material impact on our results of operations, financial position or cash flows.

Pipeline Security - The United States Department of Homeland Security’s Transportation Security Administration and the DOT have completed a review and inspection of our “critical facilities” and identified no material security issues.

Also, the Transportation Security Administration has released new pipeline security guidelines that include broader definitions for the determination of pipeline “critical facilities.” We have reviewed our pipeline facilities according to the new guideline requirements, and there have been no material changes required to date.

Pipeline Security - Homeland Security’s Transportation Security Administration (TSA) and the DOT have completed a review and inspection of our “critical facilities” and identified no material security issues.

Also, the TSA has released new pipeline security guidelines that include broader definitions for the determination of pipeline “critical facilities.” We have reviewed our pipeline facilities according to the new guideline requirements, and there have been no material changes required to date.

The TSA issued two security directives in 2021 in response to ongoing cybersecurity threats to the pipeline industry.

The first security directive was issued in May 2021 and requires critical pipeline owners and operators to (1) report confirmed and potential cybersecurity incidents to the Cybersecurity and Infrastructure Security Agency (CISA);

(2) designate a cybersecurity coordinator to be available 24 hours a day, seven days a week;

(3) review current practices;

and, (4) identify any gaps and related remediation measures to address cyber-related risks and report the results to TSA and CISA within 30 days.

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security directive was issued in July 2021 and requires owners and operators of TSA-designated critical pipelines to implement specific mitigation measures to protect against ransomware and other known threats to information technology and operational technology systems, develop and implement a cybersecurity contingency and recovery plan, and conduct a cybersecurity architecture design review.

While compliance with the security directives is utilizing significant internal and external resources, we do not expect it to have a material impact on our results of operations, financial position or cash flows.

HUMAN CAPITAL

The long-term sustainability of our business is dependent on our continued ability to attract, select, develop, motivate, challenge and retain a diverse group of employees to execute our business strategies.

We manage our human capital by offering compensation and benefits that are designed to position us as an employer of choice.

We also invest significant time and resources developing our employees, training them on health, safety and compliance matters and building inclusive, high-performing teams.

The long-term sustainability of our business is dependent on our continued ability to maintain a highly engaged workforce.

To accomplish this, our business strategy includes attracting, selecting and retaining talent, advancing an inclusive, diverse and engaged culture and developing individuals and leaders.

As of December 31, 2021, we had 2,847 employees.

Listed below is a summary of our human capital resources, measures and objectives that are collectively important to our success as an organization.

Culture - Our success is due in large part to the skills, experience and dedication of our employees.

Values - Our success relies on the skills, experience and dedication of our employees.

We are committed to cultivating an inclusive and dynamic work environment where talented people can find opportunities to succeed, grow and contribute to the success of the company.

Our employees work each day to provide safe and reliable services to a wide range of customers in the states where we operate.

Our core values - Ethics, Quality, Diversity, Value and Service - guide the way in which our employees conduct our business and operations.

Our core value of Ethics means our actions are founded on trust, honesty and integrity through open communications and adherence to the highest standards of personal, professional and business ethics.

Our core value of Quality drives us to make continuous improvements in our quest for excellence.

Our core value of Diversity means we value the diversity, dignity and worth of each employee, and believe that a diverse and inclusive workforce is critical to our continued success.

Our core value of Value means we are committed to creating value for all stakeholders - employees, customers, investors and our communities - through the optimum development and utilization of our resources.

Finally, our core value of Service means we provide responsive, flexible service to customers, and commit to preserving the environment, providing a safe work environment and improving the quality of life for employees where they live and work.

Our core values, listed below, guide the way in which our employees conduct our business and operations.

• Safety & Environmental:

we commit to a zero-incident culture for the well-being of our employees, contractors and communities and to operate in an environmentally responsible manner.

we act with honesty, integrity and adherence to the highest standards of personal and professional conduct.

• Diversity & Inclusion:

we respect the uniqueness and worth of each employee and believe that a diverse, inclusive workforce is essential for a sense of belonging, engagement and performance.

• Excellence:

we hold ourselves and others accountable to a standard of excellence through continuous improvement and teamwork.

we invest our time, effort and resources to serve each other, our customers and communities.

• Innovation:

we seek to develop creative solutions by leveraging collaboration through ingenuity and technology.

Diversity and Inclusion - Our diversity and inclusion (D&I) strategy is a cross-functional effort that draws upon contributions from employees at all levels of the organization and is focused on enhancing the workplace to retain and attract talent.

The strategy is guided by a D&I Council composed of a diverse group of employees who represent different demographics, work locations, points of view, roles and levels of seniority.

Our Chief Executive Officer serves as chair of the D&I Council and attends all meetings of the D&I Council, along with the rest of our senior leadership team.

We also have a team within our organizational development group that is wholly dedicated to supporting our D&I efforts.

We also have a team within our human resources department that is wholly dedicated to supporting our D&I efforts.

In 2021, we provided funding and support for five employee-led business resource groups (BRGs):

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and a Women’s Resource Group.

A new LGBTQ+ (Lesbian, Gay, Bisexual, Transgender, Queer and others) BRG has been approved for 2022.

Each BRG’s purpose is to promote the attraction, development, motivation and retention of members of traditionally underrepresented groups in our industry and workplace in an effort to drive positive business outcomes.

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Employee Safety - The safety of our employees is critical to our operations and success.

By monitoring the integrity of our assets and promoting the safety of our employees, we are investing in the long-term sustainability of our businesses.

By promoting the safety of our employees, monitoring and investing in the integrity of our assets, we are enhancing the long-term sustainability of our businesses.

We continuously assess the risks our employees face in their jobs, and we work to mitigate those risks through training, appropriate engineering controls, work procedures and other preventive safety programs.

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We endeavor to operate our assets safely, reliably and in an environmentally responsible manner.

We maintain mature and robust programs that guide trained staff in the completion of these activities, and we continue to enhance and improve these programs and our internal capabilities.

In response to COVID-19, we have taken steps to manage the potential impacts of the COVID-19 outbreak on our employees.

We continue to practice remote work procedures when possible to protect the safety of our employees and their families, and have taken extra precautions for our employees who work in the field or need to report to a ONEOK facility, such as increased facility access restrictions, workspace modifications, social distancing, face covering protocols and sanitation procedures.

During 2020, ONEOK employees completed more than 50,000 hours of virtual and classroom training focused on employee safety.

We maintain mature and robust programs that guide trained staff in the completion of these activities, and we continue to enhance and improve these

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programs and our internal capabilities.

With respect to COVID-19, we began implementing our return to office plan in early 2022, and we will continue to take safety precautions for our employees who work in the field or report to a ONEOK facility, such as increased facility access restrictions, workspace modifications, social distancing, face covering protocols and sanitation procedures.

Health and Welfare - We provide a variety of benefits to help promote the health and welfare of our employees and their families.

These benefits include medical, dental and vision plans, virtual health visits and engagement of third-party service providers to offer company on-site and near-site clinics in several of our operating areas, which have access to both rapid antigen and polymerase chain reaction COVID-19 testing.

In response to COVID-19, we provided temporary benefit adjustments, including waiving charges for virtual health visits, COVID-19 diagnostic tests and COVID-19 vaccines.

In response to COVID-19, we provided temporary benefit adjustments, including waiving charges for COVID-19 diagnostic tests and COVID-19 vaccines.

Current resources include a dedicated employee information site that houses regular updates regarding COVID-19 and provides resources for prevention best practices, physical health, mental health and caregiver services.

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We offer full pay for maternity, paternity or adoption leave of up to 240 hours per qualifying event.

We also provide up to $10,000 for reasonable and necessary expenses of a qualifying adoption.

Additional benefits provided for the welfare of our employees include, among others, life insurance and long-term disability plans, health and dependent care flexible spending accounts, and full pay while on bereavement and personal and family care leave.

We also provide up to $10,000 for reasonable and necessary expenses of a qualifying adoption and/or surrogacy.

Additional benefits provided for the welfare of our employees include, among others, life insurance and long-term disability plans, health and dependent care flexible spending accounts, fertility benefits, disease prevention and management programs and full pay while on bereavement or personal and family care leave.

We also provide the opportunity for our employees to help fellow employees through the ONE Trust Fund by contributing donated vacation hours or monetary donations.

The ONE Trust Fund is a nonprofit, charitable organization, that serves our employees in times of personal crises due to natural disasters, medical emergencies or other hardships.

The ONE Trust Fund is a nonprofit, charitable organization run entirely by employee volunteers, that serves our employees in times of personal crises due to natural disasters, medical emergencies or other hardships.

Personal and Professional Development - We provide various options to assist with career growth and development.

For employees just entering the workforce who desire to advance their career and continue to learn or for the professional who is interested in developing their skills, we provide education and training in a variety of areas, including leadership, functional and industry-specific topics, professional development and skill-building opportunities.

Our organizational development and D&I teams provide live virtual classroom training, computer-based self-study and one-on-one coaching that is available to all employees.

Our organizational development and D&I teams provide live in-person and virtual classroom training, computer-based self-study and one-on-one coaching that is available to all employees.

We value education and assist eligible employees with the expense of furthering their education in job-related fields, including up to $5,000 per year in qualifying tuition expenses.

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Recruiting - We make it a priority to attract, select, develop, motivate, challenge and retain the talent necessary to support our key business strategies.

We use targeted recruitment events, maintain strong relationships with area technical schools, colleges

and universities, and we offer compensation benefits and career opportunities that are designed to position us as an employer of choice.

In response to COVID-19, we continue to recruit and hire new employees for critical positions through virtual interviews.

D&I continue to be a priority in recruiting, and we deploy sourcing strategies designed to access talent from groups that are historically underrepresented in our industry and workplace.

Retirement - We maintain a 401(k) Plan for our employees and match 100% of employee contributions up to 6% of eligible compensation, subject to applicable tax limits.

We also have a defined benefit pension plan covering certain employees and former employees hired prior to January 1, 2005.

We use targeted recruitment events, maintain strong relationships with area technical schools, colleges and universities, and we offer compensation benefits and career opportunities that are designed to position us as an employer of choice.

In response to COVID-19, we continue to recruit and hire new employees for critical positions primarily through virtual interviews.

D&I continues to be a priority in recruiting, and we deploy sourcing strategies designed to access talent from groups that are historically underrepresented in our industry and workplace.

Retirement - We maintain a 401(k) Plan for our employees and match 100% of employee contributions up to 6% of eligible compensation each payroll period, subject to applicable tax limits.

We also have a defined benefit pension plan covering certain employees and former employees, which closed to new participants in 2005.

Employees that do not participate in our defined benefit pension plan are eligible to receive quarterly and annual profit-sharing contributions under our 401(k) Plan.

As of December 31, 2020, approximately 96% of eligible employees were contributing to our 401(k) Plan.

In first quarter 2020, we opted into the CARES Act 401(k) penalty-free hardship withdrawal and loan deferral programs for employees.

As of December 31, 2021, 96% of eligible employees were contributing to our 401(k) Plan.

For additional information about our retirement benefits, see Note K of the Notes to Consolidated Financial Statements in this Annual Report.

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INFORMATION ABOUT OUR EXECUTIVE OFFICERS

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Chairman of the Board 2007 to 2017 Chairman of the Board, ONEOK Partners

Spencer 61 2014 to present President and Chief Executive Officer, ONEOK

President and Chief Executive Officer 2014 to 2017 President and Chief Executive Officer, ONEOK Partners

2014 to present Member of the Board of Directors, ONEOK

2014 to 2017 Member of the Board of Directors, ONEOK Partners

Norton II 62 2021 to present President and Chief Executive Officer, ONEOK

President and Chief Executive Officer 2021 to present Member of the Board of Directors, ONEOK

2014 to 2021 President and Chief Executive Officer, ONE Gas, Inc.

2014 to 2021 Member of the Board of Directors, ONE Gas, Inc.

Martinovich 64 2015 to present Executive Vice President and Chief Administrative Officer, ONEOK

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2016 to 2017 Senior Vice President, Natural Gas Gathering and Processing, ONEOK Partners

2013 to 2016 Vice President, Natural Gas Gathering and Processing, ONEOK Partners

Kelley 63 2018 to present Senior Vice President, Natural Gas, ONEOK

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We make available, free of charge, on our website (www.oneok.com) copies of our Annual Reports, Quarterly Reports, Current Reports on Form 8-K, amendments to those reports filed or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act and reports of holdings of our securities filed by our officers and directors under Section 16 of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC.

Copies of our Code of Business Conduct and Ethics, Corporate Governance Guidelines, Director Independence Guidelines, Corporate Sustainability Report, Response to COVID-19 and the written charter of our Audit Committee also are available on our website, and we will provide copies of these documents upon request.

Copies of our Code of Business Conduct and Ethics, Corporate Governance Guidelines, Director Independence Guidelines, Corporate Sustainability Report, Response to COVID-19 and the written charters of our Board Committees also are available on our website, and we will provide copies of these documents upon request.

In addition to our filings with the SEC and materials posted on our website, we also use social media platforms as additional channels of distribution to reach public investors.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business