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Item 7. Management’s Discussion and Analysis

2025-02-25 compared with 2024-02-27 · 267 added, 224 removed, 293 unchanged (63% of the section changed)

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Please refer to the “Financial Results and Operating Information” and “Liquidity and Capital Resources” sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report for additional information.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ethane Economics - Price differentials between ethane and natural gas can cause natural gas processors to recover ethane or leave it in the natural gas stream, known as ethane rejection.

As a result of these ethane economics, ethane volumes on our system can fluctuate.

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

We estimate that there are approximately 250 MBbl/d of discretionary ethane, consisting of approximately 150 MBbl/d in the Rocky Mountain region and approximately 100 MBbl/d in the Mid-Continent region, that could be recovered and transported on our system.

Acquisitions and Divestitures

EnLink Controlling Interest Acquisition - On Oct.

15, 2024, we completed the EnLink Controlling Interest Acquisition, acquiring GIP’s interest in EnLink consisting of approximately 43% of the outstanding EnLink Units for $14.90 in cash per unit and 100% of the outstanding limited liability company interests in the managing member of EnLink for $300 million, for total cash consideration of $3.3 billion.

Through our 100% ownership of the managing member of EnLink, we obtained control of EnLink.

We used a portion of the proceeds from our September 2024 underwritten public offering of $7.0 billion senior unsecured notes to fund this acquisition.

This acquisition meaningfully increases our scale and integrated value chain within the growing Permian Basin while expanding and extending our asset bases in the Mid-Continent, North Texas and Louisiana regions.

We expect to achieve significant synergies by combining our complementary asset positions.

Financial results and operating information related to the EnLink Controlling Interest Acquisition impacts all four business segments and is included with “Financial Results and Operating Information” for the period Oct.

15, 2024 to Dec.

EnLink Acquisition - On Nov.

24, 2024, we entered into the EnLink Merger Agreement to acquire all of the publicly held EnLink Units in an all stock, tax-free transaction.

31, 2025, we completed the EnLink Acquisition.

Pursuant to the EnLink Merger Agreement, each common unit of EnLink was exchanged for a fixed ratio of 0.1412 shares of ONEOK common stock, including EnLink Units that were exchanged for all previously outstanding Series B Preferred Units immediately prior to closing.

We issued 41 million shares of common stock, with a fair value of $4.0 billion as of the closing date of the EnLink Acquisition.

EnLink is now a wholly owned subsidiary.

Medallion Acquisition - On Oct.

31, 2024, we completed the Medallion Acquisition with GIP, acquiring all of the equity interests in Medallion for total consideration of $2.6 billion, inclusive of the purchase of additional interests in a Medallion joint venture owned by a separate third party.

We used a portion of the proceeds from our September 2024 underwritten public offering of $7.0 billion senior unsecured notes to fund this acquisition.

This acquisition expands our midstream services for crude oil and condensate in West Texas, specifically in the Midland Basin.

Financial results and operating information related to the Medallion Acquisition impacts our Refined Products and Crude segment and is included with "Financial Results and Operating Information" for the period Nov.

1, 2024 to Dec.

Interstate Natural Gas Pipeline Divestiture - On Dec.

31, 2024, we completed sale of three of our wholly owned interstate natural gas pipeline systems to DT Midstream, Inc.

for total cash consideration of $1.2 billion, and recognized a gain of $227 million.

With a portion of the proceeds of the sale, we repaid the Guardian Term Loan Agreement and the Viking Term Loan Agreement.

This transaction aligns and enhances our capital allocation priorities within our integrated value chain.

Gulf Coast NGL Pipelines Acquisition - On June 17, 2024, we completed the acquisition of a system of NGL pipelines from Easton Energy, a Houston-based midstream company, for approximately $280 million.

This acquisition in our Natural Gas Liquids segment includes approximately 450 miles of liquids products pipelines located in the strategic Gulf Coast market centers for NGLs, Refined Products and crude oil.

A portion of the Easton assets are already connected to our Mont Belvieu assets.

We expect to add connections to our Houston-based assets beginning in mid-2025 through the end of 2025.

For additional information on our most recent acquisitions and divestiture, see Part II, Item 8, Note B of the Notes to Consolidated Financial Statements in this Annual Report.

See Part 1, Item 1A “Risk Factors” for further discussion of risks related to these transactions.

Joint Ventures - On Feb.

4, 2025, we entered into definitive agreements to form joint ventures with MPLX LP (MPLX) to construct a 400 MBbl/d liquified petroleum gas export terminal in Texas City, Texas, and a new 24-inch pipeline from our Mont Belvieu, Texas, storage facility to the new terminal.

Texas City Logistics LLC, the export terminal joint venture, is owned 50% by us and 50% by MPLX, with MPLX constructing and operating the facility.

MBTC Pipeline LLC, the pipeline joint venture, is owned 80% by us and 20% by MPLX, and we will construct and operate the pipeline.

We expect to invest approximately $1.0 billion in these projects.

Market Condition - Earnings increased in 2024, compared with 2023, due primarily to a full year of earnings from our new Refined Products and Crude segment, higher NGL and natural gas processing volumes in the Rocky Mountain region and the impact of the interstate pipeline divestiture in the Natural Gas Pipelines segment.

Our extensive and integrated assets are located in, and connected with, some of the most productive shale basins, as well as refineries and demand centers, in the United States.

Capital Projects - Our primary capital projects are outlined in the table below:

Project Scope Approximate

Expected Completion

Natural Gas Liquids (In millions)

MB-6 fractionator 125 MBbl/d NGL fractionator in Mont Belvieu, Texas $550 Completed

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

West Texas NGL pipeline expansion Increase capacity to 740 MBbl/d in the Permian Basin

$520 First Quarter 2025

Elk Creek pipeline expansion

Increase capacity to 435 MBbl/d out of the Rocky Mountain region

$355 First Quarter 2025

Natural Gas Pipelines

Viking compressor stations Electrification and replacement of certain compressor assets $110 Completed

West Texas NGL pipeline expansion Increase capacity via pipeline looping in the Permian Basin $520 Completed

Elk Creek pipeline expansion Increase capacity to 435 MBbl/d out of the Rocky Mountain region $355 Completed (b)

Medford fractionator Rebuild our 210 MBbl/d NGL fractionation facility in Medford, Oklahoma

Refined Products and Crude

Greater Denver pipeline expansion Increase total system capacity by 35 MBbl/d and additional expansion capabilities

$480 Mid-2026

(a) - Excludes capitalized interest/AFUDC.

Debt Issuances - In August 2023, we completed an underwritten public offering of $5.25 billion senior unsecured notes consisting of $750 million, 5.55% senior notes due 2026;

$750 million, 5.65% senior notes due 2028;

(b) - We completed construction in January 2025, and the project is partially in service.

Following supply of full power, expected in mid-2025, we will reach the full capacity of 435 MBbl/d.

