The following discussion and analysis should be read in conjunction with our unaudited Consolidated Financial Statements and the Notes to Consolidated Financial Statements in this Quarterly Report, as well as our 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 Quarterly Report for additional information.



Market Conditions, COVID-19 and Business Update - We experienced earnings growth
from increased volumes in the third quarter 2021, compared with the third
quarter 2020, due primarily to increased producer activity and rising gas-to-oil
ratios in the Rocky Mountain region, increased ethane production across our
system and higher commodity prices, highlighting both the resiliency of our
integrated assets and the economic recovery from the pandemic. Although the
energy industry has experienced many up and down cycles, we have positioned
ourselves to reduce exposure to direct commodity price volatility. Each of our
three reportable segments are primarily fee-based, and we expect our
consolidated earnings to be approximately 90% fee-based in 2021. While our
Natural Gas Gathering and Processing segment's earnings are primarily fee-based,
we have direct commodity price exposure related primarily to fee with POP
contracts. In addition, our Natural Gas Gathering and Processing and Natural Gas
Liquids segments are exposed to volumetric risk as a result of drilling and
completion activity, normal volumetric well decline, severe weather disruption,
operational outages and crude oil, NGL and natural gas demand. Our Natural Gas
Pipelines segment is not exposed to significant volumetric risk due to nearly
all of our capacity being subscribed under long-term firm fee-based contracts.

In continued response to COVID-19, we remain committed to managing the impact of
the pandemic on our employees. We continue to protect our workforce and, as
always, we remain focused on operating our assets safely, reliably and in an
environmentally responsible manner. We continue to monitor the COVID-19 pandemic
and have previously implemented our business continuity plans. ONEOK is a
critical infrastructure business as defined by the United States Department of
Homeland Security and, therefore, our workforce has remained fully engaged
within federal, state and local government issued guidelines and safety-related
ordinances. We continue to practice remote work procedures when possible to
protect the safety of our employees and their families and continue to take
precautions for our employees who work in the field or need to report to a ONEOK
facility. We anticipate implementing a return to office plan in early 2022. We
continue to apply risk-management and cybersecurity measures designed so that
our systems remain functional in order to both serve our operational needs and
to provide service to our customers.

Due to higher commodity prices, increased producer activity in the regions we
operate and increased ethane production across our system, volumes in the third
quarter 2021 increased, compared with the second quarter 2021, in both our
Natural Gas Gathering and Processing and Natural Gas Liquids segments. We expect
volumes to remain strong for the remainder of 2021 and into 2022 due to
continued increases in producer activity, rising gas-to-oil ratios in the Rocky
Mountain region and increased ethane demand from the petrochemical industry.
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In February 2021, Winter Storm Uri brought significant challenges to the energy
industry and our operating areas. Our employees were proactive in preparing for
the severe winter weather, made the necessary operational adjustments to keep
our assets operational and provided exceptional service to meet the needs of our
customers during the difficult weather conditions as demand for natural gas,
propane and electricity soared. This increased demand, coupled with supply
reductions from producer wellhead freeze-offs and power outages impacting
processing plants in the Mid-Continent and Rocky Mountain regions and the
Permian Basin and fractionators in the Mid-Continent region, resulted in record
high commodity prices at certain market hubs, particularly in the Mid-Continent
region and in Texas. Commodity prices quickly returned to previous levels as the
weather improved and natural gas supply returned.

Winter Storm Uri impacted all three of our operating segments, resulting in a
net positive impact to our financial results, primarily in the first quarter
2021, as our ability to meet increased demand for natural gas and to provide
services during the period offset the unfavorable volume impacts. Our
well-positioned natural gas storage assets and market connected pipelines in our
Natural Gas Pipelines segment were able to meet critical needs during this
period of severe winter weather. The reliability of our interstate and
intrastate assets enabled us to continue to provide our customers access to
transportation services, park-and-loan services and additional natural gas
supply if available, which improved our financial results. However, producer
wellhead freeze-offs reduced February volumes in our Natural Gas Gathering and
Processing and Natural Gas Liquids segments, which negatively impacted our
financial results in the first quarter 2021.

