Our operations are obtained.

EconomicAn adverse change in economic conditions worldwide have from time to time contributed to slowdownsor in the economic regions in which we operate could negatively affect the crude oil and natural gas industry, as well as in the specific segments and markets in which ONEOK Partners operates,we operate, resulting in reduced demand and increased price competition for its productsour services and services. ONEOK Partners’products. Our operating results in one or more geographic regions may also be affected by uncertain or changing economic conditions within that region. Volatility in commodity prices may have an impact on many of ONEOK Partners’our suppliers and customers, which, in turn, could have a negative impact on their ability to meet their obligations to ONEOK Partners.us. Periods of severe volatility in equity and credit markets may disrupt our access to such markets, make it difficult to obtain financing necessary to expand facilities or acquire assets, increase financing costs and result in the imposition of restrictive financial covenants. If adverse global or regional economic and market conditions (including volatility in commodity markets) or economic conditions in the United States or other key markets remain uncertain or persist, spread or deteriorate further, we and ONEOK Partners may experience material impacts on our businesses, financial condition,business, results of operations, financial position, cash flows and liquidity.

The crude oil and natural gas industry is relying increasingly on supplies from nonconventional sources, such as shale and tight sands. Natural gas extracted from these sources frequently requires hydraulic fracturing, which involves the pressurized injection of water, sand and chemicals into a geologic formation to stimulate crude oil and natural gas production. Legislation or regulations placing restrictions on exploration and production activities, including hydraulic fracturing and disposal of waste water, could result in operational delays, increase operating costs and additional regulatory burdens on exploration and production operators. Any of these factors could reduce their production of unprocessed natural gas and, in turn, affect adversely our revenues and results of operations by decreasing the volumes of natural gas and NGLs gathered, treated, processed, fractionated and transported on our or ONEOK Partners’ facilitiesour joint ventures’ assets.

Our natural gas and NGL pipelines, processing, fractionation and storage assets compete with other pipelines, processing, fractionation and storage assets for natural gas and NGL supply delivered to the markets we serve. As a result of competition, we may have significant levels of uncontracted or discounted capacity on our assets, which could affect adversely our business.business, results of operations, financial position and cash flows.

As a result, current and potential holders of our equity and debt securities could lose confidence in our financial reporting, which would harm our business and cost of capital.

To manage the risk from market price fluctuations ofin natural gas, NGLs and crude oil prices, ONEOK Partnerswe may use derivative instruments such as swaps, futures, forwards and options. However, it doeswe do not hedge fully against commodity price changes, and we therefore it retainsretain some exposure to market risk. Accordingly, any adverse changes to commodity prices could result in decreased revenue and increased costs.

If any of our systems are damaged, fail to function properly or failureotherwise become unavailable, we may incur substantial costs to repair or replace them and may experience loss or corruption of equipmentcritical data and interruptions or processes, and the performance of pipeline facilities below expected levels of capacity and efficiency. Other operational hazards and unforeseen interruptions include adverse weather conditions, accidents, explosions, fires, the collision of equipment with ONEOK Partners’ pipeline facilities (for example, this may occur if a third party weredelays in our ability to perform excavation or construction work near ONEOK Partners’ facilities) and catastrophic events such as tornados, hurricanes, earthquakes, floods or other similar events beyond ONEOK Partners’ control. It is also possible that ONEOK Partners’ facilitiescritical functions, which could be direct targets or indirect casualties of an act of terrorism. A casualty occurrence might result in injury or loss of life, extensive property damage or environmental damage. Liabilities incurred and interruptions to the operations of ONEOK Partners’ pipelines or other facilities caused by such an event could reduce revenues generated by ONEOK Partners and increase expenses, thereby impairingaffect adversely our or ONEOK Partners’ ability to meet our respective obligations.  Insurance proceeds may not be adequate to cover all liabilities or expenses incurred or revenues lost, and neither we nor ONEOK Partners are fully insured against all risks inherent in our respective businesses.

damages, customer dissatisfaction, damage to our reputation and a loss of customers or revenues. If any such insurancefailure, interruption or similar event results in the improper disclosure of information maintained in our information systems and networks or those of our vendors, including personnel, customer and vendor information, we could also be subject to liability under relevant contractual obligations and laws and regulations protecting personal data and privacy. Efforts by us and our vendors to develop, implement and maintain security measures may not be paidsuccessful in preventing these events from occurring, and any network and information systems-related events could require us to expend significant resources to remedy such event. Cybersecurity, physical security and the continued development and enhancement of our controls, processes and practices designed to protect our enterprise, information systems and data from attack, damage or unauthorized access and to identify and appropriately report cyberattacks, remain a timely mannerpriority for us. Although we believe that we have robust information security procedures and other safeguards in place, as cyberthreats continue to evolve, we may be insufficient if such an event wererequired to occur.expend additional resources to continue to enhance our information security measures and/or to investigate and remediate information security vulnerabilities.

Various federal and state governmental authorities, including the EPA, have the power to enforce compliance with these laws and regulations and the permits issued under them. Violators are subject to administrative, civil and criminal penalties, including civil fines, injunctions or both. Joint and several, strict liability may be incurred without regard to fault under the CERCLA, Resource Conservation and Recovery Act and analogous state laws for the remediation of contaminated areas.

There is an inherent risk of incurring environmental costs and liabilities in ONEOK Partners’our business due to itsour handling of the products it gathers, transports, processeswe gather, transport, process and stores,store, air emissions related to itsour operations, past industry operations and waste disposal practices, some of which may be material. Private parties, including the owners of properties through which ONEOK

ONEOK Partners’Our insurance may not cover all environmental risks and costs or may not provide sufficienthas limits on coverage in the event an environmental claim is made against ONEOK Partners. ONEOK Partners’us. Our business may be affected materially and adversely by increased costs due to stricter pollution-control requirements or liabilities resulting from noncompliance with required operating or other regulatory permits. New or revised environmental regulations might also materially andaffect adversely affect ONEOK Partners’our products and activities, and federal and state agencies could impose additional safety requirements, all of which could affect materially ONEOK Partners’adversely our profitability.

GHG emissions originate primarily from combustion engine exhaust, heater exhaust and fugitive methane gas emissions. International, federal, regional and/or state legislative and/or regulatory initiatives may attempt to control or limit GHG emissions, including initiatives directed at issues associated with climate change. Various federal and state legislative proposals have been introduced to regulate the emission of GHGs, particularly carbon dioxide and methane, and the United States Supreme Court has ruled that carbon dioxide is a pollutant subject to regulation by the EPA. In addition, there have been international efforts seeking legally binding reductions in emissions of GHGs.

ONEOK Partners believesWe believe it is likely that future governmental legislation and/or regulation on the federal, state and regional levels, may require itus either to limit GHG emissions from itsassociated with our operations, pay additional taxes or to purchase allowances for such emissions thatemissions. These legislative and/or regulatory initiatives could make some of our activities uneconomic to maintain or operate. Further, we may not be able to pass on the higher costs to our customers or recover all costs related to complying with GHG regulatory requirements. Our future results of operations, financial position or cash flows could be affected adversely if such costs are actually attributablenot recovered or otherwise passed on to its NGLour customers. However, itwe cannot predict precisely what form these future regulations will take, the stringency of the regulations or when they willmay become effective. Several legislative bills have been introduced in the United States Congress that would require carbon dioxide emission reductions. Previously considered proposals have included, among other things, limitations on the amount of GHGs that can be emitted (so called “caps”) together with systems of emissions allowances. These proposals could require ONEOK Partners to reduce emissions, even though the technology is not currently available for efficient reduction, or to purchase allowances for such emissions. Emissions also could be taxed independently of limits.

