ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The 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 DEVELOPMENTS
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.
Acquisitions
Delaware Basin JV Acquisition - On May 28, 2025, we completed the Delaware Basin JV Acquisition for $941 million. Pursuant to the purchase agreement, we paid $550 million in cash, including post-closing adjustments, which we funded with short-term borrowings and issued approximately 4.9 million shares of ONEOK common stock to the seller with a fair value of $391 million as of the closing date. Following the completion of the transaction, it is now a wholly owned subsidiary.
EnLink Acquisition - On January 31, 2025, we completed the EnLink Acquisition. Pursuant to the EnLink Merger Agreement, each publicly held 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.
For additional information on our most recent acquisitions, see Part II, Item 8, Note B of the Notes to Consolidated Financial Statements in this Annual Report. See Part I, Item 1A “Risk Factors” for further discussion of risks related to these transactions.
Joint Ventures
Eiger Express Pipeline - In 2025, we, WhiteWater, MPLX LP and Enbridge Inc., through the existing Matterhorn joint venture, announced the new approximately 450-mile, 48-inch Eiger Express Pipeline, designed to transport up to approximately 3.7 Bcf/d of natural gas from the Permian Basin to Katy, Texas. WhiteWater will construct and operate the pipeline. Our total ownership interest in the pipeline will be 25.5%, which includes a 15% interest held directly in the Eiger joint venture with the remainder held through Matterhorn. We expect to invest a total of approximately $350 million into this project, which is expected to be completed in mid-2028.
BridgeTex Additional Interest Acquisition - On July 22, 2025, we completed the BridgeTex Additional Interest Acquisition. Pursuant to the purchase agreement, we paid approximately $270 million in cash, which we funded with short-term borrowings. Following the completion of the transaction, we now have a 60% ownership interest in BridgeTex.
Texas City Logistics and MBTC Pipeline - In February 2025, we announced definitive agreements to form joint ventures with MPLX LP 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, the export terminal joint venture, is owned 50% by us and 50% by MPLX LP, with MPLX LP constructing and operating the facility. MBTC Pipeline, the pipeline joint venture, is owned 80% by us and 20% by MPLX LP, and we will construct and operate the pipeline. We expect to invest a total of approximately $1.0 billion into these projects, which are expected to be completed in early 2028.
Market Conditions - Earnings increased in 2025, compared with 2024, due primarily to a full year of earnings from EnLink and Medallion across our segments and higher NGL and natural gas processing volumes. 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.
One Big Beautiful Bill Act (OBBBA) - On July 4, 2025, the OBBBA was signed into law. The OBBBA makes changes to U.S. tax law and includes provisions that, beginning in January 2025, make permanent full expensing of tangible personal property and restore EBITDA-based calculations for purposes of the business interest deduction. We expect the OBBBA to reduce our cash taxes beginning with the 2025 tax year; however, we do not anticipate the OBBBA to materially impact net income.
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Capital Projects - Our primary capital projects are outlined in the table below:
Project
Scope
Approximate
Cost (a)
Expected Completion
Natural Gas Gathering and Processing
(In millions)
Bighorn plant
300 MMcf/d processing plant with carbon dioxide treater in the Permian Basin
Mid-2027
Natural Gas Liquids
Elk Creek pipeline expansion
Increase capacity to 435 MBbl/d out of the Rocky Mountain region
Completed
Medford fractionator
Rebuild our 210 MBbl/d NGL fractionation facility in Medford, Oklahoma
Texas City Logistics export terminal (c)
400 MBbl/d liquified petroleum gas export terminal in Texas City, Texas
Early 2028
MBTC Pipeline
24-inch pipeline from Mont Belvieu, Texas, storage facility to the new Texas City, Texas, export terminal
Early 2028
Natural Gas Pipelines
Eiger Express Pipeline (c)
450-mile, 48-inch natural gas pipeline from the Permian Basin to Katy, Texas
Mid-2028
Refined Products and Crude
Greater Denver pipeline expansion
Increase total system capacity by 35 MBbl/d and additional expansion capabilities
Mid-2026
(a) - Excludes capitalized interest/AFUDC. For our Texas City Logistics, MBTC Pipeline and Eiger joint venture projects, the amounts presented exclude capital contributions from the other joint venture members.