See Part I, Item 3, Quantitative and Qualitative Disclosures About Market Risk, in this Quarterly Report for more information on our exposure to market risk.



Sustainability and Social Responsibility - We continue to look for ways to
reduce our environmental impact and utilize more efficient technologies. In
2021, we qualified for inclusion in the S&P Global Sustainability Yearbook and
received Industry Mover status, which is awarded to a company that recorded the
strongest year-over-year improvement in its industry. In addition, we received a
perfect score of 100 in the Human Rights Campaign 2021 Corporate Equality Index.
We have a stand-alone environmental sustainability team, formed in 2017, that
accelerated our ongoing environmental stewardship efforts and is exploring ways
to lower our greenhouse gas emissions. Additionally, in 2020, we created a group
dedicated to the commercial development of renewable energy and low-carbon
projects. Together with our sustainability team, we are actively researching
opportunities that will complement our extensive midstream assets and expertise,
strengthening the vital role we expect to play in the transformation to a
lower-carbon economy.

In September 2021, we announced a 30% absolute greenhouse gas emissions
reduction target, or 2.2 million metric tons, of our combined Scope 1 and Scope
2 emissions by 2030, compared with 2019 base-year levels. Scope 1 and 2
emissions represent our total operational emissions, including direct emissions
from sources we operate and indirect emissions from the generation of purchased
power. We anticipate several potential pathways toward achieving our emissions
reduction target, which could include the electrification of certain natural gas
compression assets across our operations, methane mitigation through best
management practices and system optimizations. Additionally, we are identifying
potential opportunities to collaborate with utilities and power generators to
accelerate the availability of lower-carbon power options across our operations.
We will maintain a disciplined capital approach and continue to discuss our
total capital expenditures and provide our expected total capital spend annually
in the "Liquidity and Capital Resources" section. We also expect to provide
periodic updates regarding our progress towards our emissions reduction target
at least annually.

Natural Gas - In our Natural Gas Gathering and Processing segment, gathered and
processed volumes in the Rocky Mountain region increased in the third quarter
2021, compared with the second quarter 2021, due primarily to increased
production. Volumes in the Rocky Mountain region also increased, compared with
the third quarter 2020, due primarily to increased producer activity, rising
gas-to-oil ratios and the impact of curtailed production in 2020. We expect to
benefit from increased producer activity in the Rocky Mountain region, which
includes the completion of previously drilled but uncompleted wells, and from
our Bear Creek plant expansion that is complete and in-service. Our Bear Creek
plant expansion increased our total processing capacity to approximately
1.7 Bcf/d in the Williston Basin.

In our Natural Gas Pipelines segment, our assets are connected to key supply
areas and demand centers, including export markets in Mexico via Roadrunner and
supply areas in Canada and the United States via our interstate and intrastate
natural gas pipelines and Northern Border Pipeline, which enable us to provide
essential natural gas transportation and storage services. Continued demand from
local distribution companies, electric-generation facilities and large
industrial companies resulted in low-cost expansions in 2019, 2020, 2021 and
expansions expected to be completed in 2022 that position us well to provide
additional services to our customers when needed. The contracted portion of our
natural gas transportation capacity is not significantly impacted by commodity
prices, as our end users rely on natural gas to support their business
regardless of commodity price fluctuations. We continue to experience stable
fee-based earnings with transportation capacity approximately
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95% contracted with firm commitments, which we expect to continue for the
remainder of 2021 at similarly contracted levels. Our ability to provide
reliable service throughout the extreme weather conditions of Winter Storm Uri
highlighted the importance of market-connected pipelines and storage assets and
the value of these services. Since the storm, we have received increased
interest from customers seeking additional long-term transportation and storage
capacity on our system. As a result, we have recontracted storage services at
higher rates and longer terms. Additionally, we are expanding the capacity of
our storage facilities in Texas and exploring additional storage capacity
expansion opportunities. In addition, during the first quarter 2021, we sold
natural gas that we owned and held in storage, which benefited our segment's
financial results. During the extreme winter weather periods, we maximized
natural gas storage withdrawals for firm service customers serving critical
needs.

NGLs - In our Natural Gas Liquids segment, NGL volumes were higher in the third
quarter 2021, compared with the second quarter 2021, due primarily to increased
producer activity in the Rocky Mountain region and Permian Basin and increased
ethane production across our system. Volumes were also higher, compared with the
third quarter 2020, due primarily to increased producer activity in the Rocky
Mountain region and Permian Basin, increased ethane production across our system
in 2021 and the impact of curtailed production in 2020, offset partially by
lower volumes in the Barnett Shale. We expect to benefit from increased producer
activity and increased demand for ethane as the economic recovery continues and
two new petrochemical plants are expected to come online in the next six to
twelve months.

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.
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 20 MBbl/d to an average of 455 MBbl/d
in the third quarter 2021, compared with 435 MBbl/d in the second quarter 2021,
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, ethane economics and potential incentivized recovery.

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. We have completed significant
capital-growth projects that include NGL pipelines, NGL fractionators, natural
gas processing plants and related natural gas and NGL infrastructure. These
projects provide us the capacity to benefit from future supply growth without
significant capital investment. Our announced capital-growth projects are
outlined in the table below:

Approximate


           Project                                 Scope                           Costs (a)           Expected Completion
Natural Gas Gathering and Processing

(In millions)

Bear Creek plant expansion and 200 MMcf/d processing plant expansion and 

$405                   Completed
related infrastructure         related gathering infrastructure in the
                               Williston Basin
                               Supported by acreage dedications with
                               long-term primarily fee-based contracts
Natural Gas Liquids

Arbuckle II pipeline expansion Increasing mainline capacity with additional

$60                   Completed
                               pump facilities
                               Increases capacity to 500 MBbl/d

MB-5 fractionator and related 125 MBbl/d NGL fractionator in Mont Belvieu,

$750                  Paused (b)
infrastructure                 Texas, and related infrastructure, which
                               includes additional NGL storage in Mont
                               Belvieu

West Texas LPG pipeline        Increasing mainline capacity by 40 MBbl/d             $145                  Paused (b)
expansion

Mid-Continent fractionation    65 MBbl/d of expansions at our Mid-Continent          $150                  Paused (b)
facility expansions            NGL facilities


(a) - Excludes capitalized interest/AFUDC.
(b) - We do not expect to complete construction by the original target
completion date. While many of the construction activities on these projects
were paused in 2020, some activity continued in order to complete the
infrastructure necessary to support volumes until market conditions warrant full
project completion.

Debt Repayments - On November 1, 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. As of October 31, 2021, we had $150 million of short-term
borrowings outstanding.

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Table of Contents In June 2021, we repaid the remaining $11.7 million of Guardian Pipeline's senior notes due December 2022 with cash on hand.

In the first quarter 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 - In February 2021, May 2021 and August 2021, we maintained and paid a
quarterly dividend of $0.935 per share ($3.74 per share on an annualized basis),
which is consistent with the respective quarters in the prior year. We declared
a quarterly dividend of $0.935 per share ($3.74 per share on an annualized
basis) in October 2021. The quarterly dividend will be paid November 15, 2021,
to shareholders of record at the close of business on November 1, 2021.

Goodwill Impairment Review - 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. At July 1, 2021, we assessed
qualitative factors to determine whether it was more likely than not that the
fair value of each of our reporting units was less than their carrying amount.
After assessing qualitative factors (including macroeconomic conditions,
industry and market considerations, costs and overall financial performance), we
determined that it was more likely than not that the fair value of each
reporting unit was not less than their respective carrying value, that no
further testing was necessary and that goodwill was not considered impaired.

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, 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.

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