OKS

Oneok Partners, L.P.

ONEOK Partners, L.P. is a publicly traded Delaware master limited partnership that was formed in 1993. Our common units are listed on the NYSE under the trading symbol “OKS.” We are one of the largest publicly traded master limited partnerships and a leader in the gathering, processing, storage and transportation of natural gas in the United States. In addition, we own one of the nation’s premier natural gas liquids systems, connecting NGL supply in the Mid-Continent and Rocky Mountain regions with key market centers. We also own a 50 percent equity interest in a leading transporter of natural gas imported from Canada into the United States.

DESCRIPTION OF BUSINESS

Partnership Structure

We are managed under the direction of the Board of Directors of our sole general partner, ONEOK Partners GP, which consists of 10 members. Seven of our Board members qualify as independent under the listing standards of the NYSE and also serve as the Audit Committee of ONEOK Partners GP. Four of our independent directors serve on the Conflicts Committee.

ONEOK Partners GP is a wholly owned subsidiary of ONEOK. Three of our members that are independent under NYSE listing standards and one management member of the Board of Directors of our general partner are also members of ONEOK’s Board of Directors, with the management member being the only management member of ONEOK’s Board of Directors. As of December 31, 2009, ONEOK and its subsidiaries owned a 45.1 percent aggregate equity interest in us. As a result of our February 2010 public offering of common units, ONEOK and its subsidiaries own a 42.8 percent aggregate equity interest in us.

Business Strategy

Our primary business strategy is to increase distributable cash flow through consistent earnings growth while focusing on safe, reliable, environmentally responsible and legally compliant operations for our customers, employees, contractors and the public through the following:

·growing fee-based earnings;
·developing and executing internally generated growth projects;
·executing strategic acquisitions; and
·managing our balance sheet to maintain strong credit ratings at or above current investment-grade levels.

Outlook

We expect a moderate economic recovery in 2010, with inflationary pressures beginning in 2011. Although recent volatility in the financial markets could limit our access to financial markets on a timely basis or increase our cost of capital in the future, we anticipate improved credit markets during 2010, compared with 2009; however, inflation risk may increase the cost of capital. We anticipate the consolidation of underperforming assets in the industry, particularly those with high commodity price exposure and/or high levels of debt. Additionally, we anticipate an improving commodity price environment during 2010, compared with 2009.

We intend to pursue growth in our natural gas businesses through well connections and contract renegotiations and through new plant construction, expansions and extensions of our existing systems and plants. For our natural gas liquids business, we intend to continue to focus on adding new supply connections and expanding our existing assets. We plan to spend approximately $362 million on capital expenditures in 2010, of which approximately $278 million is expected to be for growth projects. We may also pursue strategic acquisitions related to gathering, processing, fractionating, storing, transporting or marketing natural gas and NGLs.

SIGNIFICANT DEVELOPMENTS

Capital Projects - The following projects were placed in service during 2009:

·Guardian Pipeline’s natural gas pipeline expansion and extension project;
·Williston Basin natural gas processing plant expansion;
·Arbuckle natural gas liquids pipeline;
·D-J Basin lateral natural gas liquids pipeline; and
·Piceance lateral natural gas liquids pipeline.

Equity Issuances - In July 2009, we completed an underwritten public offering of 5,486,690 common units, including the partial exercise by the underwriters of their over-allotment option, at $45.81 per common unit, generating net proceeds of approximately $241.6 million. In conjunction with the offering, ONEOK Partners GP contributed an aggregate of $5.1 million in order to maintain its 2 percent general partner interest in us. We used the proceeds from the sale of common units and the general partner contributions to repay borrowings under our Partnership Credit Agreement and for general partnership purposes.

In February 2010, we completed an underwritten public offering of 5,500,900 common units, including the partial exercise by the underwriters of their over-allotment option, at $60.75 per common unit, generating net proceeds of approximately $322.6 million. In conjunction with the offering, ONEOK Partners GP contributed $6.8 million in order to maintain its 2 percent general partner interest in us. We used the proceeds from the sale of common units and the general partner contribution to repay borrowings under our Partnership Credit Agreement and for general partnership purposes. As a result of these transactions, ONEOK and its subsidiaries own a 42.8 percent aggregate equity interest in us.

Debt Issuance - In March 2009, we completed an underwritten public offering of $500 million aggregate principal amount of 8.625 percent Senior Notes due 2019. We used the net proceeds of approximately $494.3 million from the offering to repay indebtedness outstanding under our Partnership Credit Agreement.

SEGMENT FINANCIAL INFORMATION

We implemented changes to the structure of our previous reportable business segments during the third quarter of 2009 to better align them with how we manage our businesses. Our financial results are now reported in these three reportable business segments: (i) Natural Gas Gathering and Processing; (ii) Natural Gas Pipelines, both of which remain unchanged; and (iii) Natural Gas Liquids, which consolidates our former natural gas liquids gathering and fractionation segment with our former natural gas liquids pipelines segment, due to the integrated manner in which they are managed.

EMPLOYEES

We do not directly employ any of the persons responsible for managing, operating or providing us with services related to our day-to-day business affairs. We have a service agreement with ONEOK, ONEOK Partners GP and NBP Services (the Services Agreement) under which our operations and the operations of ONEOK and its affiliates can combine or share certain common services in order to operate more efficiently and cost effectively. Under the Services Agreement, ONEOK provides us an equivalent type and amount of services that it provides to its other affiliates, including those services required to be provided pursuant to our Partnership Agreement. ONEOK Partners GP operates our interstate natural gas pipeline.