(c) - This project is expected to be completed in two phases, with the first phase expected to be completed in the fourth quarter of 2026, and the second phase completed in the first quarter of 2027.

In our Natural Gas Gathering and Processing segment, we have a capital project to relocate a 150 MMcf/d processing plant to the Permian Basin from North Texas, which we expect to be in service in the first quarter of 2026.

Debt Issuances - In September 2024, we completed an underwritten public offering of $7.0 billion senior unsecured notes 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;

and $1.75 billion, 6.625% senior notes due 2053.

$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.

The net proceeds, after deducting underwriting discounts, commissions and offering expenses, were $6.9 billion.

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

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

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

In June 2023, we redeemed our $500 million, 7.5% senior notes due September 2023 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.

In February 2023, we redeemed our $425 million, 5.0% senior notes due September 2023 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.

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

The net proceeds from this offering were used to fund the EnLink Controlling Interest Acquisition and the Medallion Acquisition, purchase additional interests in a Medallion joint venture owned by a separate third party, to pay fees and expenses related to the acquisitions and to repay outstanding indebtedness.

Debt Repayments - In December 2024, we redeemed our $500 million, 4.9% senior notes due March 2025 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.

In September 2024, we repaid the remaining $484 million of our $500 million, 2.75% senior notes at maturity with cash on hand.

Share Repurchase Program - In January 2024, our Board of Directors authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock.

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

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

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

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

The program will terminate upon completion of the repurchase of $2.0 billion of common stock or on Jan.

1, 2029, whichever occurs first.

17, 2025, we repurchased 1.675 million shares for $172 million under the program.

Dividends - During 2024, we paid common stock dividends totaling $3.96 per share, an increase of 3.7% compared to the 2023 dividend of $3.82 per share.

In February 2025, we paid a quarterly common stock dividend of $1.03 per share ($4.12 per share on an annualized basis), an increase of 4% compared with the same quarter in the prior year.

Our dividend growth is primarily due to the increase in cash flows resulting from the growth of our operations.

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Our dividend growth is due primarily to the increase in cash flows resulting from the growth of our operations.

The quarterly stock dividend was paid on Feb.

14, 2025, to shareholders of record at the close of business on Feb.

FINANCIAL RESULTS AND OPERATING INFORMATION

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

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

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

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

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Additionally, this calculation may not be comparable with similarly titled measures of other companies.

See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” subsection.

Consolidated Operations

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

Years Ended December 31, 2023 vs.

Years Ended Dec.

2023 2023 vs.

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Commodity sales $ 17,780 $ 15,614 $ 20,976 2,166 (5,362)

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

Services and other

3,918 2,063 1,411 1,855 652

Total revenues 21,698 17,677 22,387 4,021 (4,710)

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Net income $ 3,112 $ 2,659 $ 1,722 453 937

Net income attributable to ONEOK

$ 3,035 $ 2,659 $ 1,722 376 937

Diluted EPS $ 5.17 $ 5.48 $ 3.84 (0.31) 1.64

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Capital expenditures $ 2,021 $ 1,595 $ 1,202 426 393

See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.

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Changes in commodity prices and sales volumes affect both revenues and cost of sales and fuel in our Consolidated Statements of Income and, therefore, the impact is largely offset between these line items.

2022 - Operating income increased $1.3 billion primarily as a result of the following:

• Natural Gas Gathering and Processing - an increase of $227 million from higher volumes in the Rocky Mountain and Mid-Continent regions and an increase of $49 million due primarily to higher average fee rates;

• Natural Gas Liquids - an increase of $663 million related to the Medford incident and an increase of $303 million in exchange services;

• Natural Gas Pipelines - an increase of $43 million in transportation and storage services;

• Refined Products and Crude - transportation and storage revenues of $535 million for the period of September 25, 2023, through December 31, 2023 due to the impact of the Magellan Acquisition;

• Consolidated Operating, Depreciation and Transaction Costs - an increase of $290 million in operating costs and depreciation expense from our Refined Products and Crude segment, an increase of $158 million from transaction costs related to the Magellan Acquisition and an increase of $239 million due primarily to higher operating costs and depreciation expense in our Natural Gas Gathering and Processing, Natural Gas Liquids and Natural Gas Pipelines segments.

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

These increases were offset partially by higher income taxes and higher interest expense due to interest costs resulting from the Magellan Acquisition, which include acquired debt balances, our August 2023 $5.25 billion notes offering and commitment fees associated with our undrawn and terminated 364-day bridge loan facility.

Capital expenditures increased due primarily to our capital projects, including our MB-6 fractionator, NGL pipeline expansion projects and the Viking compression project.

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

In connection with the Magellan Acquisition, we reviewed our business segments in light of certain changes in the financial information regularly reviewed by our chief operating decision maker and other factors.

Based on this review, we added the Refined Products and Crude segment.

This change, which was effective as of September 25, 2023, had no impact on our consolidated financial statements for any periods.

Selected Financial Results and Operating Information for the Year Ended December 31, 2022 vs.

2021 - The consolidated and segment financial results and operating information for the year ended December 31, 2022, compared with the year ended December 31, 2021, are included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2022 Annual Report on Form 10-K, which is available via the SEC’s website at www.sec.gov and our website at www.oneok.com.

Due to the Medallion Acquisition and EnLink Controlling Interest Acquisition, operating results for these two companies are included in our financial results beginning Nov.

1, 2024 and Oct.

15, 2024, respectively.

2023 - Operating income increased $917 million primarily as a result of the following:

• Natural Gas Gathering and Processing - an increase of $181 million due primarily to the operating income of EnLink, higher volumes in the Rocky Mountain region and the sale of certain non-strategic assets, offset partially by lower realized NGL prices, net of hedging, and higher operating costs;

• Natural Gas Liquids - a decrease of $564 million due primarily to an insurance settlement gain in 2023 related to the Medford incident and higher operating costs, offset partially by an increase in exchange services due primarily to higher volumes in the Rocky Mountain region and to the operating income of EnLink;

• Natural Gas Pipelines - an increase of $291 million due primarily to the interstate natural gas pipeline divestiture in 2024, higher transportation services and the operating income of EnLink;

• Refined Products and Crude - an increase of $934 million due to a full year of operating income following the Magellan Acquisition in 2023 and the operating income of Medallion and EnLink in 2024;

• Consolidated Transaction Costs - a decrease of $85 million due primarily to higher transaction costs related to the Magellan Acquisition in 2023.

Net income increased due primarily to the items discussed above and higher equity in net earnings from investments, offset partially by higher interest expense due to higher debt balances resulting from the August 2023 $5.25 billion notes offering, the September 2024 $7.0 billion notes offering and the acquired debt balances from both the Magellan Acquisition in 2023 and the EnLink Controlling Interest Acquisition in 2024.

Diluted EPS decreased due primarily to the impact of the insurance settlement gain in 2023 related to the Medford incident .

Capital expenditures increased due primarily to our capital projects.