There is a growing belief that emissionsThe threat of GHGs may be linked to global climate change. Climate change createsmay create physical and financial risk. ONEOK Partners’risks to our business. Our customers’ energy needs vary with weather conditions, primarily temperature and humidity. For residential customers, heating and cooling represent their largest energy use. To the extent weather conditions may be affected by climate change, customers’ energy use could increase or decrease depending on the duration and magnitude of any changes. Increased energy use due to weather changes may require ONEOK Partnersus to invest in more pipelines and other infrastructure to serve increased demand. A decrease in energy use due to weather changes may affect itsour financial condition, through decreased revenues. Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions. Weather conditions outside of ONEOK Partners’our operating territory could also have an impact on itsour revenues. Severe weather impacts itsour operating territories primarily through hurricanes, thunderstorms, tornados and snow or ice storms. To the extent the frequency of extreme weather events increases, this could increase itsour cost of providing service. ONEOK PartnersWe may not be able to pass on the higher costs to itsour customers or recover all the costs related to mitigating these physical risks. To

Compliance with these requirements can be costly and burdensome. Future changes to laws, regulations and policies in these areas may impair ONEOK Partners’our ability to compete for business or to recover costs and may increase the cost and burden of our operations. ONEOK PartnersWe cannot guarantee that state or federal regulators will not challenge our safety practices or will authorize any projects or acquisitions that itwe may propose in the future. Moreover, ONEOK Partners cannotthere can be no guarantee that, if granted, any such authorizations will be made in a timely manner or will be free from potentially burdensome conditions.

Failure to comply with all applicable state or federal statutes, rules and regulations and orders could bring substantial penalties and fines. For example,

Accounting policies for FERC-regulated companies permit certain assets that result from the regulated rate-making process to be recorded on our balance sheet that could not be recorded under GAAP for nonregulated entities. We consider factors such as regulatory changes and the Energy Policy Actimpact of 2005,competition to determine the FERCprobability of future recovery of these assets. If we determine future recovery is no longer probable, we would be required to write off the regulatory assets at that time.

Our operations require skilled and experienced workers with proficiency in multiple tasks. In recent years, a shortage of workers trained in various skills associated with the midstream energy business has, civil penalty authority underat times, caused us to conduct certain operations without full staff, thus hiring outside resources, which may decrease productivity and increase costs. This shortage of trained workers is the result of experienced workers reaching retirement age and increased competition for workers in certain areas, combined with the challenges of attracting new, qualified workers to the midstream energy industry. This shortage of skilled labor could continue over an extended period. If the shortage of experienced labor continues or worsens, it could affect adversely our labor productivity and costs and our ability to expand operations in the event there is an increase in the demand for our services and products, which could affect adversely our business, results of operations, financial position and cash flows.

Many of our pipeline and storage assets are designed as long-lived assets. Over time the age of these assets could result in increased maintenance or remediation expenditures and an increased risk of product releases and associated costs and liabilities. Any significant increase in these expenditures, costs or liabilities could affect adversely our business, results of operations, financial position and cash flows, as well as our ability to pay cash dividends.

otherwise affected by the activities of that joint venture. These participation and protective features customarily include a corporate governance structure that requires at least a majority-in-interest vote to authorize many basic activities and requires a greater voting interest (sometimes up to $1 million per day for each violation.

Moreover, subject to contractual restrictions, any joint-venture owner generally may sell, transfer or otherwise modify its ownership interest in a joint venture, whether in a transaction involving third parties or the other joint-venture owners. Any such regulationstransaction could result in us being required to partner with different or additional parties who may have business interests different from ours.

If we consummate any future acquisitions, our capitalization and results of operations may change significantly, and cash flows.investors will not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in determining the application of our resources to future acquisitions.

Effective internal controls are necessary for natural gasus to provide reliable financial reports, prevent fraud and foroperate successfully as a public company. We cannot be certain of ONEOK Partners’ productsthat our efforts to maintain our internal controls will be successful, that we will be able to maintain adequate controls over our financial processes and services is highly weather sensitive and seasonal.

As with all companies, we are exposed to the risk of employee fraud or other misconduct. Our Board of Directors has adopted a code of business conduct and ethics that applies to our directors, officers (including our principal executive and financial officers, principal accounting officer, controllers and other persons performing similar functions) and all other employees. We require all directors, officers and employees to adhere to our code of business conduct and ethics in addressing the legal and ethical issues encountered in conducting their work for our company. Our code of business conduct and ethics requires, among other things, that our directors, officers and employees avoid conflicts of interest, comply with all applicable laws and other legal requirements, conduct business in an honest and ethical manner and otherwise act with integrity and in our company’s best interest. All directors, officers and employees are required to report any conduct that they believe to be an actual or apparent violation of our code of business conduct and ethics. However, it is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could affect the demand for natural gas and adversely affect ONEOK Partners’ and our reputation, business, results of operations, financial position and cash flows.

Goodwill is recorded when the competitionpurchase price of a business exceeds the fair market value of the tangible and separately measurable intangible net assets. GAAP requires us to test goodwill for customers, ONEOK Partnersimpairment on an annual basis or when events or circumstances occur indicating that goodwill might be impaired. Long-lived assets, including intangible assets with finite useful lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may have significant levelsnot be recoverable. For the investments we account for under the equity method, the impairment test considers whether the fair value of excess capacity on its natural gasthe equity investment as a whole, not the underlying net assets, has declined and natural gas liquids pipelines, processing, fractionation and storage assets.

We are subject to the repurchasesrisk of loss resulting from nonpayment and/or nonperformance by our customers and repayment. ONEOK Partnerscounterparties. Our customers or counterparties may experience rapid deterioration of their financial condition as a result of changing market conditions, commodity prices or financial difficulties that could also face difficulties accessing capitalimpact their creditworthiness or its borrowing costs could increase, impacting its ability to pay us for our services. We assess the creditworthiness of our customers and counterparties and obtain financingcollateral or contractual terms as we deem appropriate. We cannot, however, predict to what extent our business may be impacted by deteriorating market or financial conditions, including possible declines in our customers’ and counterparties’ creditworthiness. Our customers and counterparties may not perform or adhere to our existing or future contractual arrangements. To the extent our customers and counterparties are in financial distress or commence bankruptcy proceedings, contracts with them may be subject to renegotiation or rejection under applicable provisions of the United States Bankruptcy Code. If our risk-management policies and procedures fail to assess adequately the creditworthiness of existing or future customers and counterparties, any material nonpayment or nonperformance by our customers and counterparties due to inability or unwillingness to perform or adhere to contractual arrangements could affect adversely our business, results of operations, financial position, cash flows and ability to pay cash dividends to our shareholders.

In July 2017, the head of the United Kingdom Financial Conduct Authority announced the desire to phase out the use of LIBOR by the end of 2021. In addition, the U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee composed of large US financial institutions, is considering replacing U.S. dollar LIBOR with the Secured Overnight Financing Rate (SOFR), a new index supported by short-term Treasury repurchase agreements. Although there have been some issuances utilizing SOFR, it is unknown whether this alternative reference rate will attain market acceptance as a replacement for acquisitions or capital expenditures,LIBOR.

Our $2.5 Billion Credit Agreement and our $1.5 Billion Term Loan Agreement include provisions that grant the agreement’s administrative agents with broad discretion to refinanceestablish a replacement rate for LIBOR, if necessary.

ONEOK Partners isWe are not prohibited under the indentures governing itsthe senior notes from incurring additional indebtedness, but itsour debt agreements do subject itus to certain operational limitations summarized in the next paragraph. ONEOK Partners’ incurrence ofIf we incur significant additional indebtedness, would exacerbateit could worsen the negative consequences mentioned above and could affect adversely itsour ability to repay its senior notes andour other indebtedness.