(b) - 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.
(c) - Our investments in Texas City Logistics and Eiger are accounted for using the equity method. Spending on these projects will be recorded as contributions to unconsolidated affiliates.
In our Natural Gas Gathering and Processing segment, we are relocating a 150 MMcf/d processing plant to the Permian Basin from North Texas, which we expect to be completed in the first quarter of 2026.
For a discussion of our capital expenditures financing, see “Capital Expenditures” in the Liquidity and Capital Resources” section.
Debt Issuances - In August 2025, we completed an underwritten public offering of $3.0 billion senior unsecured notes consisting of $750 million, 4.95% senior notes due 2032; $1.0 billion, 5.4% senior notes due 2035; and $1.25 billion, 6.25% senior notes due 2055. The net proceeds, after deducting underwriting discounts, commissions and offering expenses, were $2.96 billion. The net proceeds from this offering were partially used to repay our commercial paper outstanding and repay in full at maturity our senior notes due September 2025. The remaining net proceeds from the offerings were used for general corporate purposes, including the repurchase and redemption of existing notes.
Debt Extinguishments - We completed the following debt extinguishments in 2025:
Principal
(Millions of dollars)
$250 at 3.2% due March 2025
$750 at 4.15% due June 2025
$400 at 2.2% due September 2025
$600 at 5.85% due January 2026 (a)
$650 at 5.0% due March 2026 (a)
Open Market Repurchases (b)
Total
( a) - Amounts redeemed at 100% of principal plus accrued and unpaid interest.
(b) - In 2025, we repurchased in the open market certain of our senior notes in the principal amount of $789 million for an aggregate repurchase price of $681 million, including accrued and unpaid interest. In connection with these open market repurchases, we recognized $106 million of net gains on extinguishment of debt which is included in other income, net in our Consolidated Statement of Income for the year ended December 31, 2025.
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Share Repurchase Program - Our Board of Directors authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock. The program will terminate upon completion of the repurchase of the $2.0 billion of common stock or on January 1, 2029, whichever occurs first. For the year ended December 31, 2025, we repurchased $62 million of our outstanding common stock with cash on hand.
Dividends - During 2025, we paid common stock dividends totaling $4.12 per share, an increase of 4% compared to the 2024 dividend of $3.96 per share. In February 2026, we paid a quarterly common stock dividend of $1.07 per share ($4.28 per share on an annualized basis). 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 February 13, 2026, to shareholders of record at the close of business on February 2, 2026.
FINANCIAL RESULTS AND OPERATING INFORMATION
How We Evaluate Our Operations
Management 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, noncash compensation expense and certain other noncash items. Our calculation includes adjusted EBITDA related to our unconsolidated affiliates using the same recognition and measurement methods used to record equity in net earnings from investments. 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.
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. See reconciliation of net income to adjusted EBITDA in the “Non-GAAP Financial Measures” subsection.
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Consolidated Operations
Selected Financial Results - The following table sets forth certain selected financial results for the periods indicated:
Years Ended December 31,
Financial Results
$ Increase (Decrease)
(Millions of dollars, except per share amounts)
Revenues
Commodity sales
Services and other
Total revenues
Cost of sales and fuel (exclusive of items shown separately below)
Operating costs
Depreciation and amortization
Transaction costs
Other operating income, net
Operating income
Equity in net earnings from investments
Interest expense, net of capitalized interest
Net income
Net income attributable to ONEOK
Diluted EPS
Adjusted EBITDA
Capital expenditures
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.
Due to the Medallion Acquisition and EnLink Controlling Interest Acquisition, operating results for these two companies are included in our financial results beginning November 1, 2024, and October 15, 2024, respectively.