Please refer to the “Recent Developments” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report for additional information on our capital projects.

Additional information regarding our financial results and operating information is provided in the following discussion for each of our segments.

Selected Financial Results and Operating Information for the Year Ended Dec.

2022 - The consolidated and segment financial results and operating information for the year ended Dec.

31, 2023, compared with the year ended Dec.

31, 2022, are included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Annual Report on Form 10-K, which is available via the SEC’s website at www.sec.gov and our website at www.oneok.com.

Natural Gas Gathering and Processing

Capital Projects - Our Natural Gas Gathering and Processing segment invests in capital projects in NGL-rich areas where we operate.

Capital Projects - Our Natural Gas Gathering and Processing segment invests in capital projects in natural gas and NGL-rich areas across key basins where we operate.

See “Capital Projects” in the “Recent Developments” section for more information on our capital projects.

For a discussion of our capital expenditure financing, see “Capital Expenditures” in the “Liquidity and Capital Resources” section.

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Selected Financial Results and Operating Information - The following tables set forth certain selected financial results and operating information for our Natural Gas Gathering and Processing segment for the periods indicated:

Years Ended December 31, 2023 vs.

Years Ended Dec.

2023 2023 vs.

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(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates, which resulted in an additional $3 million of adjusted EBITDA in 2023, and we have not restated prior periods.

See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.

Changes in commodity prices and sales volumes affect both revenue and cost of sales and fuel, and, therefore, the impact is largely offset between these line items.

2023 - Adjusted EBITDA increased $240 million, primarily as a result of the following:

• an increase of $227 million from higher volumes due primarily to increased producer activity in the Rocky Mountain and Mid-Continent regions, and the impact of winter weather in the Rocky Mountain region in the second and fourth quarters of 2022;

• an increase of $49 million due primarily to higher average fee rates and realized condensate prices, net of hedging, offset partially by lower realized NGL prices, net of hedging;

• an increase of $62 million in operating costs due primarily to higher employee-related costs, outside services and materials and supplies expense due primarily to the growth of our operations, and higher property insurance premiums.

Capital expenditures remained relatively unchanged for 2023, as compared to 2022, due primarily to increased expenditures in 2023 on various capital projects, offset by expenditures in 2022 on our Demicks Lake III project completed in the first quarter of 2023.

Years Ended December 31,

• an increase of $200 million due to adjusted EBITDA from EnLink;

• an increase of $77 million from higher volumes due primarily to increased production in the Rocky Mountain region;

• an increase of $59 million from the sale of certain non-strategic assets in 2024, primarily in Kansas;

• a decrease of $54 million due primarily to lower realized NGL prices, net of hedging, offset partially by higher average fee rates and realized condensate and natural gas prices, net of hedging;

• an increase of $44 million in operating costs due primarily to higher outside services, employee-related costs and materials and supplies expense due primarily to the growth of our operations.

Capital expenditures increased for 2024, as compared to 2023, due to capital projects for EnLink.

Years Ended Dec.

Operating Information (a) 2024 2023 2022

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$ 1.20 $ 1.17 $ 1.10

(a) - Includes volumes for consolidated entities only.

(a) - Includes volumes for consolidated entities only, and excludes EnLink, as EnLink operating statistics are not meaningful to full-year 2024 operating results.

(b) - Includes volumes we processed at company-owned and third-party facilities.

2022 - Our natural gas processed volumes increased due primarily to increased producer activity in the Rocky Mountain and Mid-Continent regions and the impact of winter weather in the Rocky Mountain region in the second and fourth quarters of 2022.

Our average fee rate increased due primarily to increased contribution of volumes on higher fee contracts in the Williston Basin and inflation-based escalators in our contracts.

Also, for certain fee with POP contracts, our contractual fees increased due to production volumes, delivery pressures or commodity prices relative to specified contractual thresholds.

2023 - Our natural gas processed volumes increased due primarily to increased production in the Rocky Mountain region.

Our average fee rate increased due primarily to inflation-based escalators in our contracts.

Natural Gas Liquids

Capital Projects - Our Natural Gas Liquids segment invests in capital projects to transport, fractionate, store, deliver to market centers and receive NGL supply from shale and other resource development areas.

Our growth strategy is focused around

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connecting diversified supply basins from the Rocky Mountain region through the Mid-Continent region and the Permian Basin with demand for Purity NGLs from the petrochemical and refining industries and NGL exports in the Gulf Coast.

We proactively monitor lead times on materials and equipment used in constructing capital projects, and we enter into procurement agreements for long-lead items for potential projects to plan for future growth.

Our growth strategy is focused on connecting diversified raw feed supply basins to Purity NGL export, petrochemical and refining demand centers.

See “Capital Projects” in the “Recent Developments” section for more information on our capital projects.

In 2023, we connected two third-party natural gas processing plants in the Permian Basin and one affiliate natural gas processing plant in the Rocky Mountain region.

In 2024, we connected one third-party natural gas processing plant in the Permian Basin to our system, and two third-party natural gas processing plants previously connected to our system were expanded, one in the Permian Basin and one in the Mid-Continent region.

For a discussion of our capital expenditure financing, see “Capital Expenditures” in the “Liquidity and Capital Resources” section.

Selected Financial Results and Operating Information - The following tables set forth certain selected financial results and operating information for our Natural Gas Liquids segment for the periods indicated:

Years Ended December 31, 2023 vs.

Years Ended Dec.

2023 2023 vs.

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Adjusted EBITDA from unconsolidated affiliates (a)

Equity in net earnings from investments (a)

95 67 — 28 67

Equity in net earnings from investments (a)

Other 3 778 88 (775) 690

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(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates, which resulted in an additional $9 million of adjusted EBITDA in 2023, and we have not restated prior periods.

See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.

Changes in commodity prices and sales volumes affect both revenues and cost of sales and fuel and, therefore, the impact is largely offset between these line items.

2022 - Adjusted EBITDA increased $950 million primarily as a result of the following:

• an increase of $663 million related to the Medford incident, due to the settlement gain of $779 million, offset partially by $146 million of third-party fractionation costs, compared with an approximately $30 million unfavorable impact of the 45-day waiting period in 2022;

• an increase of $303 million in exchange services due primarily to higher volumes across the system, offset partially by narrower commodity price differentials;

• an increase of $32 million in earnings from unconsolidated affiliates due primarily to higher volumes delivered to the Overland Pass pipeline and the change in calculation methodology in 2023;

• an increase of $20 million due primarily to higher volumes on the ONEOK North System and higher storage revenue;

• an increase of $12 million in optimization and marketing due primarily to higher earnings on sales of Purity NGLs held in inventory;

• an increase of $88 million in operating costs due primarily to higher employee-related costs and higher outside services due to the growth of our operations, and higher property insurance premiums.

Capital expenditur es increased in 2023 due primarily to capital projects, which includes our MB-6 fractionator and pipeline expansion projects.

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Years Ended December 31,

2023 - Adjusted EBITDA decreased $502 million primarily as a result of the following:

• a decrease of $695 million related to the Medford incident, due primarily to an insurance settlement gain in 2023 of $779 million, offset partially by $84 million of lower third-party fractionation costs in the current year;

• an increase of $77 million in operating costs due primarily to planned asset maintenance, higher employee-related costs and property taxes from the growth of our operations;

• a decrease of $9 million in optimization and marketing due primarily to lower earnings on sales of Purity NGLs held in inventory;

• an increase of $184 million in exchange services due primarily to higher volumes in the Rocky Mountain region, higher average fee rates and wider commodity price differentials, offset partially by lower volumes in the Gulf Coast/Permian and Mid-Continent regions, and higher transportation costs;

• an increase of $59 million due to adjusted EBITDA from EnLink;

• an increase of $31 million in adjusted EBITDA from unconsolidated affiliates due primarily to higher volumes delivered to the Overland Pass Pipeline.

Capital expenditures increased in 2024 due primarily to capital projects, which includes our MB-6 fractionator and pipeline expansion projects.

Years Ended Dec.

Operating Information 2024 2023 2022

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1,309 1,359 1,237

Average Conway-to-Mont Belvieu OPIS price differential -

Average Conway-to-Mont Belvieu Oil Price Information Service price differential -

ethane in ethane/propane mix ( $/gallon )

$ 0.01 $ 0.04 $ 0.04

(a) - Represents physical raw feed volumes for which we provide transportation and/or fractionation services.

(a) - Represents physical raw feed volumes for which we provide transportation and/or fractionation services, and excludes EnLink, as EnLink operating statistics are not meaningful to full-year 2024 operating results.

We generally expect ethane volumes to increase or decrease with corresponding increases or decreases in overall NGL production.

However, ethane volumes may experience growth or decline greater than corresponding growth or decline in overall NGL production due to ethane economics causing producers to recover or reject ethane.

2022 - Volumes increased due primarily to increased production in the Permian Basin and Rocky Mountain region and increased ethane volumes in the Mid-Continent region.

2023 - While exchange services earnings increased, volumes decreased in 2024 due primarily to the expiration of low-margin contracts in the prior year and lower volumes in the Permian Basin, offset partially by increased production in the Rocky Mountain region at higher fee rates.

Natural Gas Pipelines

Capital Projects - Our Natural Gas Pipelines segment invests in capital projects that provide transportation and storage services to end users.

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

and Mexico border.

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

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

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

In 2023, we completed an expansion of our injection capabilities of our Oklahoma natural gas storage facilities, which allowed us to utilize and subscribe an additional 4 Bcf of our existing storage capacity, which is fully subscribed through 2027 and 90% subscribed through 2029.

We are reactivating previously idled storage facilities with 3 Bcf of working gas storage capacity in Texas, which is already fully subscribed on a firm basis.

We are also further expanding our injection capabilities in Oklahoma to allow us to subscribe additional firm storage capacity.

See “Capital Projects” in the “Recent Developments” section for a discussion of our capital projects.

We recently reactivated previously idled storage facilities with 3 Bcf of working gas storage capacity in Texas.

In addition, we are in the process of expanding our storage injection capabilities in Oklahoma, adding 4 Bcf of working gas storage capacity, which we expect to be complete in the second quarter of 2025.

For a discussion of our capital expenditure financing, see “Capital Expenditures” in the “Liquidity and Capital Resources” section.

Interstate Natural Gas Pipeline Divestiture - On Nov.

19, 2024, we entered into a definitive agreement with DT Midstream, Inc.

to sell three of our wholly owned interstate natural gas pipeline systems.

31, 2024, we completed the sale and recognized a gain of $227 million.

Selected Financial Results and Operating Information - The following tables set forth certain selected financial results and operating information for our Natural Gas Pipelines segment for the periods indicated:

Years Ended December 31, 2023 vs.

Years Ended Dec.

2023 2023 vs.

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(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates, which resulted in an additional $42 million of adjusted EBITDA in 2023, and we have not restated prior periods.

See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.

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2023 - Adjusted EBITDA increased $341 million primarily as a result of the following:

• an increase of $43 million in transportation and storage services due primarily to higher storage rates on renegotiated contracts, higher storage volumes related to completed projects and higher firm and interruptible transportation volumes;

• an increase of $42 million in earnings from unconsolidated affiliates due to the change in calculation methodology in 2023;

• an increase of $20 million in operating costs due primarily to higher employee-related costs.

Capital expenditur es increased in 2023 due primarily to capital projects, including the Viking compression project.

Years Ended December 31,

• an increase of $227 million due to the interstate natural gas pipeline divestiture;

• an increase of $75 million in transportation services due primarily to higher firm and interruptible rates;

• an increase of $41 million due to adjusted EBITDA from EnLink;

• an increase of $16 million in adjusted EBITDA from unconsolidated affiliates due primarily to increased volumes on Northern Border;

• an increase of $19 million in operating costs due primarily to planned asset maintenance and employee-related costs.

Capital expenditur e s increased in 2024 due primarily to capital projects and timing of maintenance projects.

Years Ended Dec.

Operating Information (a) 2024 2023 2022

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Transportation capacity contracted 97 % 96 % 94 %

(a) - Includes volumes for consolidated entities only.

In April 2022, the FERC initiated a review of Guardian’s rates pursuant to Section 5 of the Natural Gas Act.

In August 2022, Guardian reached a settlement in principle with the participants in the Section 5 rate case.

The FERC approved the settlement in February 2023, which resulted in a reduction of rates starting in April 2023 .

The reduced rates did not have a material impact on our results of operations.

In July 2023, Viking filed a proposed increase in rates pursuant to Section 4 of the Natural Gas Act with the FERC .

The FERC is currently reviewing the filing.

While the ultimate outcome of the filing cannot be predicted, we do not expect it to materially impact our results of operations.

(a) - Includes volumes for consolidated entities only and excludes EnLink, as EnLink operating statistics are not meaningful to full-year 2024 operating results.

2023 - Natural gas transportation capacity contrac ted increased due primarily to the completion of expansion projects on our assets.

Refined Products and Crude

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Our growth strategy is focused on expanding our core business and marketing presence.

See “Capital Projects” in the “Recent Developments” section for more information on our capital projects.

For a discussion of our capital expenditure financing, see “Capital Expenditures” in the “Liquidity and Capital Resources” section.

Selected Financial Results and Operating Information - The following tables set forth certain selected financial results and operating information for our Refined Products and Crude segment for the period subsequent to the closing of the Magellan Acquisition:

September 25 through December 31, 2023

Financial Results

Financial Results Year Ended Dec.

31, 2024 Sept.

25 through Dec.

( Millions of dollars )

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Cost of sales and fuel (exclusive of depreciation and operating costs)

(1,949) (450)

Operating costs, excluding noncash compensation adjustments

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Capital expenditures $ 216 $ 52

See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” section.