ONEOK Partners’ debt agreementsOur $2.5 Billion Credit Agreement and $1.5 Billion Term Loan Agreement contain provisions that restrict itsour ability to finance future operations or capital needs or to expand or pursue itsour business activities. For example, certain of these agreements contain provisions that, among other things, limit itsour ability to make loans or investments, make material changes to the nature of itsour business, merge, consolidate or engage in asset sales, grant liens or make negative pledges. Certain agreements also require itus to maintain certain financial ratios, which limit the amount of additional indebtedness itwe can incur. For example, the ONEOK Partners Credit Agreement contains a financial covenant requiring it to maintain a ratio of indebtedness to adjusted EBITDA (EBITDA,incur, as defineddescribed in the ONEOK Partners Credit Agreement, adjusted for all noncash charges“Liquidity and increased for projected EBITDA from certain lender-approved capital expansion projects)Capital Resources” section of no more than 5.0 to 1. If ONEOK Partners consummates one or more acquisitionsPart II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in which the aggregate purchase price is $25 million or more, the allowable ratio of indebtedness to adjusted EBITDA will increase to 5.5 to 1 for the quarter in which the acquisition was completed and the two following quarters.

If ONEOK Partners iswe are unable to meet itsour debt-service obligations itor comply with financial covenants, we could be forced to restructure or refinance itsour indebtedness, seek additional equity capital or sell assets. ItWe may be unable to obtain financing raise equity or sell assets on satisfactory terms, or at all.

Although many of our operating subsidiaries have guaranteed our debt commercial paper or other similar commitments of ONEOK Partners. Followingsecurities, the completion of the Merger Transaction,guarantees are subject to release under certain circumstances, and we and ONEOK Partners expect to enter into a cross guarantee agreement whereby each party to the agreement unconditionally guarantees and becomes liable for the indebtedness of each other party to the agreement.

The indentures governing certain of our and ONEOK Partners’ markets. Insenior notes include an event of default upon the Natural Gas Gatheringacceleration of other indebtedness of $15 million or more for certain of our senior notes or $100 million or more for certain of our and Processing segment, the development of these new nonconventional reserves could move drilling rigs from ONEOK Partners’ current service areassenior notes. Such events of default would entitle the trustee or the holders of 25% in aggregate principal amount of our and ONEOK Partners’ outstanding senior notes to other areas,declare those senior notes immediately due and payable in full. We may not have sufficient cash on hand to repurchase and repay any accelerated senior notes, which may reduce demandcause us to

borrow money under our credit facility or seek alternative financing sources to finance the repurchases and repayment. We could also face difficulties accessing capital or our borrowing costs could increase, impacting our ability to obtain financing for ONEOK Partners’ services. In the Natural Gas Pipelines segment, the displacement of natural gas originating in supply areas connectedacquisitions or capital expenditures, to ONEOK Partners’ pipeline systems by these new supply sources that are closerrefinance indebtedness and to the end-use markets could result in lower transportation revenues, which could have a material adverse impact on ONEOK Partners’ business, financial condition, results of operations and cash flows.fulfill our debt obligations.

Among other things, a legal challenge of the Intermediate Partnership’s guaranteecross guarantees of certain ofour and ONEOK Partners’ senior notesindebtedness on fraudulent conveyance grounds may focus on the benefits, if any, realized by the Intermediate Partnershipguarantor as a result of our and ONEOK Partners’ issuance of such senior notes.debt. To the extent the Intermediate Partnership’sguarantor’s guarantee of certain ofour and ONEOK Partners’ senior notesindebtedness is avoided as a result of fraudulent conveyance or held unenforceable for any other reason, the holders of such senior notesdebt would cease to have any claim in respect of the guarantee.

We have a defined benefit pension plan for certain employees and former employees hired before January 1, 2005, and postretirement welfare plans that provide postretirement medical and life insurance benefits to cause its joint venturescertain employees hired prior to take or not2017 who retire with at least five years of full-time service. The cost of providing these benefits to take certain actions unless some or all of its joint-venture participants agree.

Not applicable.

The following table sets forth our selected financial data for each of the periods indicated: