Filed by ONEOK, Inc.
(Commission File No. 001-13643)
Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: ONEOK Partners, L.P.
(Commission File No.: 1-12202)
This filing relates to the proposed business combination of ONEOK, Inc. (“OKE”) and ONEOK Partners, L.P. (“OKS”)
pursuant to the terms of an Agreement and Plan of Merger, dated as of January 31, 2017 (the “Merger Agreement”), by and
among OKE, New Holdings Subsidiary, LLC, OKS, and ONEOK Partners GP, L.L.C. The Merger Agreement is on file with
the Securities and Exchange Commission as an exhibit to the Current Report on Form 8-K filed by OKS on February 1, 2017,
and is incorporated by reference into this filing.
OKE and OKS will participate in a series of one-on-one meetings with investment-community representatives March 29-30,
2017 and includes information related to the proposed business combination of OKE and OKS. Materials used at the meetings
were posted on the OKE and OKS websites, www.oneok.com and www.oneokpartners.com, beginning at 8 a.m. Eastern
Daylight Time (7 a.m. Central Daylight Time) on Wednesday, March 29, 2017.
INVESTOR UPDATE
March 2017
Page 2
FORWARD-LOOKING STATEMENTS
This presentation contains certain "forward-looking statements" within the meaning of federal securities laws and covered by the safe harbor protections. Words such as "anticipates", "believes," "expects", "intends", "plans",
"projects", "will", "would", "should", "may", and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect ONEOKs (OKE) and ONEOK
Partners’ (OKS) current views about future events. Such forward-looking statements include, but are not limited to, statements about the benefits of the proposed transaction involving OKE and OKS, including future financial
and operating results, OKE's and OKS's plans, objectives, expectations and intentions, the expected timing of completion of the transaction, and other statements that are not historical facts, including future results of
operations, projected cash flow and liquidity, business strategy, expected synergies or cost savings, and other plans and objectives for future operations. No assurances can be given that the forward-looking statements
contained in this presentation will occur as projected and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a
number of risks and uncertainties, many of which are beyond our control, and are not guarantees of future results. Accordingly, there are or will be important factors that could cause actual results to differ materially from
those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. These risks and uncertainties include,
without limitation, the following:
– the ability to obtain the requisite OKE stockholder and OKS unitholder approvals relating to the proposed transaction;
– the risk that OKE or OKS may be unable to obtain governmental and regulatory approvals required for the proposed transaction, if any, or required governmental and regulatory approvals, if any, may
delay the proposed transaction or result in the imposition of conditions that could cause the parties to abandon the proposed transaction;
– the risk that a condition to closing of the proposed transaction may not be satisfied;
– the timing to consummate the proposed transaction;
– the risk that cost savings, tax benefits and any other synergies from the transaction may not be fully realized or may take longer to realize than expected;
– disruption from the transaction may make it more difficult to maintain relationships with customers, employees or suppliers;
– the possible diversion of management time on merger-related issues;
– the impact and outcome of pending and future litigation, including litigation, if any, relating to the proposed transaction;
– the effects of weather and other natural phenomena, including climate change, on OKE’s and/or OKS’ operations, demand for OKE’s or OKS’ services and energy prices;
– competition from other United States and foreign energy suppliers and transporters, as well as alternative forms of energy, including, but not limited to, solar power, wind power, geothermal energy and
biofuels such as ethanol and biodiesel;
– the capital intensive nature of our businesses;
– the profitability of assets or businesses acquired or constructed by us;
– our ability to make cost-saving changes in operations;
– risks of marketing, trading and hedging activities, including the risks of changes in energy prices or the financial condition of our counterparties;
– the uncertainty of estimates, including accruals and costs of environmental remediation;
– the timing and extent of changes in energy commodity prices;
– the effects of changes in governmental policies and regulatory actions, including changes with respect to income and other taxes, pipeline safety, environmental compliance, climate change initiatives
and authorized rates of recovery of natural gas and natural gas transportation costs;
– the impact on drilling and production by factors beyond our control, including the demand for natural gas and crude oil; producers' desire and ability to obtain necessary permits; reserve performance;
and capacity constraints on the pipelines that transport crude oil, natural gas and NGLs from producing areas and our facilit ies;