2025 vs. 2024 - Operating income increased $752 million primarily as a result of the following:
• Natural Gas Gathering and Processing - an increase of $469 million due primarily to the operating income of EnLink and higher volumes in the Mid-Continent and Rocky Mountain regions, offset partially by lower realized NGL prices, net of hedging, and the impact from the divestiture of certain nonstrategic assets in 2024; and
• Natural Gas Liquids - an increase of $120 million due primarily to the operating income of EnLink, higher exchange services and higher optimization and marketing, offset partially by higher operating costs; offset by
• Natural Gas Pipelines - a decrease of $104 million due primarily to the impact of the interstate natural gas pipeline divestiture in 2024, offset partially by the operating income of EnLink and higher optimization and marketing; offset by
• Refined Products and Crude - an increase of $276 million due primarily to the operating income of Medallion and EnLink and lower operating costs.
Net income and diluted EPS increased due primarily to the items discussed above, offset partially by higher interest expense due to higher debt balances resulting from the September 2024 $7.0 billion notes offering, the August 2025 $3.0 billion notes offering, the acquired debt balances from the EnLink Controlling Interest Acquisition in 2024 and increased short-term borrowings in 2025 and higher equity in net earnings from investments in 2024.
Capital expenditures increased due primarily to the timing of our large capital projects and routine capital projects associated with the growth of our operations. 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.
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Selected Financial Results and Operating Information for the Year Ended December 31, 2024 vs. 2023 - The consolidated and segment financial results and operating information for the year ended December 31, 2024, compared with the year ended December 31, 2023, are included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2024 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 natural gas and NGL-rich areas across key basins where we operate. Our growth strategy is focused on providing solutions to producer customers that expand our presence within our key operating regions. 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 Natural Gas Gathering and Processing segment for the periods indicated:
Years Ended December 31,
Financial Results
$ Increase (Decrease)
(Millions of dollars)
NGL and condensate sales
Residue natural gas sales
Gathering, compression, dehydration and processing fees and other revenue
Cost of sales and fuel (exclusive of depreciation and operating costs)
Operating costs, excluding noncash compensation adjustments
Adjusted EBITDA from unconsolidated affiliates
Other
Adjusted EBITDA
Capital expenditures
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.
2025 vs. 2024 - Adjusted EBITDA increased $654 million primarily as a result of the following:
• an increase of $740 million due to adjusted EBITDA from EnLink; and
• an increase of $99 million from higher volumes due primarily to increased production in the Mid-Continent and Rocky Mountain regions; offset by
• a decrease of $122 million due to lower realized prices, primarily NGL prices, net of hedging; and
• a decrease of $81 million from the divestiture of certain nonstrategic assets in 2024.
Capital expenditures increased in 2025 due primarily to our routine and large capital projects, including our projects to relocate a processing plant to the Permian Basin from North Texas and construct our Bighorn processing plant in the Permian Basin.
Years Ended December 31,
Operating Information
Natural gas processed ( MMcf/d ) (a)(b)
(a) - Included volumes for consolidated entities only and excluded EnLink operating statistics for 2024 as they were not meaningful to full-year 2024 operating results.
(b) - Included volumes we processed at company-owned and third-party facilities.
2025 vs. 2024 - Our natural gas processed volumes increased in 2025 due to incremental volumes from EnLink and increased production in the Mid-Continent and Rocky Mountain regions.
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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 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.
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,
Financial Results
$ Increase (Decrease)
(Millions of dollars)
NGL and condensate sales
Exchange service and other revenues
Transportation and storage revenues
Cost of sales and fuel (exclusive of depreciation and operating costs)
Operating costs, excluding noncash compensation adjustments
Adjusted EBITDA from unconsolidated affiliates
Other
Adjusted EBITDA
Capital expenditures
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.
2025 vs. 2024 - Adjusted EBITDA increased $236 million primarily as a result of the following:
• an increase of $183 million due to adjusted EBITDA from EnLink;
• an increase of $39 million in exchange services due primarily to:
◦ $94 million of higher volumes in the Rocky Mountain region; and
◦ $27 million of higher average fee rates in the Rocky Mountain region; offset partially by
◦ $44 million of lower average fee rates in the Mid-Continent region;
◦ $21 million of lower volumes in the Mid-Continent region; and
◦ $20 million of higher transportation costs and higher inventory of unfractionated NGLs; and
• an increase of $31 million in optimization and marketing due primarily to higher earnings on sales of Purity NGLs held in inventory; offset by
• an increase of $16 million in operating costs due primarily to higher employee-related costs associated with the growth of our operations.