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(a) - T he year ended Dec.

31, 2023, includes results subsequent to the Magellan Acquisition.

Three Months Ended December 31,

2023 - Adjusted EBITDA increased $1,427 million as a result of the following:

• an increase of $1,354 million due to a full-year of operating results following the Magellan Acquisition, which includes a non-recurring increase in adjusted EBITDA from unconsolidated affiliates of $88 million due primarily to BridgeTex;

• an increase of $73 million due to adjusted EBITDA from Medallion and EnLink.

Operating Information (a)

31, 2024 Three Months Ended Dec.

Refined Products volume shipped ( MBbl/d )

Crude oil volume shipped ( MBbl/d )

(a) - Includes volumes for consolidated entities only.

(a) - Includes volumes for consolidated entities only and excludes Medallion and EnLink, as Medallion and EnLink operating statistics are not meaningful to full-year 2024 operating results.

Market conditions and seasonality can cause volume fluctuations in a single quarter that are not representative of full-year results.

NON-GAAP FINANCIAL MEASURES

The following table sets forth a reconciliation of net income, the nearest comparable GAAP financial performance measure, to adjusted EBITDA for the periods indicated:

Years Ended December 31,

Years Ended Dec.

( Unaudited )

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Income taxes 998 838 528

Adjusted EBITDA from unconsolidated affiliates (c)

Equity in net earnings from investments (c)

Adjusted EBITDA from unconsolidated affiliates (a) 532 264 —

Equity in net earnings from investments (a) (439) (202) —

Noncash compensation expense and other 76 49 68

Adjusted EBITDA (a)(b)(c) $ 5,243 $ 3,620 $ 3,380

Adjusted EBITDA (a)(b)(c)(d) $ 6,784 $ 5,243 $ 3,620

Reconciliation of segment adjusted EBITDA to adjusted EBITDA

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Natural Gas Gathering and Processing $ 1,484 $ 1,244 $ 1,037

Natural Gas Liquids (a) 3,045 2,095 1,964

Natural Gas Pipelines 559 488 528

Refined Products and Crude (d)

Other (b) (70) — (1)

Adjusted EBITDA (a)(b)(c) $ 5,243 $ 3,620 $ 3,380

(a) - The year ended December 31, 2023, includes $633 million related to the Medford incident, including a settlement gain of $779 million, offset partially by $146 million of third-party fractionation costs.

(b) - The year ended December 31, 2023, primarily includes transaction costs related to the Magellan Acquisition of $158 million, offset partially by interest income of $49 million and net gains of $41 million on extinguishment of debt related to open market repurchases.

(c) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments.

Natural Gas Liquids (b) 2,543 3,045 2,095

Natural Gas Pipelines (d) 900 559 488

Refined Products and Crude (e) 1,892 465 —

Other (c) (35) (70) —

Adjusted EBITDA (a)(b)(c)(d) $ 6,784 $ 5,243 $ 3,620

(a) - Beginning in 2023, we updated our calculation methodology of adjusted EBITDA to include adjusted EBITDA from our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments.

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

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

(d) - Includes segment adjusted EBITDA for the period September 25, 2023, through December 31, 2023.

(b) - The year ended Dec.

31, 2023, includes $633 million related to the Medford incident, including a settlement gain of $779 million, offset partially by $146 million of third-party fractionation costs.

31, 2024 includes transaction costs related primarily to the EnLink Acquisitions and Medallion Acquisition of $73 million, offset partially by interest income of $39 million.

The year ended Dec.

31, 2023, includes transaction costs related to the Magellan Acquisition of $158 million, offset partially by interest income of $49 million and net gains of $41 million on extinguishment of debt related to open market repurchases.

(d) - The year ended Dec.

31, 2024, includes a gain of $227 million from the interstate natural gas pipeline divestiture.

(e) - The year ended Dec.

31, 2023, includes segment adjusted EBITDA for the period Sept.

25, 2023, through Dec.

CONTINGENCIES

See Note O of the Notes to Consolidated Financial Statements in this Annual Report for a discussion of environmental and legal matters.

See Note P of the Notes to Consolidated Financial Statements in this Annual Report for a discussion of regulatory and legal matters.

Other Legal Proceedings - We are a party to various legal proceedings that have arisen in the normal course of our operations.

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General - Our primary sources of cash inflows are operating cash flows, proceeds from our commercial paper program and our $3.5 Billion Credit Agreement, debt issuances and the issuance of common stock for our liquidity and capital resources requirements.

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

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

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

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

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

We expect our sources of cash inflows to provide sufficient resources to finance our operations, capital expenditures, quarterly cash dividends, maturities of long-term debt, share repurchases and contributions to unconsolidated affiliates.

We believe we have sufficient liquidity due to our $2.5 Billion Credit Agreement, which expires in June 2027, and access to $1.0 billion available through our “at-the-market” equity program.

As of the date of this report, no shares have been sold through our “at-the-market” equity program.

We believe we have sufficient liquidity due to our $3.5 Billion Credit Agreement, which expires in February 2030, and access to $1.0 billion available through our “at-the-market” equity program.

17, 2025, no shares have been sold through our “at-the-market” equity program.

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

For additional information on our interest-rate swaps, see Note E of the Notes to Consolidated Financial Statements in this Annual Report.

Cash Management - At December 31, 2023, we had $338 million of cash and cash equivalents.

We use a centralized cash management program that concentrates the cash assets of our nonguarantor operating subsidiaries in joint accounts for the purposes of providing financial flexibility and lowering the cost of borrowing, transaction costs and bank fees.

Cash Management - At Dec.

31, 2024, we had $733 million of cash and cash equivalents.

For our wholly owned subsidiaries, we use a centralized cash management program that concentrates the cash assets of our wholly owned nonguarantor operating subsidiaries in joint accounts for the purposes of providing financial flexibility and lowering the cost of borrowing, transaction costs and bank fees.

Our centralized cash management program provides that funds in excess of the daily needs of our operating subsidiaries are concentrated, consolidated or otherwise made available for use by other entities within our consolidated group.

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Under the cash management program, depending on whether a participating subsidiary has short-term cash surpluses or cash requirements, we provide cash to the subsidiary or the subsidiary provides cash to us.

Guarantees - In December 2023, ONEOK assumed the debt obligations of Magellan under its previous debt indentures and Magellan provided a guarantee of the outstanding notes.

As of December 31, 2023, Magellan no longer had debt obligations outstanding.

We guarantee certain debt securities of ONEOK Partners, and ONEOK Partners, the Intermediate Partnership and Magellan guarantee certain of our debt securities.

The guarantees in place for our and ONEOK Partners’ indebtedness are full, irrevocable, unconditional and absolute joint and several guarantees to the holders of each series of outstanding securities.

In December 2024, we entered into an agreement to provide revolving unsecured loans to EnLink through a promissory note at an interest rate of 4.85% at Dec.

This is a floating rate agreement which bears interest at ONEOK’s current short-term borrowing rate plus 0.25%.

31, 2024, we held a promissory note receivable of $510 million, which was eliminated in consolidation.

Interest earned on this agreement was not material.

Following the EnLink Acquisition, completed on Jan.

31, 2025, we effectively terminated this agreement as EnLink operating subsidiaries are wholly owned and now participate in the cash management program described above.

Guarantees - ONEOK, ONEOK Partners, the Intermediate Partnership and Magellan (Obligated Group) have cross guarantees in place for ONEOK’s and ONEOK Partners’ indebtedness.

These guarantees in place for our and ONEOK Partners’ indebtedness are full, irrevocable, unconditional and absolute joint and several guarantees to the holders of each series of outstanding securities.

Liabilities under the guarantees rank equally in right of payment with all existing and future senior unsecured indebtedness.

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Magellan holds interests in its subsidiaries, which are nonguarantors, and substantially all the assets and operations reside with nonguarantor operating subsidiaries.

Therefore, as allowed under Rule 13-01, we have excluded the summarized financial information for each issuer and guarantor as the combined financial information of the subsidiary issuers and parent guarantor, excluding our ownership of all the interests in ONEOK Partners and Magellan, reflect no material assets, liabilities or results of operations, apart from the guaranteed indebtedness.

For additional information on our and ONEOK Partners’ indebtedness, please see Note H of the Notes to Consolidated Financial Statements in this Annual Report.

Short-term Liquidity - Our principal sources of short-term liquidity consist of cash generated from operating activities, distributions received from our equity-method investments, proceeds from our commercial paper program and our $2.5 Billion Credit Agreement.

As of December 31, 2023, we had no borrowings under our $2.5 Billion Credit Agreement and we are in compliance with all covenants.

We had working capital (defined as current assets less current liabilities) deficits of $344 million and $503 million as of December 31, 2023, and December 31, 2022, respectively due primarily to current maturities of long-term debt.

31, 2024, EnLink was a subsidiary of ONEOK, but did not guarantee ONEOK’s or ONEOK Partners’ indebtedness and was excluded from the Obligated Group.

EnLink and EnLink Partners also had outstanding debt securities that were not guaranteed by ONEOK as of Dec.

At the completion of the EnLink Acquisition on Jan.

31, 2025, ONEOK assumed the outstanding debt of EnLink and EnLink Partners (the Assumed Debt) such that EnLink and EnLink Partners were each released from all debt obligations, and provided a guarantee for our and ONEOK Partners’ indebtedness to the holders of each series of outstanding securities, including for the Assumed Debt.

EnLink and EnLink Partners are now included in the Obligated Group.

As of the date of this report, the combined financial information of subsidiary issuers and parent guarantors, excluding our ownership of all interest in ONEOK Partners, Magellan and EnLink, reflect no material assets or liabilities or results of operations, apart from guaranteed indebtedness and therefore, we have excluded the summarized financial information for each issuer and guarantor.

For additional information on our indebtedness, please see Note H of the Notes to Consolidated Financial Statements in this Annual Report.

Short-term Liquidity - Our principal sources of short-term liquidity consist of cash generated from operating activities, distributions received from our unconsolidated affiliates, proceeds from our commercial paper program and our recently executed $3.5 Billion Credit Agreement.

In February 2025, we amended and restated our $2.5 Billion Credit Agreement to increase the size to $3.5 billion, extend the term to February 2030 and make other non-material modifications.

All other terms and conditions remain substantially the same.

17, 2025, we had no borrowings under our $3.5 Billion Credit Agreement, and we are in compliance with all covenants.

Upon closing of the EnLink Acquisition on Jan.

31, 2025, the EnLink Revolving Credit Facility was terminated.

We had working capital (defined as current assets less current liabilities) deficits of $481 million and $344 million as of Dec.

31, 2024, and Dec.

31, 2023, respectively, due primarily to current maturities of long-term debt.

Generally, our working capital is influenced by several factors, including, among other things:

(i) the timing of (a) debt and equity issuances, (b) the funding of capital expenditures, (c) scheduled debt repayments, and (d) accounts receivable and payable;

(i) the timing of (a) debt and equity issuances, (b) the funding of capital expenditures, (c) scheduled debt payments, and (d) accounts receivable and payable;

and (ii) the volume and cost of inventory and commodity imbalances.

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For additional information on our $3.5 Billion Credit Agreement, see Note H of the Notes to Consolidated Financial Statements in this Annual Report.

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Long-term Financing - In addition to our principal sources of short-term liquidity discussed above, we expect to fund our longer-term financing requirements by issuing long-term notes, as needed.

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The amounts involved may be material.

Debt Issuances - In August 2023, we completed an underwritten public offering of $5.25 billion senior unsecured notes consisting of $750 million, 5.55% senior notes due 2026;

$750 million, 5.65% senior notes due 2028;

Debt Issuances - In September 2024, we completed an underwritten public offering of $7.0 billion senior unsecured notes consisting of senior notes of the following 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;

and $1.75 billion, 6.625% senior notes due 2053.

$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.

The net proceeds, after deducting underwriting discounts, commissions and offering expenses, were $6.9 billion.

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

In connection with the underwritten public offering, we terminated the undrawn commitment letter for the $5.25 billion unsecured 364-day bridge loan facility.

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

In November 2023, we made an equity contribution of $91 million to Northern Border, which in combination with an equal contribution from our joint venture partner, was used to partially repay the outstanding balance of its revolving credit facility and fund capital projects.

In June 2023, we redeemed our $500 million, 7.5% senior notes due September 2023 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.

In June 2023, we made an equity contribution of $105 million to Roadrunner, which, in combination with an equal contribution from our joint venture partner, was used to repay Roadrunner’s outstanding debt.

In February 2023, we redeemed our $425 million, 5.0% senior notes due September 2023 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.

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

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

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

Debt Repayments - In December 2024, we repaid $120 million of borrowings under the Guardian Term Loan Agreement and $60 million of borrowings under the Viking Term Loan Agreement, plus accrued and unpaid interest, with cash on hand, as part of the interstate natural gas pipeline divestiture.

In December 2024, we redeemed our $500 million, 4.9% senior notes due March 2025 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand.

Subsequent to the EnLink Controlling Interest Acquisition, we repaid $465 million of borrowings under the EnLink Revolving Credit Facility with cash on hand.

Subsequent to the EnLink Controlling Interest Acquisition, we repaid $374 million of borrowings under the EnLink AR Facility with cash on hand and terminated the EnLink AR Facility.

In September 2024, we repaid the remaining $484 million of our $500 million, 2.75% senior notes at maturity with cash on hand.

Equity - On Jan.

31, 2025, we completed the EnLink Acquisition.

Pursuant to the EnLink Merger Agreement, each common unit of EnLink was exchanged for a fixed ratio of 0.1412 shares of ONEOK Common stock, including EnLink Units that were exchanged for all previously outstanding Series B Preferred Units immediately prior to closing.

