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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

ONEOK Inc., economic profit calculation

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net operating profit after taxes (NOPAT)¹	2,721,886)	2,553,175)	1,365,278)	2,040,364)	1,887,822)
Cost of capital²	15.14%	14.28%	12.79%	14.85%	15.79%
Invested capital³	22,064,152)	21,409,739)	21,625,131)	19,885,058)	16,415,008)

Economic profit⁴	(618,274)	(503,441)	(1,400,189)	(913,079)	(703,503)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,721,886 – 15.14% × 22,064,152 = -618,274

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	ONEOK Inc. economic profit increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

ONEOK Inc., NOPAT calculation

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income attributable to ONEOK	1,722,221)	1,499,706)	612,809)	1,278,577)	1,151,703)
Deferred income tax expense (benefit)¹	463,419)	472,057)	186,730)	372,729)	361,010)
Increase (decrease) in equity equivalents²	463,419)	472,057)	186,730)	372,729)	361,010)
Interest expense, net of capitalized interest	675,946)	732,924)	712,886)	491,773)	469,620)
Interest expense, operating lease liability³	2,846)	3,040)	3,239)	705)	988)
Adjusted interest expense, net of capitalized interest	678,792)	735,964)	716,125)	492,478)	470,608)
Tax benefit of interest expense, net of capitalized interest⁴	(142,546)	(154,552)	(150,386)	(103,420)	(98,828)
Adjusted interest expense, net of capitalized interest, after taxes⁵	536,246)	581,412)	565,739)	389,058)	371,780)
Net income (loss) attributable to noncontrolling interest	—)	—)	—)	—)	3,329)
Net operating profit after taxes (NOPAT)	2,721,886)	2,553,175)	1,365,278)	2,040,364)	1,887,822)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in equity equivalents to net income attributable to ONEOK.

³ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 80,399 × 3.54% = 2,846

⁴ 2022 Calculation
Tax benefit of interest expense, net of capitalized interest = Adjusted interest expense, net of capitalized interest × Statutory income tax rate
= 678,792 × 21.00% = 142,546

⁵ Addition of after taxes interest expense to net income attributable to ONEOK.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	ONEOK Inc. NOPAT increased from 2020 to 2021 and from 2021 to 2022.

ONEOK Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Provision for income taxes	527,424)	484,498)	189,507)	372,414)	362,903)
Less: Deferred income tax expense (benefit)	463,419)	472,057)	186,730)	372,729)	361,010)
Add: Tax savings from interest expense, net of capitalized interest	142,546)	154,552)	150,386)	103,420)	98,828)
Cash operating taxes	206,551)	166,993)	153,163)	103,105)	100,721)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	ONEOK Inc. cash operating taxes increased from 2020 to 2021 and from 2021 to 2022.

ONEOK Inc., invested capital calculation (financing approach)

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Current maturities of long-term debt	925,000)	895,814)	7,650)	7,650)	507,650)
Short-term borrowings	—)	—)	—)	220,000)	—)
Current finance lease liability	2,954)	2,584)	2,153)	1,949)	1,765)
Long-term debt, excluding current maturities	12,695,834)	12,747,636)	14,228,421)	12,479,757)	8,873,334)
Noncurrent finance lease liability	19,299)	21,082)	22,143)	24,296)	26,244)
Operating lease liability¹	80,399)	89,419)	101,220)	15,392)	18,502)
Total reported debt & leases	13,723,486)	13,756,535)	14,361,587)	12,749,044)	9,427,495)
Total ONEOK shareholders’ equity	6,493,885)	6,015,163)	6,042,398)	6,225,951)	6,579,543)
Net deferred tax (assets) liabilities²	1,738,525)	1,166,690)	669,697)	536,063)	219,731)
Equity equivalents³	1,738,525)	1,166,690)	669,697)	536,063)	219,731)
Accumulated other comprehensive (income) loss, net of tax⁴	108,256)	471,351)	551,449)	374,000)	188,239)
Adjusted total ONEOK shareholders’ equity	8,340,666)	7,653,204)	7,263,544)	7,136,014)	6,987,513)
Invested capital	22,064,152)	21,409,739)	21,625,131)	19,885,058)	16,415,008)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of equity equivalents to total ONEOK shareholders’ equity.

⁴ Removal of accumulated other comprehensive income.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	ONEOK Inc. invested capital decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

ONEOK Inc., cost of capital calculations

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	29,270,613)	29,270,613)	÷	42,093,265)	=	0.70	0.70	×	20.01%	=	13.92%
Series E Preferred Stock	20,000)	20,000)	÷	42,093,265)	=	0.00	0.00	×	5.50%	=	0.00%
Debt and finance lease liability³	12,722,253)	12,722,253)	÷	42,093,265)	=	0.30	0.30	×	5.09% × (1 – 21.00%)	=	1.22%
Operating lease liability⁴	80,399)	80,399)	÷	42,093,265)	=	0.00	0.00	×	3.54% × (1 – 21.00%)	=	0.01%
Total:	42,093,265)					1.00					15.14%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt and finance lease liability. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	28,477,332)	28,477,332)	÷	44,210,417)	=	0.64	0.64	×	20.01%	=	12.89%
Series E Preferred Stock	20,000)	20,000)	÷	44,210,417)	=	0.00	0.00	×	5.50%	=	0.00%
Debt and finance lease liability³	15,623,666)	15,623,666)	÷	44,210,417)	=	0.35	0.35	×	4.94% × (1 – 21.00%)	=	1.38%
Operating lease liability⁴	89,419)	89,419)	÷	44,210,417)	=	0.00	0.00	×	3.40% × (1 – 21.00%)	=	0.01%
Total:	44,210,417)					1.00					14.28%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt and finance lease liability. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	20,300,152)	20,300,152)	÷	36,745,668)	=	0.55	0.55	×	20.01%	=	11.06%
Series E Preferred Stock	20,000)	20,000)	÷	36,745,668)	=	0.00	0.00	×	5.50%	=	0.00%
Debt and finance lease liability³	16,324,296)	16,324,296)	÷	36,745,668)	=	0.44	0.44	×	4.91% × (1 – 21.00%)	=	1.72%
Operating lease liability⁴	101,220)	101,220)	÷	36,745,668)	=	0.00	0.00	×	3.20% × (1 – 21.00%)	=	0.01%
Total:	36,745,668)					1.00					12.79%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt and finance lease liability. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	30,424,412)	30,424,412)	÷	44,506,049)	=	0.68	0.68	×	20.01%	=	13.68%
Series E Preferred Stock	20,000)	20,000)	÷	44,506,049)	=	0.00	0.00	×	5.50%	=	0.00%
Debt and finance lease liability³	14,046,245)	14,046,245)	÷	44,506,049)	=	0.32	0.32	×	4.69% × (1 – 21.00%)	=	1.17%
Operating lease liability⁴	15,392)	15,392)	÷	44,506,049)	=	0.00	0.00	×	4.58% × (1 – 21.00%)	=	0.00%
Total:	44,506,049)					1.00					14.85%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt and finance lease liability. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	26,462,496)	26,462,496)	÷	36,129,007)	=	0.73	0.73	×	20.01%	=	14.66%
Series E Preferred Stock	20,000)	20,000)	÷	36,129,007)	=	0.00	0.00	×	5.50%	=	0.00%
Debt and finance lease liability³	9,628,009)	9,628,009)	÷	36,129,007)	=	0.27	0.27	×	5.34% × (1 – 21.00%)	=	1.12%
Operating lease liability⁴	18,502)	18,502)	÷	36,129,007)	=	0.00	0.00	×	5.34% × (1 – 21.00%)	=	0.00%
Total:	36,129,007)					1.00					15.79%

Based on: 10-K (reporting date: 2018-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt and finance lease liability. See details »

⁴ Operating lease liability. See details »

ONEOK Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	(618,274)	(503,441)	(1,400,189)	(913,079)	(703,503)
Invested capital²	22,064,152)	21,409,739)	21,625,131)	19,885,058)	16,415,008)
Performance Ratio
Economic spread ratio³	-2.80%	-2.35%	-6.47%	-4.59%	-4.29%
Benchmarks
Economic Spread Ratio, Competitors⁴
Chevron Corp.	5.74%	-3.33%	-17.48%	-12.77%	—
ConocoPhillips	13.42%	-0.52%	-19.17%	-0.52%	—
Exxon Mobil Corp.	8.66%	0.24%	-23.00%	-5.83%	—
Marathon Petroleum Corp.	12.12%	-2.42%	-26.42%	-3.20%	—
Occidental Petroleum Corp.	7.46%	-4.64%	-33.65%	-10.73%	—
Valero Energy Corp.	11.57%	-1.19%	-17.01%	-3.34%	—

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -618,274 ÷ 22,064,152 = -2.80%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	ONEOK Inc. economic spread ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

ONEOK Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	(618,274)	(503,441)	(1,400,189)	(913,079)	(703,503)
Revenues	22,386,892)	16,540,309)	8,542,242)	10,164,367)	12,593,196)
Performance Ratio
Economic profit margin²	-2.76%	-3.04%	-16.39%	-8.98%	-5.59%
Benchmarks
Economic Profit Margin, Competitors³
Chevron Corp.	5.17%	-4.14%	-36.52%	-17.87%	—
ConocoPhillips	12.92%	-0.87%	-51.91%	-0.93%	—
Exxon Mobil Corp.	6.46%	0.24%	-35.28%	-6.92%	—
Marathon Petroleum Corp.	4.75%	-1.28%	-26.57%	-2.12%	—
Occidental Petroleum Corp.	11.47%	-10.37%	-119.53%	-44.30%	—
Valero Energy Corp.	3.27%	-0.46%	-10.73%	-1.26%	—

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × -618,274 ÷ 22,386,892 = -2.76%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	ONEOK Inc. economic profit margin improved from 2020 to 2021 and from 2021 to 2022.

ONEOK Inc. (NYSE:OKE)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin