Investor Story

ONEOK Partners, L.P. (pronounced ONE-OAK) is one of the largest publicly traded master limited partnerships and owns one of the nation’s premier natural gas liquids (NGL) systems, connecting NGL supply in the Mid-Continent, Permian and Rocky Mountain regions with key market centers and is a leader in the gathering, processing, storage and transportation of natural gas in the U.S. Its general partner is a wholly owned subsidiary of ONEOK, Inc., a pure-play publicly traded general partner, which owns 41.2 percent of the overall partnership interest, as of Dec. 31, 2015.

Highlights

55 bcf
natural gas
storage capacity
37,000
miles of natural gas
and natural gas liquids
pipelines
840,000 bpd
natural gas liquids
fractionation capacity
27 MMBbl
natural gas liquids
storage capacity
Corporate Snapshot

Who We Are

  • ONEOK Partners is an investment-grade master limited partnership (MLP) that owns and operates assets in the midstream natural gas and natural gas liquids businesses.
  • ONEOK Partners provides non-discretionary services to producers, processors and customers through our 37,000-mile integrated natural gas and natural gas liquids pipeline system.
  • ONEOK Partners completed more than $8 billion in growth projects from 2006-2015 that will complement and strengthen our businesses well into the future and has nearly $2 billion of growth projects in progress.

ONEOK PARTNERS ASSET OVERVIEW

Green Natural Gas Gathering and Processing
Blue Natural Gas Liquids
Gold Natural Gas Pipelines

Natural Gas

  • 18,800 miles of gathering pipeline
  • 6,600 miles of transmission pipeline
  • 55 billion cubic feet of storage capacity
  • 20 processing plants
  • 1,750 million cubic feet per day of processing capacity

Natural Gas Liquids

  • 7,100 miles of gathering pipeline
  • 4,300 miles of distribution pipeline
  • 27 million barrels of storage capacity
  • 7 fractionators
  • 840,000 barrels per day of net fractionation capacity
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Key Investment Considerations

ONEOK Partners

Stable cash flow

  • ONEOK Partners – primarily fee based, non-discretionary services
  • Prudent financial practices: proactively manage commodity risk
  • Strong balance sheet and financial flexibility: maintain investment grade credit ratings with sufficient liquidity to support capital growth projects

Strategic assets connecting prolific supply basins and key markets

  • Non-discretionary services to producers, processors and customers

Focused on creating value for both customers and investors

  • Demonstrated financial discipline
  • Commitment to investment-grade credit ratings at ONEOK Partners

Disciplined growth

  • Aligning capital growth projects with producer customer needs as a result of lower commodity prices

Safe, reliable and environmentally responsible operator

  • Proven track record and commitment
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Corporate Strategy

GROWTH

Increase distributable cash flow through investments in organic growth projects and strategic acquisitions

  • Continue to increase NGL and natural gas volume resulting in fee-based earnings
  • Continue to grow/expand our integrated natural gas liquids and natural gas infrastructure by utilizing our strategic supply and market positions

FINANCIAL

Manage balance sheet and maintain investment-grade credit ratings at ONEOK Partners

  • Manage growth rates in distribution over the long term, resulting in financial strength

ENVIRONMENT, SAFETY AND HEALTH

Continue sustainable improvement in ESH performance

  • Continue to maintain the mechanical reliability of our assets

PEOPLE

Attract, select, develop and retain a diverse and inclusive group of employees to support strategy execution

  • Management continuity is the result of effective succession planning
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Business Segments

Natural Gas Liquids

  • Provides nondiscretionary services and links key NGL market centers in Conway, Kansas, and Mont Belvieu, Texas

Natural Gas Pipelines

  • Nearly 100% of margin is fee-based

Natural Gas Gathering and Processing

  • Provides nondiscretionary services and is actively pursuing opportunities to increase fee-based earnings

Green Natural Gas Gathering and Processing
Blue Natural Gas Liquids
Gold Natural Gas Pipelines

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Growth Projects

ONEOK Partners completed more than $8 billion in growth projects from 2006-2015 that will complement and strengthen our businesses well into the future and has nearly $2 billion of growth projects in progress.

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Letter to Unit Holders

March 12, 2015

Dear ONEOK Partners Unit Holder,

In 2014, we continued our disciplined growth strategy, using completed projects as a springboard for additional growth across our operating footprint. Through organic growth and acquisitions, we added strategic assets in the natural gas liquids (NGL)-rich regions of North Dakota's Williston Basin, Wyoming's Powder River Basin, the Permian Basin in West Texas and southeastern New Mexico, and Kansas and Oklahoma in the Mid-Continent region. Our producer customers concentrated their drilling in these productive regions in 2014 and, as in years past, we remained committed to building the essential midstream infrastructure needed to gather, transport, process and store natural gas and NGLs from these areas.

This strategy to organically grow and expand our capabilities has been in process since 2006, when ONEOK became the sole general partner of Northern Border Partners and renamed it ONEOK Partners. To position ourselves as the multiservice midstream provider of choice in the regions where we operate, we've built or acquired seven new natural gas processing facilities, built or expanded three NGL fractionators and constructed thousands of miles of natural gas and NGL pipelines from 2006 to 2014.

This strategic growth demonstrates our commitment to providing responsive, flexible service to our customers. From 2010 to 2014, we executed nearly $6 billion in capital-growth projects and acquisitions in our natural gas and natural gas liquids business segments that resulted in increased natural gas and NGL volumes on our extensive 36,000-mile integrated pipeline network. In 2014 alone, we completed approximately $3.2 billion in capital-growth projects and acquisitions.

As a result of completed capital-growth projects and acquisitions, distributions declared to unitholders have increased at an 8 percent compound annual growth rate since 2010. In 2014, we increased the distribution declared to $3.07, compared with $2.89 in 2013, creating value for you, our unitholders.

We anticipate that incremental earnings from the completion of projects from this capital-growth program will allow us to increase the distribution declared by 3 to 5 percent in 2015 compared with 2014, subject to board approval.

2014 FINANCIAL PERFORMANCE

Despite the volatile fourth-quarter commodity price environment, ONEOK Partners reported a record year in 2014, with all of our business segments experiencing double-digit operating income growth compared with 2013.

2014 net income attributable to ONEOK Partners was $910.3 million, or $2.33 per unit, compared with $803.6 million, or $2.35 per unit in 2013. These results include a noncash impairment charge of $76.4 million, or 31 cents per unit, in the natural gas gathering and processing segment.

2014 adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) was $1.56 billion, a 24 percent increase compared with $1.26 billion in 2013. Distributable cash flow (DCF) for 2014 was $1.17 billion, providing 1.10 times coverage, compared with DCF of $949.2 million that provided 1.03 times coverage in 2013.

Even in the face of significant reductions in our producer customers' drilling budgets, we still expect considerable year-over-year volume growth as producers continue to drill in the most productive areas of their dedicated acreage.

Understanding the ever-changing needs of our customers -petrochemical companies, producers, refineries and natural gas distribution companies to name a few - and developing creative solutions for their challenges will l ensure we continue offering the reliable service our customers have come to expect from us, and that we demand of ourselves.

We continually work to improve efficiency and optimize costs, and to remove volatility and improve stability in the business. As an example, we restructured our business model more than 10 years ago to shift away from contracts with higher commodity price exposure to a more fee-based business model. Through creative contracting with our customers, we continue to find opportunities to enhance the services we provide to our customers and to increase fee-based earnings. The acquisition of the West Texas LPG pipeline system in the Permian Basin is an example of where we have added significant opportunities to grow our fee-based earnings.

CULTIVATING A CULTURE

What our dedicated team of employees has accomplished over the past year - and several years - truly is remarkable. As we have grown our operations and added natural gas processing plants, pipelines, NGL fractionators and other midstream infrastructure, it has been our employees who have come up with creative solutions to the operational and technical challenges of our systems. We appreciate their efforts to ensure that we operate safely, reliably and in an environmentally responsible manner.

To be successful, we must provide our employees and leaders with the resources and development they need to learn and grow. That's why in 2014 we designed and launched a comprehensive Leadership Development Strategy to create and cultivate a high-performing, diverse, learning organization that is collaborative, accountable and innovative. Leaders at every level of the company are participating in the strategy to improve interaction and communication between leaders and employees and to strengthen our competitive advantage.

At ONEOK Partners, we know that including, not excluding, diverse thoughts and opinions is key to our continued success. We make better decisions when we listen to the thoughts and opinions of others and don't rely solely on our own expertise. Diverse points of view are critical to decisions we make about the company. The Diversity and Inclusion Strategy we launched in 2014 will foster that culture of inclusion throughout the company.

We remain focused on operating our assets safely, reliably and environmentally responsibly and searching for creative ways to meet the ever-changing needs of our customers.

While the current environment presents challenges, our opportunities for continued growth rook favorable as we continue executing on our vision. We have uniquely positioned strategic assets with strong growth prospects and a long, rich history of our dedicated and experienced employees providing quality service to our customers.

We would like to recognize Gil J. Van Lunsen, who after 10 years of loyal and dedicated service will retire from our board of directors in April 2015. ONEOK Partners experienced unprecedented growth during Gil's tenure, and we are thankful for his invaluable leadership that helped shape the partnership into what it is today.

The important work we have accomplished in recent years and in 2014 has made ONEOK Partners well positioned and ready for the opportunities and challenges that lay ahead in 2015. As always, we thank you for your continued trust and investment in ONEOK Partners.

  John W. Gibson
CHAIRMAN
Terry K. Spencer
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
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