Capital expenditures decreased in 2025 due primarily to the completion of our MB-6 fractionator and pipeline expansion projects in 2024, offset partially by our Medford fractionator rebuild project.
Years Ended December 31,
Operating Information
Raw feed throughput ( MBbl/d ) (a)
Average Conway-to-Mont Belvieu Oil Price Information Service price differential - ethane in ethane/propane mix ( $/gallon )
(a) - Represents physical raw feed volumes for which we provided transportation and/or fractionation services, and excluded EnLink operating statistics in 2024 as they were 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.
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2025 vs. 2024 - Volumes increased in 2025 due primarily to incremental volumes from EnLink, higher ethane volumes in the Rocky Mountain region and higher volumes on short-term fractionation contracts in the Gulf Coast region, offset partially by lower ethane volumes in the Mid-Continent region.
Natural Gas Pipelines
Capital Projects - Our Natural Gas Pipelines segment invests in capital projects that provide transportation and services to end users. Our growth strategy is focused on expanding our transportation and storage capacity and services by connecting residue natural gas supply to demand markets and end users. 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.
Interstate Natural Gas Pipeline Divestiture - On December 31, 2024, we completed the sale of three of our wholly owned interstate natural gas pipeline systems to DT Midstream, Inc.
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,
Financial Results
$ Increase (Decrease)
(Millions of dollars)
Transportation revenues
Storage revenues
Residue natural gas sales and other revenues
Cost of sales and fuel (exclusive of depreciation and operating costs)
Operating costs, excluding noncash compensation adjustments
Adjusted EBITDA from unconsolidated affiliates
Other
Adjusted EBITDA
Capital expenditures
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.
2025 vs. 2024 - Adjusted EBITDA decreased $39 million primarily as a result of the following:
• a decrease of $359 million due to the interstate natural gas pipeline divestiture in 2024, offset by
• an increase of $253 million due to adjusted EBITDA from EnLink;
• an increase of $33 million due to optimization and marketing activity;
• an increase of $14 million in storage services due primarily to increased storage volumes; and
• an increase of $12 million in transportation services due primarily to higher transportation rates and volumes.
Capital expenditures decreased in 2025 due primarily to the completion of capital projects in 2024, offset partially by increased growth projects primarily from EnLink.
Years Ended December 31,
Operating Information (a)
Natural gas transportation capacity contracted ( MDth/d )
Transportation capacity contracted
(a) - Included volumes for consolidated entities only and excluded EnLink operating statistics in 2024 as they were not meaningful to full-year 2024 operating results.
2025 vs. 2024 - Natural gas transportation capacity decreased due primarily to the interstate natural gas pipeline divestiture in 2024, offset partially by EnLink transportation capacity contracted included in 2025.
Table of C ontents
Refined Products and Crude
Capital Projects - Our Refined Products and Crude segment invests in capital projects to transport, store and distribute Refined Products and crude oil primarily throughout the central United States. 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 periods indicated:
Years Ended December 31,
September 25 through December 31,
Financial Results
$ Increase (Decrease)
(Millions of dollars)
Product sales
Transportation revenues
Storage, terminals and other revenues
Cost of sales and fuel (exclusive of depreciation and operating costs)
Operating costs, excluding noncash compensation adjustments
Adjusted EBITDA from unconsolidated affiliates
Other
Adjusted EBITDA
Capital expenditures
(a) - T he year ended December 31, 2023, included results subsequent to the Magellan Acquisition.
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.
2025 vs. 2024 - Adjusted EBITDA increased $285 million primarily as a result of the following:
• an increase of $295 million due to adjusted EBITDA from Medallion and EnLink;
• a decrease of $55 million in operating costs due primarily to $40 million of lower outside services and $13 million of lower property taxes; and
• an increase of $28 million due primarily to the sale of environmental credits generated by our liquids blending business; offset by
• a decrease of $81 million in adjusted EBITDA from unconsolidated affiliates due primarily to lower earnings on BridgeTex associated with the nonrecurring recognition of deferred revenue in 2024; and
• a decrease of $10 million in optimization and marketing due primarily to lower liquids blending margins.
Capital expenditures increased in 2025, due primarily to our routine and large capital projects, including our greater Denver Refined Products pipeline expansion project.
Years Ended
Three Months Ended
December 31,
December 31,
Operating Information (a)
Refined Products volumes shipped ( MBbl/d )
Crude oil volumes shipped ( MBbl/d )
(a) - Included volumes for consolidated entities only and excluded Medallion and EnLink operating statistics in 2024 as they were not
meaningful to full-year 2024 operating results.
2025 vs. 2024 - Refined Products volumes shipped remained relatively unchanged.
Crude oil volumes shipped increased in 2025 due primarily to incremental volumes from Medallion and EnLink.
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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,
(Unaudited)
Reconciliation of net income to adjusted EBITDA
(Millions of dollars)
Net income
Interest expense, net of capitalized interest
Depreciation and amortization
Income taxes
Adjusted EBITDA from unconsolidated affiliates
Equity in net earnings from investments
Noncash compensation expense and other (a)
Adjusted EBITDA (b)(c)(d)
Reconciliation of segment adjusted EBITDA to adjusted EBITDA
Segment adjusted EBITDA:
Natural Gas Gathering and Processing
Natural Gas Liquids (d)
Natural Gas Pipelines (c)
Refined Products and Crude (e)
Other (b)
Adjusted EBITDA (b)(c)(d)
(a) - The year ended December 31, 2025, included noncash transaction costs related primarily to the EnLink Acquisition of $16 million included within noncash compensation and other.
(b) - The year ended December 31, 2025, included corporate net gains on extinguishment of debt of $106 million in connection with open market repurchases and interest income of $33 million, offset partially by transaction costs related primarily to the EnLink Acquisition of $65 million. The year ended December 31, 2024. included 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 December 31, 2023, included transaction costs related to the Magellan Acquisition of $158 million, offset partially by interest income of $49 million and corporate net gains on extinguishment of debt of $41 million in connection with open market repurchases.
(c) - The year ended December 31, 2024, included a gain of $227 million from the interstate natural gas pipeline divestiture.
(d) - The year ended December 31, 2023, included $633 million related to the Medford incident, including a settlement gain of $779 million, offset partially by $146 million of third-party fractionation costs.
(e) - The year ended December 31, 2023, included segment adjusted EBITDA for the period September 25, 2023, through December 31, 2023.
CONTINGENCIES
See Note O 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. While the results of these proceedings cannot be predicted with certainty, we believe the reasonably possible losses from such proceedings, individually and in the aggregate, are not material. Additionally, we believe the probable final outcome of such proceedings will not have a material adverse effect on our consolidated results of operations, financial position or cash flows.
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LIQUIDITY AND CAPITAL RESOURCES
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 resource requirements.
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 and joint ventures. We believe we have sufficient liquidity due to our $3.5 Billion Credit Agreement, which expires in February 2030, our $3.5 billion commercial paper program and access to $1.0 billion available through our “at-the-market” equity program. As of February 16, 2026, 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 derivative instruments, see Note D of the Notes to Consolidated Financial Statements in this Annual Report.
Cash Management - At December 31, 2025, we had $78 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. Our operating subsidiaries participate in this program to the extent they are permitted pursuant to FERC regulations or their operating agreements. 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.
Following the completion of the EnLink Acquisition on January 31, 2025, we terminated an agreement to provide revolving unsecured loans to EnLink through a promissory note, as EnLink operating subsidiaries are wholly owned and now participate in the cash management program described above. For additional information, see Note G of the Notes to Consolidated Financial Statements in this Annual Report.
Guarantees - ONEOK, ONEOK Partners, the Intermediate Partnership, Magellan, EnLink and EnLink Partners 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 of the guarantors’ existing and future senior unsecured indebtedness. The Intermediate Partnership holds all of ONEOK Partners’ interests and equity in its subsidiaries, which are nonguarantors, and substantially all the assets and operations reside with nonguarantor operating subsidiaries. Magellan, EnLink and EnLink Partners hold interests in their subsidiaries, which are nonguarantors, and substantially all the assets and operations reside with nonguarantor operating subsidiaries. Therefore, as allowed under Rule 13-01 of Regulation S-X, we have excluded the summarized financial information for each issuer and guarantor as 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.
