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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2022.

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________.

Commission file number   001-13643

ONEOK, Inc.

(Exact name of registrant as specified in its charter)

Oklahoma	73-1520922
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 West Fifth Street,	Tulsa,	OK	74103
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code   (918) 588-7000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value of $0.01	OKE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒  Accelerated filer ☐  Non-accelerated filer ☐  Smaller reporting company ☐   Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On October 24, 2022, the Company had 446,953,842 shares of common stock outstanding.

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ONEOK, Inc.

TABLE OF CONTENTS

Part I.	Financial Information	Page No.
Item 1.	Financial Statements (Unaudited)	6
	Consolidated Statements of Income - Three and Nine Months Ended September 30, 2022 and 2021	6
	Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2022 and 2021	7
	Consolidated Balance Sheets - September 30, 2022, and December 31, 2021	8
	Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2022 and 2021	11
	Consolidated Statements of Changes in Equity - Three and Nine Months Ended September 30, 2022 and 2021	12
	Notes to Consolidated Financial Statements	16
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	50
Part II.	Other Information	50
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	51
Signature		53

As used in this Quarterly Report, references to “we,” “our” or “us” refer to ONEOK, Inc., an Oklahoma corporation, and its predecessors and subsidiaries, unless the context indicates otherwise.

The statements in this Quarterly Report that are not historical information, including statements concerning plans and objectives of management for future operations, economic performance or related assumptions, are forward-looking statements. Forward-looking statements may include words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “target,” “guidance,” “intend,” “may,” “might,” “outlook,” “plan,” “potential,” “project,” “scheduled,” “should,” “will,” “would” and other words and terms of similar meaning. Although we believe that our expectations regarding future events are based on reasonable assumptions, we can give no assurance that such expectations or assumptions will be achieved. Important factors that could cause actual results to differ materially from those in the forward-looking statements are described under Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations “Forward-Looking Statements,” and Part II, Item 1A, “Risk Factors,” in this Quarterly Report and under Part I, Item 1A, “Risk Factors,” in our Annual Report.

INFORMATION AVAILABLE ON OUR WEBSITE

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 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. Information contained on our website, posted on our social media accounts, and any corresponding applications, are not incorporated by reference into this report.

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GLOSSARY

The abbreviations, acronyms and industry terminology used in this Quarterly Report are defined as follows:

$2.5 Billion Credit Agreement	ONEOK’s $2.5 billion revolving credit agreement, as amended and restated
AFUDC	Allowance for funds used during construction
Annual Report	Annual Report on Form 10-K for the year ended December 31, 2021
ASU	Accounting Standards Update
Bbl	Barrels, 1 barrel is equivalent to 42 United States gallons
BBtu/d	Billion British thermal units per day
Bcf	Billion cubic feet
Btu	British thermal unit
CFTC	U.S. Commodity Futures Trading Commission
Clean Air Act	Federal Clean Air Act, as amended
COVID-19	Coronavirus disease 2019, including variants thereof
DJ	Denver-Julesburg
EBITDA	Earnings before interest expense, income taxes, depreciation and amortization
EPA	United States Environmental Protection Agency
EPS	Earnings per share of common stock
ESG	Environmental, social and governance
Exchange Act	Securities Exchange Act of 1934, as amended
FERC	Federal Energy Regulatory Commission
Fitch	Fitch Ratings, Inc.
GAAP	Accounting principles generally accepted in the United States of America
Guardian Pipeline	Guardian Pipeline, L.L.C., a wholly owned subsidiary of ONEOK, Inc.
Guardian Term Loan Agreement	Guardian Pipeline’s senior unsecured three-year $120 million term loan agreement dated June 24, 2022
GHG	Greenhouse gas
Homeland Security	United States Department of Homeland Security
ICE	Intercontinental Exchange
Intermediate Partnership	ONEOK Partners Intermediate Limited Partnership, a wholly owned subsidiary of ONEOK Partners, L.P.
LIBOR	London Interbank Offered Rate
MBbl/d	Thousand barrels per day
MDth/d	Thousand dekatherms per day
MMBbl	Million barrels
MMBbl/d	Million barrels per day
MMBtu	Million British thermal units
MMcf/d	Million cubic feet per day
Moody’s	Moody’s Investors Service, Inc.
NGL(s)	Natural gas liquid(s)
NGL products	Marketable natural gas liquid purity products, such as ethane, ethane/propane mix, propane, iso-butane, normal butane and natural gasoline
Northern Border Pipeline	Northern Border Pipeline Company, a 50% owned joint venture
NYMEX	New York Mercantile Exchange
ONEOK	ONEOK, Inc.
ONEOK Partners	ONEOK Partners, L.P., a wholly owned subsidiary of ONEOK, Inc.
OPIS	Oil Price Information Service
Overland Pass Pipeline	Overland Pass Pipeline Company, LLC, a 50% owned joint venture
PHMSA	United States Department of Transportation Pipeline and Hazardous Materials Safety Administration
POP	Percent of Proceeds
Quarterly Report(s)	Quarterly Report(s) on Form 10-Q
Roadrunner	Roadrunner Gas Transmission, LLC, a 50% owned joint venture
S&P	S&P Global Ratings
SCOOP	South Central Oklahoma Oil Province, an area in the Anadarko Basin in Oklahoma
SEC	Securities and Exchange Commission

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Series E Preferred Stock	Series E Non-Voting, Perpetual Preferred Stock, par value $0.01 per share
SOFR	Secured Overnight Financing Rate
STACK	Sooner Trend Anadarko Canadian Kingfisher, an area in the Anadarko Basin in Oklahoma
Term SOFR	The forward-looking term rate based on SOFR
Viking	Viking Gas Transmission Company, a wholly owned subsidiary of ONEOK, Inc.
WTI	West Texas Intermediate
XBRL	eXtensible Business Reporting Language

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Unaudited)	2022		2021		2022		2021
	(Thousands of dollars, except per share amounts)
Revenues
Commodity sales	$	5,563,535	$	4,204,792	$	16,319,549	$	10,115,674
Services	349,996		331,383		1,035,312		1,004,144
Total revenues (Note J)	5,913,531		4,536,175		17,354,861		11,119,818
Cost of sales and fuel (exclusive of items shown separately below)	4,772,674		3,449,127		14,016,621		7,937,616
Operations and maintenance	238,414		225,364		683,507		644,841
Depreciation and amortization	157,102		154,542		468,717		468,583
General taxes	47,770		39,753		144,058		126,132
Other operating (income) expense, net	(1,630)		(470)		(8,649)		(1,446)
Operating income	699,201		667,859		2,050,607		1,944,092
Equity in net earnings from investments (Note H)	39,180		28,573		111,150		87,613
Allowance for equity funds used during construction	734		247		1,699		1,485
Other income (expense), net	(8,296)		1,287		(31,142)		(4,228)
Interest expense (net of capitalized interest of $16,288, $6,083, $41,527 and $16,621, respectively)	(166,939)		(184,049)		(509,744)		(554,529)
Income before income taxes	563,880		513,917		1,622,570		1,474,433
Income taxes	(132,129)		(121,899)		(385,270)		(354,100)
Net income	431,751		392,018		1,237,300		1,120,333
Less: Preferred stock dividends	275		275		825		825
Net income available to common shareholders	$	431,476	$	391,743	$	1,236,475	$	1,119,508
Basic EPS (Note G)	$	0.96	$	0.88	$	2.76	$	2.51
Diluted EPS (Note G)	$	0.96	$	0.88	$	2.76	$	2.50
Average shares (thousands)
Basic	447,677		446,634		447,417		446,288
Diluted	448,217		447,635		448,268		447,117

See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Unaudited)	2022		2021		2022		2021
	(Thousands of dollars)
Net income	$	431,751	$	392,018	$	1,237,300	$	1,120,333
Other comprehensive income (loss), net of tax
Change in fair value of derivatives, net of tax of $(31,749), $39,299, $(16,951) and $81,134, respectively	106,289		(131,566)		56,747		(271,622)
Derivative amounts reclassified to net income, net of tax of $(16,116), $(19,845), $(56,876) and $(42,722), respectively	53,953		66,438		190,411		143,029
Change in retirement and other postretirement benefit plan obligations, net of tax of $(873), $(1,355), $(2,651) and $(4,009), respectively	2,922		4,538		8,874		13,423
Other comprehensive income of unconsolidated affiliates, net of tax of $(1,230), $(60), $(4,733) and $(1,429), respectively	4,118		197		15,846		4,783
Total other comprehensive income (loss), net of tax	167,282		(60,393)		271,878		(110,387)
Comprehensive income	$	599,033	$	331,625	$	1,509,178	$	1,009,946

See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
		September 30,		December 31,
(Unaudited)		2022		2021
Assets	(Thousands of dollars)
Current assets
Cash and cash equivalents		$	22,215	$	146,391
Accounts receivable, net		1,729,192		1,441,786
Materials and supplies		155,158		153,019
NGLs and natural gas in storage		538,018		427,880
Commodity imbalances		39,526		39,609
Other current assets		281,213		165,689
Total current assets		2,765,322		2,374,374
Property, plant and equipment
Property, plant and equipment		24,727,153		23,820,539
Accumulated depreciation and amortization		4,937,352		4,500,665
Net property, plant and equipment		19,789,801		19,319,874
Investments and other assets
Investments in unconsolidated affiliates		803,807		797,613
Goodwill and net intangible assets		755,474		763,295
Other assets		324,839		366,457
Total investments and other assets		1,884,120		1,927,365
Total assets		$	24,439,243	$	23,621,613

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Continued)
		September 30,		December 31,
(Unaudited)		2022		2021
Liabilities and equity	(Thousands of dollars)
Current liabilities
Current maturities of long-term debt (Note D)		$	925,000	$	895,814
Short-term borrowings (Note D)		901,277		—
Accounts payable		1,658,904		1,332,391
Commodity imbalances		254,076		309,054
Accrued interest		120,424		235,602
Operating lease liability		12,417		13,783
Other current liabilities		266,540		397,975
Total current liabilities		4,138,638		3,184,619
Long-term debt, excluding current maturities (Note D)		11,950,660		12,747,636
Deferred credits and other liabilities
Deferred income taxes		1,592,697		1,166,690
Operating lease liability		69,676		75,636
Other deferred credits		375,303		431,869
Total deferred credits and other liabilities		2,037,676		1,674,195
Commitments and contingencies (Note I)
Equity (Note E)
ONEOK shareholders’ equity:
Preferred stock, $0.01 par value: authorized and issued 20,000 shares at September 30, 2022, and December 31, 2021		—		—
Common stock, $0.01 par value: authorized 1,200,000,000 shares; issued 474,916,234 shares and outstanding 446,947,691 shares at September 30, 2022; issued 474,916,234 shares and outstanding 446,138,177 shares at December 31, 2021		4,749		4,749
Paid-in capital		7,218,495		7,213,861
Accumulated other comprehensive loss (Note F)		(199,473)		(471,351)
Retained earnings		—		—
Treasury stock, at cost: 27,968,543 shares at September 30, 2022, and 28,778,057 shares at December 31, 2021		(711,502)		(732,096)
Total equity		6,312,269		6,015,163
Total liabilities and equity		$	24,439,243	$	23,621,613

See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
	Nine Months Ended
	September 30,
(Unaudited)	2022		2021
	(Thousands of dollars)
Operating activities
Net income	$	1,237,300	$	1,120,333
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	468,717		468,583
Equity in net earnings from investments	(111,150)		(87,613)
Distributions received from unconsolidated affiliates	109,655		88,389
Deferred income taxes	344,812		344,808
Other, net	45,914		57,479
Changes in assets and liabilities:
Accounts receivable	(260,213)		(687,031)
NGLs and natural gas in storage, net of commodity imbalances	(165,033)		(280,839)
Accounts payable	296,510		756,072
Risk-management assets and liabilities	47,009		(254,163)
Other assets and liabilities, net	(148,015)		(34,856)
Cash provided by operating activities	1,865,506		1,491,162
Investing activities
Capital expenditures (less allowance for equity funds used during construction)	(886,041)		(490,329)
Distributions received from unconsolidated affiliates in excess of cumulative earnings	18,014		19,188
Other, net	4,171		(4,286)
Cash used in investing activities	(863,856)		(475,427)
Financing activities
Dividends paid	(1,253,402)		(1,250,204)
Short-term borrowings, net	901,277		—
Issuance of long-term debt	120,000		—
Repayment of long-term debt	(895,814)		(68,787)
Other, net	2,113		3,097
Cash used in financing activities	(1,125,826)		(1,315,894)
Change in cash and cash equivalents	(124,176)		(300,159)
Cash and cash equivalents at beginning of period	146,391		524,496
Cash and cash equivalents at end of period	$	22,215	$	224,337