– difficulties or delays experienced by trucks, railroads or pipelines in delivering products to or from our terminals or pipelines;
– changes in demand for the use of natural gas, NGLs and crude oil because of market conditions caused by concerns about climate change;
– conflicts of interest between OKE, OKS, ONEOK Partners GP, and related parties of OKE, OKS, and ONEOK Partners GP;
– the impact of unforeseen changes in interest rates, equity markets, inflation rates, economic recession and other external factors over which OKE and OKS have no control, including the effect on
pension and postretirement expense and funding resulting from changes in equity and bond market returns;
– our indebtedness could make us vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds and/or place us at competitive disadvantages compared with
our competitors that have less debt, or have other adverse consequences;
– actions by rating agencies concerning the credit ratings of OKE and OKS;
– the results of administrative proceedings and litigation, regulatory actions, rule changes and receipt of expected clearances involving any local, state or federal regulatory body, including the Federal
Energy Regulatory Commission (FERC), the National Transportation Safety Board, the Pipeline and Hazardous Materials Safety Administration (PHMSA), the U.S. Environmental Protection Agency
(EPA) and the U.S. Commodity Futures Trading Commission (CFTC);
– our ability to access capital at competitive rates or on terms acceptable to us;
– risks associated with adequate supply to our gathering, processing, fractionation and pipeline facilities, including production declines that outpace new drilling or extended periods of ethane rejection;
– the risk that material weaknesses or significant deficiencies in our internal controls over financial reporting could emerge or that minor problems could become significant;
– the impact and outcome of pending and future litigation;
– the ability to market pipeline capacity on favorable terms, including the effects of:
• future demand for and prices of natural gas, NGLs and crude oil;
• competitive conditions in the overall energy market;
• availability of supplies of Canadian and United States natural gas and crude oil; and
• availability of additional storage capacity;
– performance of contractual obligations by our customers, service providers, contractors and shippers;
– the timely receipt of approval by applicable governmental entities for construction and operation of our pipeline and other projects and required regulatory clearances;
– our ability to acquire all necessary permits, consents or other approvals in a timely manner, to promptly obtain all necessary materials and supplies required for construction, and to construct gathering,
processing, storage, fractionation and transportation facilities without labor or contractor problems;
Page 3
FORWARD-LOOKING STATEMENTS (CONT’D)
– the mechanical integrity of facilities operated;
– demand for our services in the proximity of our facilities;
– our ability to control operating costs;
– acts of nature, sabotage, terrorism or other similar acts that cause damage to our facilities or our suppliers' or shippers' facil ities;
– economic climate and growth in the geographic areas in which we do business;
– the risk of a prolonged slowdown in growth or decline in the United States or international economies, including liquidity risks in United States or foreign credit markets;
– the impact of recently issued and future accounting updates and other changes in accounting policies;
– the possibility of future terrorist attacks or the possibility or occurrence of an outbreak of, or changes in, hostilities or changes in the political conditions in the Middle East and elsewhere;
– the risk of increased costs for insurance premiums, security or other items as a consequence of terrorist attacks;
– risks associated with pending or possible acquisitions and dispositions, including our ability to finance or integrate any such acquisitions and any regulatory delay or conditions imposed by regulatory
bodies in connection with any such acquisitions and dispositions;
– the impact of uncontracted capacity in our assets being greater or less than expected;
– the ability to recover operating costs and amounts equivalent to income taxes, costs of property, plant and equipment and regulatory assets in our state and FERC-regulated rates;
– the composition and quality of the natural gas and NGLs supplied to OKS’s gathering system, processed in OKS’s plants and transported on OKS’s pipelines;
– the efficiency of our plants in processing natural gas and extracting and fractionating NGLs;
– the impact of potential impairment charges;
– the risk inherent in the use of information systems in our respective businesses, implementation of new software and hardware, and the impact on the timeliness of information for financial reporting;
– our ability to control construction costs and completion schedules of our pipelines and other projects; and
– the risk factors listed in the reports OKE and OKS have filed and may file with the SEC, which are incorporated by reference.