We issued 41 million shares of common stock, with a fair value of $4.0 billion.

There are no remaining Series B Preferred Units outstanding.

17, 2024, EnLink redeemed all outstanding Series C Preferred Units at $1,000 per Series C Preferred Unit, plus $8.28 per Series C Preferred Unit of unpaid distributions, for $365 million with proceeds received from borrowings under the EnLink Revolving Credit Facility.

2024, there are no remaining Series C Preferred Units outstanding.

Share Repurchase Program - In January 2024, our Board of Directors authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock.

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

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

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

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

17, 2025, we have repurchased 1.675 million shares for $172 million under the program with cash on hand.

The program will terminate upon completion of the repurchase of $2.0 billion of common stock or on Jan.

1, 2029, whichever occurs first.

Material Commitments - We have material cash commitments related to our capital expenditures, senior notes and corresponding interest payments, which we expect to fund through our sources of cash inflows discussed above.

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Our capital expenditures are financed typically through operating cash flows and short- and long-term debt.

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The following table sets forth our capital expenditures, excluding AFUDC, for the periods indicated:

Capital Expenditures 2023 2022 2021

The following table sets forth our capital expenditures, excluding the equity portion of AFUDC, for the periods indicated:

Capital Expenditures 2024 (a)

( Millions of dollars )

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Natural Gas Pipelines 258 228 123

Refined Products and Crude (a)

Refined Products and Crude (b)

Other 68 49 53

Total capital expenditures $ 2,021 $ 1,595 $ 1,202

(a) - Includes capital expenditures for the period September 25, 2023, through December 31, 2023.

Capital expenditures increased in 2023, compared with 2022, due primarily to our capital projects, including our MB-6 fractionator, NGL pipeline expansion projects and the Viking compression project.

(a) - Includes capital expenditures for EnLink and Medallion for the period Oct.

15, 2024, and Nov.

1, 2024, through Dec.

31, 2024, respectively.

(b) - The year ended Dec.

31, 2023, includes capital expenditures for the period Sept.

25, 2023, through Dec.

Capital expenditures increased in 2024, compared with 2023, due primarily to our capital projects, including our MB-6 fractionator and the NGL and Refined Products and Crude pipeline expansion projects.

See discussion of our announced capital projects in the “Recent Developments” section.

We expect total capital expenditures, excluding AFUDC and capitalized interest, of $2.8 - $3.2 billion in 2025.

Credit Ratings - Our long-term debt credit ratings as of February 20, 2024, are shown in the table below:

Credit Ratings - Our long-term debt credit ratings as of Feb.

17, 2025, are shown in the table below:

Rating Agency Long-Term Rating Short-Term Rating Outlook

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Our credit ratings, which are investment grade, may be affected by our leverage, liquidity, credit profile or potential transactions.

In April 2023, Moody’s upgraded the rating on our long-term debt to Baa2 from Baa3, the rating on our short-term debt to Prime-2 from Prime-3 and changed the outlook to stable from positive.

The most common criteria for assessment of our credit ratings are the debt-to-EBITDA ratio, interest coverage, business risk profile and liquidity.

If our credit ratings were downgraded, our cost to borrow funds under our $2.5 Billion Credit Agreement could increase and a potential loss of access to the commercial paper market could occur.

If our credit ratings were downgraded, our cost to borrow funds under our $3.5 Billion Credit Agreement would increase, and a potential loss of access to the commercial paper market could occur.

In the event that we are unable to borrow funds under our commercial paper program and there has not been a material adverse change in our business, we would continue to have access to our $3.5 Billion Credit Agreement, which expires in 2030.

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In February 2025, we paid a quarterly common stock dividend of $1.03 per share ($4.12 per share on an annualized basis), an increase of 4% compared with the same quarter in the prior year.

Our Series E Preferred Stock pays quarterly dividends on each share of Series E Preferred Stock, when, as and if declared by our Board of Directors, at a rate of 5.5% per year.

In 2023, we paid dividends for the Series E Preferred Stock of $1 million for the series E preferred stock.

In February 2024, we paid quarterly dividends totaling $0.3 million for the Series E Preferred Stock.

For the year ended December 31, 2023, our cash flows from operations exceeded dividends paid by $2.6 billion, due in part to the insurance proceeds received from the Medford settlement in 2023.

For the year ended Dec.

31, 2024, our cash flows from operations exceeded dividends paid by $2.6 billion.

We expect our cash flows from operations to continue to sufficiently fund our cash dividends.

To the extent operating cash flows are not sufficient to fund our dividends, we may utilize cash on hand from other sources of short- and long-term liquidity to fund a portion of our dividends.

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CASH FLOW ANALYSIS

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Under this method, we reconcile net income to cash flows provided by operating activities by adjusting net income for those items that affect net income but do not result in actual cash receipts or payments during the period and for operating cash items that do not impact net income.

These reconciling items can include depreciation and amortization, deferred income taxes, impairment charges, allowance for equity funds used during construction, gain or loss on sale of assets, net undistributed earnings from equity-method investments, share-based compensation expense, other amounts and changes in our assets and liabilities not classified as investing or financing activities.

These reconciling items can include depreciation and amortization, deferred income taxes, impairment charges, allowance for equity funds used during construction, gain or loss on sale of business and assets, net undistributed earnings from equity-method investments, share-based compensation expense, other amounts and changes in our assets and liabilities not classified as investing or financing activities.

The following table sets forth the changes in cash flows by operating, investing and financing activities for the periods indicated:

Years Ended December 31,

Years Ended Dec.

2024 2023 2022

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Our operating cash flows can also be impacted by changes in our inventory balances, which are driven primarily by commodity prices, supply, demand and the operation of our assets.

2022 - Cash flows from operating activities, before changes in operating assets and liabilities increased $1.1 billion for the year ended December 31, 2023, compared with the same period in 2022, due primarily to higher operating income resulting from higher volumes from increased production and higher average fee rates in our Natural Gas Gathering and Processing segment, higher exchange services in our Natural Gas Liquids segment, higher transportation and storage services in our Natural Gas Pipelines segment and an increase due to the impact of the Magellan Acquisition in our Refined Products and Crude segment;

and insurance proceeds received from the Medford settlement.

Please see “Financial Results and Operating Information” for a discussion of operating results.

The changes in operating assets and liabilities increased operating cash flows $358 million for the year ended December 31, 2023, compared with a decrease of $58 million for the same period in 2022.

This change is due primarily to changes in accounts receivable resulting from the timing of receipt of cash from counterparties and from inventory, both of which vary from period to period, and with changes in commodity prices;

offset partially by changes in risk management assets and liabilities.

2023 - Cash flows from operating activities, before changes in operating assets and liabilities increased $868 million for the year ended Dec.

31, 2024, compared with the same period in 2023, due primarily to the impact of the Magellan Acquisition in our Refined Products and Crude segment, as discussed in “Financial Results and Operating Information” offset partially by insurance proceeds received from the Medford settlement in 2023.

The changes in operating assets and liabilities decreased operating cash flows $43 million for the year ended Dec.

31, 2024, compared with an increase of $358 million for the same period in 2023.

This change is due primarily to changes in our legal reserve liability as discussed in Note P of the Notes to Consolidated Financial Statements in this Annual Report, changes in risk management assets and liabilities and changes in accounts receivable resulting from the receipts of cash from counterparties and from inventory, both of which varies from period to period, and with changes in commodity prices.

These changes were offset partially by changes in accounts payable, which vary from period to period with changes in commodity prices and from the timing of payments to vendors, suppliers and other third parties.

Investing Cash Flows

2022 - Cash used in investing activities for the year ended December 31, 2023, increased $5.3 billion, compared with the same period in 2022, due primarily to the $5.0 billion of cash paid for the Magellan Acquisition.

2023 - Cash used in investing activities for the year ended Dec.

31, 2024, increased $208 million, compared with the same period in 2023, due primarily to cash paid to acquire EnLink and Medallion, capital expenditures related to our capital projects in 2024 and insurance proceeds received from the Medford settlement in 2023, offset partially by proceeds received from the interstate natural gas pipeline divestiture.

Financing Cash Flows

2022 - Cash from financing activities for the year ended December 31, 2023, increased $3.8 billion compared with the same period in 2022, due primarily to the issuance of $5.25 billion senior unsecured notes associated with the Magellan Acquisition.

Cash Flow Analysis for the Year Ended December 31, 2022 vs.

2021 - The cash flow analysis for the year ended December 31, 2022, compared with the year ended December 31, 2021, is included in Part II, Item 7, Management’s

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Discussion and Analysis of Financial Condition and Results of Operations of our 2022 Annual Report on Form 10-K, which is available via the SEC’s website at www.sec.gov and our website at www.oneok.com.

2023 - Cash provided by financing activities for the year ended Dec.

31, 2024, increased $18 million compared with the same period in 2023, due primarily to the increase in issuance of senior unsecured notes associated with acquisitions, offset by increased repayments of long-term debt in 2024, including the repayment of the Viking and Guardian Term Loan Agreements and the outstanding borrowings on the EnLink Revolving Credit facility and the EnLink AR Facility, increased dividends paid in 2024 and the repurchase of EnLink’s Series C Preferred Units.

Cash Flow Analysis for the Year Ended Dec.

2022 - The cash flow analysis for the year ended Dec.

31, 2023, compared with the year ended Dec.

31, 2022, is included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Annual Report on Form 10-K, which is available via the SEC’s website at www.sec.gov and our website at www.oneok.com.

IMPACT OF NEW ACCOUNTING STANDARDS

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In order to estimate the fair value of assets acquired and liabilities assumed, we utilized widely accepted valuation techniques that included discounted cash flow and cost methods.

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

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

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

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

While we believe we have made reasonable assumptions to estimate the fair value, these assumptions are inherently uncertain.

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The purchase price allocation recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available.

See Note B of the Notes to Consolidated Financial Statements in this Annual Report for additional discussion of the business combination.

See Note B of the Notes to Consolidated Financial Statements in this Annual Report for additional discussion of business combinations.

Derivatives and Risk-management Activities - We utilize derivatives to reduce our market-risk exposure to commodity price and interest-rate fluctuations and to achieve more predictable cash flows.

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We assess hedging relationships at the inception of the hedge and periodically thereafter, to determine whether the hedging relationship is, and is expected to remain, highly effective.

We do not believe that changes in our fair value estimates of our derivative instruments have a material impact on our results of operations, as the majority of our derivatives are accounted for as effective cash flow hedges.

However, if a derivative instrument is ineligible for cash flow hedge accounting or if we fail to appropriately designate it as a cash flow hedge, changes in fair value of the derivative instrument would be recorded currently

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We do not believe that changes in our fair value estimates of our derivative instruments have a material impact on our results of operations, as the majority of our derivatives are accounted for

as effective cash flow hedges.

Additionally, if a cash flow hedge ceases to qualify for hedge accounting treatment because it is no longer probable that the forecasted transaction will occur, the change in fair value of the derivative instrument would be recognized in earnings.

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Impairment of Goodwill, Long-Lived Assets, Including Intangible Assets and Equity Method Investments - We assess our goodwill for impairment at least annually as of July 1, unless events or changes in circumstances indicate an impairment may have occurred before that time.

As part of our goodwill impairment test, we may first assess qualitative factors (including macroeconomic conditions, industry and market considerations, cost factors and overall financial performance) to determine whether it is more likely than not that the fair value of each of our reporting units with goodwill was less than its carrying amount.

If further testing is necessary, or a quantitative test is elected, we perform a Step 1 analysis for goodwill impairment.

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If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

We assess our long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable.

An impairment is indicated if the carrying amount of a long-lived asset exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset.

If an impairment is indicated, we record an impairment loss equal to the difference between the carrying value and the fair value of the long-lived asset.

We assess our long-lived asset groups, including intangible assets, for impairment whenever events or changes in circumstances indicate that an asset group’s carrying amount may not be recoverable.

An impairment is indicated if the carrying amount of a long-lived asset group exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset group.

If an impairment is indicated, we record an impairment loss equal to the difference between the carrying value and the fair value of the long-lived asset group.

We evaluate equity method investments in unconsolidated affiliates for impairment whenever events or circumstances indicate that there is an other-than-temporary loss in value of the investment.

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If actual results are not consistent with our assumptions and estimates or our assumptions and estimates change due to new information, we may be exposed to future impairment charges.

See Notes A, F, G and N of the Notes to Consolidated Financial Statements in this Annual Report for additional discussion of goodwill and intangible assets, long-lived assets and investments in unconsolidated affiliates.

See Notes A, F, G and O of the Notes to Consolidated Financial Statements in this Annual Report for additional discussion of goodwill and intangible assets, long-lived assets and investments in unconsolidated affiliates.

Depreciation Methods and Estimated Useful Lives of Property, Plant and Equipment - Our property, plant and equipment are depreciated using the straight-line method that incorporates management assumptions regarding useful economic lives and residual values.

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Examples of such circumstances include changes in (i) competition, (ii) laws and regulations that limit the estimated economic life of an asset, (iii) technology that render an asset obsolete, (iv) expected salvage values, (v) results of rate cases or rate settlements on regulated assets and (vi) forecasts of the remaining economic life for the resource basins where our assets are located, if any.

For the fiscal years presented in this Form 10-K, no changes were made to the determinations of useful lives that would have a material effect on the timing of depreciation expense in future periods.

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For the fiscal years presented in this Form 10-K, no

changes were made to the determinations of useful lives that would have a material effect on the timing of depreciation expense in future periods.

See Note F of the Notes to Consolidated Financial Statements in this Annual Report for additional discussion of property, plant and equipment.

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 7. Management’s Discussion and Analysis