ITEM 3. LEGAL PROCEEDINGSInformation about our legal proceedings is included in Note N of the Notes to Consolidated Financial Statements in this Annual Report.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.PART IIITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESOur common stock is listed on the NYSE under the trading symbol "OKE." The corporate name ONEOK is used in newspaper stock listings.At February 22, 2022, there were 13,198 holders of record of our 446,213,285 outstanding shares of common stock.For information regarding our Employee Stock Award Program and other equity compensation plans, see Note J of the Notes to Consolidated Financial Statements and "Equity Compensation Plan Information" included in Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, in this Annual Report. 35Table of ContentsPERFORMANCE GRAPHThe following performance graph compares the performance of our common stock with the S&P 500 Index, the Alerian Midstream Energy Select Index and a ONEOK Peer Group during the period beginning on December 31, 2016, and ending on December 31, 2021. Value of a $100 Investment, Assuming Reinvestment of Distributions/Dividends,at December 31, 2016, and at the End of Every Year Through December 31, 2021. Cumulative Total Return Years Ended December 31, 20172018201920202021ONEOK, Inc.$97.92 $104.07 $153.80 $87.11 $143.59 S&P 500 Index$121.83 $116.49 $153.17 $181.35 $233.41 ONEOK Peer Group (a)$93.45 $77.86 $87.11 $64.37 $91.97 Alerian Midstream Energy Select Index (b)$100.76 $82.95 $101.49 $77.72 $109.39 (a) - The ONEOK Peer Group is composed of the following companies: DCP Midstream, LP; Energy Transfer LP; EnLink Midstream, LLC; Enterprise Products Partners L.P.; Kinder Morgan, Inc.; Magellan Midstream Partners, L.P.; MPLX LP; NuStar Energy L.P.; Plains All American Pipeline, L.P.; Targa Resources Corp.; and The Williams Companies, Inc.(b) - The Alerian Midstream Energy Select Index measures the composite performance of approximately 33 North American energy infrastructure companies who are engaged in midstream activities involving energy commodities.ITEM 6. [RESERVED]36Table of ContentsITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis should be read in conjunction with Part I, Item 1, Business, our audited Consolidated Financial Statements and the Notes to Consolidated Financial Statements in this Annual Report.RECENT DEVELOPMENTSPlease 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.Market Conditions - We experienced earnings growth from increased volumes in 2021, compared with 2020, due primarily to increased producer activity and rising gas-to-oil ratios in the Rocky Mountain region, production curtailments in 2020, increased ethane production in the Rocky Mountain region and higher commodity prices in both our Natural Gas Gathering and Processing and Natural Gas Liquids segments, highlighting both the resiliency of our integrated assets and the economic recovery from the pandemic.Ethane Production - Price differentials between ethane and natural gas can cause natural gas processors to extract 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 period to period. Ethane volumes under long-term contracts delivered to our NGL system increased approximately 55 MBbl/d to an average of 430 MBbl/d in 2021, compared with 375 MBbl/d in 2020, due primarily to changes in ethane extraction economics. We estimate that there are more than 225 MBbl/d of discretionary ethane, consisting of more than 125 MBbl/d in the Rocky Mountain region and approximately 100 MBbl/d in the Mid-Continent region, that can be recovered and transported on our system. Ethane recovery opportunities will fluctuate based on regional natural gas pricing and ethane economics.Growth Projects - We operate an integrated, reliable and diversified network of NGL and natural gas gathering, processing, fractionation, storage and transportation assets connecting supply in the Rocky Mountain, Mid-Continent and Permian regions with key market centers. Our publicly announced capital-growth projects are outlined in the table below:ProjectScopeApproximateCosts (a)CompletionNatural Gas Gathering and Processing(In millions)Bear Creek plant expansion and related infrastructure200 MMcf/d processing plant expansion and related gathering infrastructure in the Williston Basin$405CompletedSupported by acreage dedications with long-term primarily fee-based contractsDemicks Lake III plant200 MMcf/d processing plant in the core of the Williston Basin$188 (b)First Quarter 2023Supported by acreage dedications with primarily fee-based contracts Natural Gas LiquidsArbuckle II pipeline expansionIncreased mainline capacity with additional pump facilities$60CompletedIncreased capacity to 500 MBbl/dMB-5 fractionator125 MBbl/d NGL fractionator in Mont Belvieu, Texas$750 (c)Third Quarter 2023(a) - Excludes capitalized interest/AFUDC.(b) - In November 2021, we announced that we restarted construction of the Demicks Lake III natural gas processing plant. Upon announcement, the expected cost to complete was approximately $140 million.(c) - In November 2021, we announced that we restarted construction of the MB-5 NGL fractionator. Upon announcement, the expected cost to complete was approximately $250 million.Debt Repayments - In November 2021, we redeemed the remaining $536.1 million of our $700 million, 4.25% senior notes due February 2022 at 100% of the principal amount, plus accrued and unpaid interest, with cash on hand and short-term borrowings.In June 2021, we repaid the remaining $11.7 million of Guardian Pipeline's senior notes due December 2022 with cash on hand. 37Table of ContentsIn 2021, we repurchased in the open market outstanding principal of certain of our senior notes in the amount of $55.2 million for an aggregate repurchase price of $54.6 million with cash on hand.Dividends - During 2021, we paid common stock dividends totaling $3.74 per share, which is consistent with the prior year. In February 2022, we paid a quarterly common stock dividend of $0.935 per share ($3.74 per share on an annualized basis), which is consistent with the same quarter in the prior year. FINANCIAL RESULTS AND OPERATING INFORMATIONHow We Evaluate Our OperationsManagement uses a variety of financial and operating metrics to analyze our performance. Our consolidated financial metrics include: (1) operating income; (2) net income; (3) diluted EPS; and (4) adjusted EBITDA. We evaluate segment operating results using adjusted EBITDA and our operating metrics, which include various volume and rate statistics that are relevant for the respective segment. These operating metrics allow investors to analyze the various components of segment financial results in terms of volumes and rate/price. Management uses these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results. For additional information on our operating metrics, see the respective segment subsections of this "Financial Results and Operating Information" section.Non-GAAP Financial Measures - Adjusted EBITDA is a non-GAAP measure of our financial performance. Adjusted EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, noncash impairment charges, income taxes, allowance for equity funds used during construction, noncash compensation expense and certain other noncash items. We believe this non-GAAP financial measure is useful to investors because it and similar measures are used by many companies in our industry as a measurement of financial performance and is commonly employed by financial analysts and others to evaluate our financial performance and to compare financial performance among companies in our industry. Adjusted EBITDA should not be considered an alternative to net income, EPS or any other measure of financial performance presented in accordance with GAAP. Additionally, this calculation may not be comparable with similarly titled measures of other companies.Consolidated OperationsSelected Financial Results - The following table sets forth certain selected consolidated financial results for the periods indicated: Years Ended December 31,2021 vs. 20202020 vs. 2019Financial Results202120202019$ Increase (Decrease) (Millions of dollars, except per share amounts)RevenuesCommodity sales$15,180.3 $7,255.2 $8,916.1 7,925.1 (1,660.9)Services1,360.0 1,287.0 1,248.3 73.0 38.7 Total revenues16,540.3 8,542.2 10,164.4 7,998.1 (1,622.2)Cost of sales and fuel (exclusive of items shown separately below)12,256.7 5,110.1 6,788.0 7,146.6 (1,677.9)Operating costs1,067.0 886.1 982.9 180.9 (96.8)Depreciation and amortization621.7 578.7 476.5 43.0 102.2 Impairment charges- 607.2 - (607.2)607.2 (Gain) loss on sale of assets(1.4)(1.3)2.6 0.1 3.9 Operating income$2,596.3 $1,361.4 $1,914.4 1,234.9 (553.0)Equity in net earnings from investments$122.5 $143.2 $154.5 (20.7)(11.3)Impairment of equity investments$- $(37.7)$- (37.7)37.7 Interest expense, net of capitalized interest$(732.9)$(712.9)$(491.8)20.0 221.1 Net income$1,499.7 $612.8 $1,278.6 886.9 (665.8)Diluted EPS$3.35 $1.42 $3.07 1.93 (1.65)Adjusted EBITDA$3,379.7 $2,723.7 $2,580.2 656.0 143.5 Capital expenditures$696.9 $2,195.4 $3,848.3 (1,498.5)(1,652.9)See reconciliation of net income to adjusted EBITDA in the "Non-GAAP Financial Measures" section.38Table of ContentsChanges 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. 2021 vs. 2020 - Operating income increased $1.2 billion primarily as a result of the following:•an increase of $607.2 million due to noncash impairment charges in our Natural Gas Gathering and Processing and Natural Gas Liquids segments in 2020;•Natural Gas Liquids - increases of $421.4 million in exchange services related primarily to higher volumes in the Rocky Mountain region, the Mid-Continent region and Permian Basin and wider commodity price differentials, and $98.3 million in optimization and marketing. These increases were offset partially by a decrease of $46.2 million from the impact of Winter Storm Uri in exchange services;•Natural Gas Gathering and Processing - increases of $143.5 million due primarily to lower realized prices in 2020 impacting our fee with POP contracts and $115.8 million from higher volumes due primarily to increased production and rising gas-to-oil ratios in the Rocky Mountain region in 2021 and production curtailments in 2020; and•Natural Gas Pipelines - an increase of $109.1 million due to primarily to increased natural gas sales; offset by •an increase of $180.9 million in consolidated operating costs due primarily to higher employee costs related to short-term incentives, property taxes, outside services and the impact of a loss on the mark-to-market of our share-based deferred compensation plan in 2021 compared with a benefit in 2020; and•an increase of $43.0 million in depreciation expense due to capital projects placed in service.Net income and diluted EPS increased due primarily to the items discussed above and noncash impairment charges related to equity investments in our Natural Gas Gathering and Processing and Natural Gas Liquids segments in the prior year. These increases were offset partially by higher income taxes, higher interest expense related to lower capitalized interest and lower equity AFUDC due to completed projects, lower equity in net earnings from investments and a gain in 2020 on extinguishment of debt related to open market repurchases.Capital expenditures decreased due primarily to our completed and paused capital-growth projects.Additional information regarding our financial results and operating information is provided in the discussions for each of our segments. Selected Financial Results and Operating Information for the Year Ended December 31, 2020 vs. 2019 - The consolidated and segment financial results and operating information for the year ended December 31, 2020, compared with the year ended December 31, 2019, are included in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2020 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 ProcessingGrowth Projects - Our Natural Gas Gathering and Processing segment has invested in growth projects in NGL-rich areas in the Williston Basin. See "Growth Projects" in the "Recent Developments" section for discussion of our capital-growth projects.For a discussion of our capital expenditure financing, see "Capital Expenditures" in the "Liquidity and Capital Resources" section.39Table of ContentsSelected 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 31,2021 vs. 20202020 vs. 2019Financial Results202120202019$ Increase (Decrease) (Millions of dollars)NGL and condensate sales$2,821.2 $889.4 $1,224.4 1,931.8 (335.0)Residue natural gas sales1,483.9 771.5 966.1 712.4 (194.6)Gathering, compression, dehydration and processing fees and other revenue156.4 159.2 178.1 (2.8)(18.9)Cost of sales and fuel (exclusive of depreciation and operating costs)(3,226.1)(844.0)(1,302.3)2,382.1 (458.3)Operating costs, excluding noncash compensation adjustments(351.4)(320.0)(352.8)31.4 (32.8)Equity in net earnings (loss) from investments3.8 (1.1)(6.3)4.9 5.2 Other1.3 (5.0)(4.5)6.3 (0.5)Adjusted EBITDA$889.1 $650.0 $702.7 239.1 (52.7)Impairment charges$- $566.1 $- (566.1)566.1 Capital expenditures$275.2 $446.1 $926.5 (170.9)(480.4)See reconciliation of net income to adjusted EBITDA in the "Non-GAAP 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. 2021 vs. 2020 - Adjusted EBITDA increased $239.1 million, primarily as a result of the following:•an increase of $143.5 million due primarily to lower realized prices, net of hedging, in 2020 impacting our fee with POP contracts; and•an increase of $115.8 million from higher volumes due primarily to increased production and rising gas-to-oil ratios in the Rocky Mountain region in 2021 and production curtailments in 2020, offset partially by natural production declines in the Mid-Continent region; and•an increase of $7.3 million from a gain on the partial sale of an equity investment; offset by•an increase of $31.4 million in operating costs due primarily to higher employee costs related to short-term incentives.Capital expenditures decreased due primarily to completed capital-growth projects in 2020. Years Ended December 31,Operating Information (a)202120202019Natural gas gathered (BBtu/d)2,736 2,553 2,753 Natural gas processed (BBtu/d) (b)2,515 2,364 2,555 Average fee rate ($/MMBtu)$1.04 $0.89 $0.92 (a) - Includes volumes for consolidated entities only.(b) - Includes volumes at company-owned and third-party facilities.2021 vs. 2020 - Our natural gas gathered and natural gas processed volumes increased due primarily to increased producer activity and rising gas-to-oil ratios in the Rocky Mountain region and the impact of curtailed production in 2020, offset partially by natural production declines in the Mid-Continent region. Our average fee rate increased due primarily to production curtailments in the second quarter 2020 on producer contracts with higher fees and lower POP components in the Rocky Mountain region. As these curtailed volumes have returned to our system and producer activity has continued to increase, the Rocky Mountain region's contribution to our average fee rate increased in 2021.Commodity Price Risk - See discussion regarding our commodity price risk under "Commodity Price Risk" in