For additional information on our indebtedness, see Note G 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 $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 nonmaterial modifications. All other terms and conditions remain substantially the same. In September 2025, we increased the size of our commercial paper program to $3.5 billion from $2.5 billion. As of February 16, 2026, 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 January 31, 2025, the EnLink Revolving Credit Facility was terminated. For additional information on the EnLink Revolving Credit Facility, see Note G of the Notes to Consolidated Financial Statements in this Annual Report.
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We had working capital (defined as current assets less current liabilities) deficits of $1.9 billion and $481 million as of December 31, 2025, and December 31, 2024, respectively, due primarily to current maturities of long-term debt and short-term borrowings at December 31, 2025, and current maturities of long-term debt at December 31, 2024. 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 payments, and (d) accounts receivable and payable; and (ii) the volume and cost of inventory and commodity imbalances. We may have working capital deficits in future periods as our long-term debt becomes current. We do not expect a working capital deficit of this nature to have a material adverse impact to our cash flows or operations.
For additional information on our $3.5 Billion Credit Agreement, see Note G of the Notes to Consolidated Financial Statements in this Annual Report.
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. Other options to obtain financing include, but are not limited to, issuing common stock, loans from financial institutions, issuance of convertible debt securities or preferred equity securities, asset securitization and the sale and lease-back of facilities.
We may, at any time, seek to retire or purchase our or ONEOK Partners’ outstanding debt through cash purchases and/or exchanges for equity or debt, in open market repurchases, privately negotiated transactions, exercise of contractual call rights, public tender offers or otherwise. Such repurchases and exchanges, if any, will be on such terms and prices as we may determine and will depend on prevailing market conditions, or liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Debt Issuances - In August 2025, we completed an underwritten public offering of $3.0 billion senior unsecured notes consisting of $750 million, 4.95% senior notes due 2032; $1.0 billion, 5.4% senior notes due 2035; and $1.25 billion, 6.25% senior notes due 2055. The net proceeds, after deducting underwriting discounts, commissions and offering expenses, were $2.96 billion. The net proceeds from this offering were partially used to repay our commercial paper outstanding and repay in full at maturity our senior notes due September 2025. The remaining net proceeds from the offering were used for general corporate purposes, including the repurchase and redemption of existing notes.
Debt Extinguishments - We completed the following debt extinguishments in 2025:
Principal
(Millions of dollars)
$250 at 3.2% due March 2025
$750 at 4.15% due June 2025
$400 at 2.2% due September 2025
$600 at 5.85% due January 2026 (a)
$650 at 5.0% due March 2026 (a)
Open Market Repurchases (b)
Total
( a) - Amounts redeemed at 100% of principal plus accrued and unpaid interest.
(b) - In 2025, we repurchased in the open market certain of our senior notes in the principal amount of $789 million for an aggregate repurchase price of $681 million, including accrued and unpaid interest. In connection with these open market repurchases, we recognized $106 million of net gains on extinguishment of debt which is included in other income, net in our Consolidated Statement of Income for the year ended December 31, 2025.
Equity Issuances - On May 28, 2025, we completed the Delaware Basin JV Acquisition. Pursuant to the purchase agreement, we issued approximately 4.9 million shares of ONEOK common stock to the seller with a fair value of $391 million as of the closing date.
On January 31, 2025, we completed the EnLink Acquisition. Pursuant to the EnLink Merger Agreement, each publicly held 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.
Share Repurchase Program - Our Board of Directors authorized a share repurchase program to buy up to $2.0 billion of our outstanding common stock. The program will terminate upon completion of the repurchase of the $2.0 billion of common stock or on January 1, 2029, whichever occurs first. For the year ended December 31, 2025, we repurchased $62 million of our outstanding common stock with cash on hand.
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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. Our senior notes and interest payments are discussed in Note G of the Notes to Consolidated Financial Statements in this Annual Report. We also have cash commitments related to transportation, storage and other commercial contracts, as well as our financial and physical derivative obligations, which we expect to fund with cash from operations.
Capital Expenditures - 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 capital expenditures are financed typically through operating cash flows and short- and long-term debt.
The following table sets forth our capital expenditures, less allowance for equity funds used during construction, for the periods indicated:
Capital Expenditures
( Millions of dollars )
Natural Gas Gathering and Processing
Natural Gas Liquids
Natural Gas Pipelines
Refined Products and Crude (b)
Other
Total capital expenditures
(a) - The year ended December 31, 2024, included capital expenditures for EnLink and Medallion for the period October 15, 2024, and November 1, 2024, through December 31, 2024, respectively.
(b) - The year ended December 31, 2023, included capital expenditures for Magellan for the period September 25, 2023, through December 31, 2023.
Capital expenditures increased in 2025, compared with 2024, due primarily to the timing of our large capital projects and routine capital projects associated with the growth of our operations. See discussion of our announced capital projects in the “Recent Developments” section.
We expect total capital expenditures of $2.7 - $3.2 billion in 2026.
Credit Ratings - Our credit ratings as of February 16, 2026, are shown in the table below:
Rating Agency
Long-term Rating
Short-term Rating
Outlook
Moody’s
Baa2
Prime-2
Stable
BBB
Stable
Fitch
BBB
Stable
Our credit ratings, which are investment grade, may be affected by our leverage, liquidity, credit profile or potential transactions. 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 $3.5 Billion Credit Agreement could 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. An adverse credit rating change alone is not a default under our $3.5 Billion Credit Agreement.
In the normal course of business, our counterparties provide us with secured and unsecured credit. In the event of a downgrade in our credit ratings or a significant change in our counterparties’ evaluation of our creditworthiness, we could be required to provide additional collateral in the form of cash, letters of credit or other negotiable instruments as a condition of continuing to conduct business with such counterparties. We may be required to fund margin requirements with our counterparties with cash, letters of credit or other negotiable instruments.
Dividends - Holders of our common stock share equally in any common stock dividends declared by our Board of Directors. In 2025, we paid common stock dividends totaling $4.12 per share, an increase of 4% compared to the 2024 dividend of $3.96 per share. In February 2026, we paid a quarterly common stock dividend of $1.07 per share ($4.28 per share on an annualized basis), an increase of 4% compared with the same quarter in the prior year.
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For the year ended December 31, 2025, our cash flows from operations exceeded dividends paid by $3.0 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.
CASH FLOW ANALYSIS
We use the indirect method to prepare our Consolidated Statements of Cash Flows. 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 business and assets, net undistributed earnings from unconsolidated affiliates, 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,
(Millions of dollars)
Total cash provided by (used in):
Operating activities
Investing activities
Financing activities
Change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Operating Cash Flows - Operating cash flows are affected by earnings from our business activities and changes in our operating assets and liabilities. Changes in commodity prices and demand for our services or products, whether because of general economic conditions, changes in supply, changes in demand for the end products that are made with our products or increased competition from other service providers, could affect our earnings and operating cash flows. 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.
2025 vs. 2024 - Cash flows from operating activities, before changes in operating assets and liabilities increased $1.0 billion for the year ended December 31, 2025, compared with the same period in 2024, due primarily to the impact of the EnLink and Medallion Acquisitions as discussed in “Financial Results and Operating Information.”
The changes in operating assets and liabilities decreased operating cash flows $380 million for the year ended December 31, 2025, compared with a decrease of $43 million for the same period in 2024. This change is due primarily to changes in accounts receivable resulting from the growth of our operations and the timing of the receipt of cash from counterparties and from inventory, both of which vary from period to period, and with changes in commodity prices. These changes were offset partially by changes in accounts payable resulting from the growth of our operations and the timing of payments to vendors, suppliers and other third parties, which vary from period to period, and with changes in commodity prices.
Investing Cash Flows
2025 vs. 2024 - Cash used in investing activities for the year ended December 31, 2025, decreased $2.9 billion compared with the same period in 2024, due primarily to cash paid to acquire EnLink and Medallion in 2024, offset partially by proceeds received from the interstate natural gas pipeline divestiture in 2024, an increase in capital expenditures related to our capital projects in 2025 and cash paid for the BridgeTex Additional Interest Acquisition.
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Financing Cash Flows
2025 vs. 2024 - Cash from financing activities for the year ended December 31, 2025, decreased $4.6 billion compared with the same period in 2024, due primarily to the issuance of senior unsecured notes associated with acquisitions in 2024, increased extinguishment of long-term debt in 2025, cash paid for the Delaware Basin JV Acquisition and increased dividends paid in 2025, offset partially by the issuance of senior unsecured notes in August 2025 and an increase in short-term borrowings in 2025.
Cash Flow Analysis for the Year Ended December 31, 2024 vs. 2023 - The cash flow analysis for the year ended December 31, 2024, compared with the year ended December 31, 2023, is included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2024 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
Information about the impact of new accounting standards is included in Note A of the Notes to Consolidated Financial Statements in this Annual Report.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our Consolidated Financial Statements and related disclosures in accordance with GAAP requires us to make estimates and assumptions with respect to values or conditions that cannot be known with certainty that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements. These estimates and assumptions also affect the reported amounts of revenue and expenses during the reporting period. Although we believe these estimates and assumptions are reasonable, actual results could differ from our estimates.
The following is a summary of our most critical accounting estimates, which are defined as those estimates most important to the portrayal of our financial condition and results of operations and requiring management’s most difficult, subjective or complex judgment, particularly because of the need to make estimates concerning the impact of inherently uncertain matters. We have discussed the development and selection of our critical accounting estimates with the Audit Committee of our Board of Directors. See Note A of the Notes to Consolidated Financial Statements in this Annual Report for the description of our accounting policies.
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. The accounting for changes in the fair value of a derivative instrument depends on whether it qualifies and has been designated as part of a hedging relationship. When possible, we implement effective hedging strategies using derivative financial instruments that qualify as hedges for accounting purposes. We have not used derivative instruments for trading purposes. For a derivative designated as a cash flow hedge, the gain or loss from a change in fair value of the derivative instrument is deferred in accumulated other comprehensive loss until the forecasted transaction affects earnings, at which time the fair value of the derivative instrument is reclassified into earnings.
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 elect not to designate it as a cash flow hedge, changes in fair value of the derivative instrument would be recorded currently in earnings. 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. For more information on commodity price sensitivity and a discussion of the market risk of pricing changes, see Item 7A, Quantitative and Qualitative Disclosures about Market Risk.
See Notes A, C and D of the Notes to Consolidated Financial Statements in this Annual Report for additional discussion of fair value measurements and derivatives and risk-management activities.
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
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whether it is more likely than not that the fair value of each of our reporting units 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.
In a Step 1 analysis, an assessment is made by comparing the fair value of a reporting unit with its carrying amount, including goodwill. 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 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. When evidence of loss in value has occurred, we compare our estimate of fair value of the investment to the carrying value of the investment to determine whether an impairment has occurred. If the estimated fair value is less than the carrying value and we consider the decline in value to be other-than-temporary, the excess of the carrying value over the fair value is recognized in our consolidated financial statements as an impairment charge.
Our impairment tests require the use of assumptions and estimates, such as industry economic factors and the profitability of future business strategies. To estimate undiscounted future cash flows of long-lived assets we may apply a probability-weighted approach that incorporates different assumptions and potential outcomes related to the underlying long-lived assets. The evaluation is performed at the lowest level for which separately identifiable cash flows exist. To estimate the fair value of these assets, we use two generally accepted valuation approaches, an income approach and a market approach. Under the income approach, our discounted cash flow analysis includes the following inputs that are not readily available: a discount rate reflective of industry cost of capital, our estimated contract rates, volumes, operating margins, operating and maintenance costs and capital expenditures. Under the market approach, our inputs include EBITDA multiples, which are estimated from recent peer acquisition transactions, and forecasted EBITDA, which incorporates inputs similar to those used under the income approach. 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, E, F 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.
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. As we place additional assets in service or acquire assets as a result of an acquisition or asset purchase, our estimates related to depreciation expense have become more significant and changes in estimated useful lives of our assets could have a material effect on our results of operations. At the time we place our assets in service, we believe such assumptions are reasonable; however, circumstances may develop that would cause us to change these assumptions, which would change our depreciation expense prospectively. 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.
See Note E of the Notes to Consolidated Financial Statements in this Annual Report for additional discussion of property, plant and equipment.