See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)	Preferred Stock Issued	Common Stock Issued	Preferred Stock		Common Stock		Paid-in Capital
	(Shares)		(Thousands of dollars)
January 1, 2022	20,000	474,916,234	$	—	$	4,749	$	7,213,861
Net income	—	—	—		—		—
Other comprehensive income (Note F)	—	—	—		—		—
Preferred stock dividends - $13.75 per share (Note E)	—	—	—		—		—
Common stock issued	—	—	—		—		(5,325)
Common stock dividends - $0.935 per share (Note E)	—	—	—		—		(26,264)
Other, net	—	—	—		—		(5,289)
March 31, 2022	20,000	474,916,234	$	—	$	4,749	$	7,176,983
Net income	—	—	—		—		—
Other comprehensive income (Note F)	—	—	—		—		—
Preferred stock dividends - $13.75 per share (Note E)	—	—	—		—		—
Common stock issued	—	—	—		—		7,039
Common stock dividends - $0.935 per share (Note E)	—	—	—		—		(3,553)
Other, net	—	—	—		—		9,988
June 30, 2022	20,000	474,916,234	$	—	$	4,749	$	7,190,457
Net income	—	—	—		—		—
Other comprehensive income (Note F)	—	—	—		—		—
Preferred stock dividends - $13.75 per share (Note E)	—	—	—		—		—
Common stock issued	—	—	—		—		3,701
Common stock dividends - $0.935 per share (Note E)	—	—	—		—		13,555
Other, net	—	—	—		—		10,782
September 30, 2022	20,000	474,916,234	$	—	$	4,749	$	7,218,495

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Unaudited)	Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total Equity
	(Thousands of dollars)
January 1, 2022	$	(471,351)	$	—	$	(732,096)	$	6,015,163
Net income	—		391,171		—		391,171
Other comprehensive income (Note F)	3,679		—		—		3,679
Preferred stock dividends - $13.75 per share (Note E)	—		(275)		—		(275)
Common stock issued	—		—		11,730		6,405
Common stock dividends - $0.935 per share (Note E)	—		(390,896)		—		(417,160)
Other, net	—		—		—		(5,289)
March 31, 2022	$	(467,672)	$	—	$	(720,366)	$	5,993,694
Net income	—		414,378		—		414,378
Other comprehensive income (Note F)	100,917		—		—		100,917
Preferred stock dividends - $13.75 per share (Note E)	—		(275)		—		(275)
Common stock issued	—		—		6,544		13,583
Common stock dividends - $0.935 per share (Note E)	—		(414,103)		—		(417,656)
Other, net	—		—		—		9,988
June 30, 2022	$	(366,755)	$	—	$	(713,822)	$	6,114,629
Net income	—		431,751		—		431,751
Other comprehensive income (Note F)	167,282		—		—		167,282
Preferred stock dividends - $13.75 per share (Note E)	—		(275)		—		(275)
Common stock issued	—		—		2,320		6,021
Common stock dividends - $0.935 per share (Note E)	—		(431,476)		—		(417,921)
Other, net	—		—		—		10,782
September 30, 2022	$	(199,473)	$	—	$	(711,502)	$	6,312,269

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Unaudited)	Preferred Stock Issued	Common Stock Issued	Preferred Stock		Common Stock		Paid-in Capital
	(Shares)		(Thousands of dollars)
January 1, 2021	20,000	474,916,234	$	—	$	4,749	$	7,353,396
Net income	—	—	—		—		—
Other comprehensive income	—	—	—		—		—
Preferred stock dividends - $13.75 per share	—	—	—		—		—
Common stock issued	—	—	—		—		(10,159)
Common stock dividends - $0.935 per share	—	—	—		—		(30,234)
Other, net	—	—	—		—		(7,729)
March 31, 2021	20,000	474,916,234	$	—	$	4,749	$	7,305,274
Net income	—	—	—		—		—
Other comprehensive loss	—	—	—		—		—
Preferred stock dividends - $13.75 per share	—	—	—		—		—
Common stock issued	—	—	—		—		7,115
Common stock dividends - $0.935 per share	—	—	—		—		(74,765)
Other, net	—	—	—		—		9,710
June 30, 2021	20,000	474,916,234	$	—	$	4,749	$	7,247,334
Net income	—	—	—		—		—
Other comprehensive loss	—	—	—		—		—
Preferred stock dividends - $13.75 per share	—	—	—		—		—
Common stock issued	—	—	—		—		3,237
Common stock dividends - $0.935 per share	—	—	—		—		(25,204)
Other, net	—	—	—		—