ONEOK Reports Higher Third-quarter 2008 Results; Affirms 2008 Earnings Guidance

Nine Months Ended

September 30,

(Unaudited)

2008

2007

Operating Activities

(Thousands of dollars)

Net income

$243,735

$201,997

Depreciation and amortization

179,429

168,458

Allowance for equity funds used during construction

(35,788)

(6,686)

Gain on sale of assets

(1,319)

(1,893)

Minority interests in income of consolidated subsidiaries

235,411

135,013

Equity earnings from investments

(74,805)

(64,975)

Distributions received from unconsolidated affiliates

67,812

77,144

Deferred income taxes

72,884

61,919

Stock-based compensation expense

26,776

22,448

Allowance for doubtful accounts

11,668

12,574

Inventory adjustment, net

9,659

-

Investment securities gains

(11,142)

-

Changes in assets and liabilities (net of acquisition and disposition effects):

Trade accounts and notes receivable

634,361

412,471

Gas and natural gas liquids in storage

(482,360)

(46,594)

Accounts payable

(210,768)

(97,254)

Commodity exchanges and imbalances, net

(3,137)

19,311

Unrecovered purchased gas costs

(51,959)

11,227

Accrued interest

48,736

42,488

Energy marketing and risk management assets and liabilities

49,904

70,741

Fair value of firm commitments

(135,826)

(38,340)

Other assets and liabilities

(94,873)

(30,092)

Cash Provided by Operating Activities

478,398

949,957

Investing Activities

Changes in investments in unconsolidated affiliates

3,063

(5,546)

Capital expenditures (less allowance for equity funds used during construction)

(1,033,063)

(527,497)

Changes in short-term investments

-

31,125

Proceeds from sale of assets

1,774

3,999

Proceeds from insurance

9,792

-

Other

2,450

-

Cash Used in Investing Activities

(1,015,984)

(497,919)

Financing Activities

Borrowing (payment) of notes payable, net

1,119,614

359,000

Issuance of debt, net of issuance costs

-

598,146

Payment of debt

(412,219)

(10,403)

Repurchase of common stock

(29)

(390,193)

Issuance of common stock

7,249

11,443

Issuance of common units, net of discounts

146,969

-

Dividends paid

(120,986)

(112,842)

Distributions to minority interests

(149,173)

(136,462)

Other

-

(5,250)

Cash Provided by Financing Activities

591,425

313,439

Change in Cash and Cash Equivalents

53,839

756,477

Cash and Cash Equivalents at Beginning of Period

19,105

68,268

Cash and Cash Equivalents at End of Period

$72,944

$833,745

Three Months Ended

Nine Months Ended

September 30,

September 30,

(Unaudited)

2008

2007

2008

2007

(Millions of dollars, except as noted)

ONEOK Partners

Net Margin

$325.4

$213.9

$874.9

$636.8

Operating costs

$97.5

$80.1

$272.7

$237.4

Depreciation and amortization

$30.4

28.8

$90.4

$84.3

Operating income

$197.5

105.1

$511.8

$317.1

Natural gas gathered (BBtu/d)

1,146

1,170

1,174

1,168

Natural gas processed (BBtu/d)

649

617

641

615

Natural gas transported (MMcf/d)

3,500

3,378

3,637

3,524

Natural gas sales (BBtu/d)

281

289

280

279

Natural gas liquids gathered (MBbl/d)

243

232

249

222

Natural gas liquids sales (MBbl/d)

273

223

275

221

Natural gas liquids fractionated (MBbl/d)

375

370

379

346

Natural gas liquids transported (MBbl/d)

331

225

314

219

Capital expenditures

$335.6

$202.0

$860.2

$408.4

Conway-to-Mount Belvieu OPIS average price differential Ethane ($/gallon)

$0.24

$0.05

$0.15

$0.05

Natural Gas Gathering and Processing:

Realized composite NGL sales prices ($/gallon)

$1.51

$1.09

$1.44

$0.97

Realized condensate sales prices ($/Bbl)

$99.61

$69.05

$96.91

$61.25

Realized natural gas sales price ($/MMBtu)

$8.33

$5.41

$8.39

$6.20

Realized gross processing spread ($/MMBtu)

$6.69

$5.54

$6.94

$4.56

Distribution

Net Margin

$123.9

$117.0

$490.6

$474.6

Operating costs

105,636

105,931

105,843

110,548

Depreciation and amortization

$29.3

$26.9

$87.3

$82.1

Operating income (loss)

$(2.9)

$(1.6)

$117.7

$113.5

Customers per employee

707

721

722

733

Capital expenditures

$56.1

$40.2

$126.4

$108.7

Natural gas volumes (Bcf)

Gas Sales

14.0

16.8

116.9

120.1

Transportation

50.3

48.0

163.4

148.7

Natural gas margins

Gas Sales

$96.0

$92.0

$395.8

$390.0

Transportation

$18.1

$17.1

$64.1

$58.8

Energy Services

Net margin

$4.8

$8.5

$93.9

$158.9

Operating costs

$9.5

$8.6

$28.0

$27.7

Depreciation and amortization

$0.2

$0.5

$0.8

$1.6

Operating income (loss)

$(3.5)

$(0.7)

$0.8

$1.6

Natural gas marketed (Bcf)

261

291

867

886

Natural gas gross margin ($/Mcf)

$0.02

$0.03

$0.08

$0.16

Physically settled volumes (Bcf)

560

605

1,756

1,794