These reports are also available from the sources described above. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Neither OKE nor OKS
undertakes any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the Risk Factors
included in the most recent reports on Form 10-K and Form 10-Q and other documents of OKE and OKS on file with the SEC. OKE's and OKS's SEC filings are available publicly on the SEC's website at www.sec.gov.
This presentation also contains certain historical and forward-looking non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating our
overall financial performance. These non-GAAP measures are broadly used to value and compare companies in our industry. Please also see OKE's website at http://www.oneok.com under "Investors" for reconciliations of
the differences between any historical non-GAAP measures used in this presentation and the most directly comparable GAAP financial measures. Please also see OKS's website at http://www.oneokpartners.com under
"Investors" for reconciliations of the differences between any historical non-GAAP measures used in this presentation and the most directly comparable GAAP financial measures. The GAAP measures most comparable to the
forward-looking non-GAAP financial measures are not accessible on a forward-looking basis and reconciling information is not available without unreasonable effort.
Additional Information And Where To Find It: This communication is not a solicitation of any vote, approval, or proxy from any OKE stockholder or OKS unitholder. In connection with the proposed transaction, OKE filed with
the Securities and Exchange Commission ("SEC") a registration statement on Form S-4, which includes a prospectus of OKE and a joint proxy statement of OKE and OKS. Each of OKE and OKS may also file other
documents with the SEC regarding the proposed transaction. OKE and OKS will each mail the joint proxy statement/prospectus to their respective stockholders and unitholders. This document is not a substitute for any
prospectus, proxy statement or any other document which OKE or OKS may file with the SEC in connection with the proposed transaction. OKE and OKS urge investors and their respective stockholders and unitholders to
read the joint proxy statement/prospectus and other relevant materials filed and to be filed with the SEC regarding the proposed transaction when they become available, as well as other documents filed with the SEC,
because they will contain important information. You may obtain copies of all documents filed with the SEC regarding this transaction (when they become available), free of charge, at the SEC's website (www.sec.gov). You
may also obtain these documents, free of charge, from OKE's website (www.oneok.com) under the tab "Investors" and then under the heading "SEC Filings." You may also obtain these documents, free of charge, from OKS's
website (www.oneokpartners.com) under the tab "Investors" and then under the heading "SEC Filings.“
Participants In The Solicitation: OKE, OKS and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from OKE stockholders and OKS unitholders in
favor of the proposed transaction and related matters. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of OKE stockholders and OKS unitholders in
connection with the proposed transaction are set forth in the joint proxy statement/prospectus filed with the SEC on March 7, 2017. You can find information about OKE's executive officers and directors in its definitive proxy
statement filed with the SEC on April 5, 2016. You can find information about OKS's executive officers and directors in its annual report on Form 10-K filed with the SEC on February 28, 2017. Additional information about
OKE's executive officers and directors and OKS's executive officers and directors can be found in the above-referenced Registration Statement on Form S-4 filed with the SEC. You can obtain free copies of these documents
from OKE and OKS using the contact information above.
This presentation contains factual business information or forward-looking information and is neither an offer to sell nor a solicitation of an offer to buy any securities of ONEOK or ONEOK Partners.
All references in this presentation to financial and volume guidance are based on news releases issued on Feb 1, 2017, and Feb. 27, 2017, and are not being updated or affirmed by this presentation.
Page 4
INDEX
ONEOK-ONEOK Partners Transaction Overview 5
ONEOK Overview 8
ONEOK Guidance 14
Financial Strength 20
Appendix
– STACK and SCOOP 25
– Permian Basin 30
– Williston Basin 34
– Powder River Basin 37
– Business Segments 39
– Natural Gas Liquids 40
– Natural Gas Gathering and Processing 42
– Natural Gas Pipelines 47
– Non-GAAP Reconciliations 49
ONEOK – ONEOK PARTNERS
TRANSACTION OVERVIEW
Page 6
MERGER TRANSACTION SUMMARY
• On Feb. 1, 2017, ONEOK and ONEOK Partners announced a definitive agreement under which
ONEOK will acquire all of the outstanding common units of ONEOK Partners it does not already
own in exchange for ONEOK common stock valued at $9.3 billion as of January 31, 2017
– Each common unit of ONEOK Partners will be converted into 0.985 of a share of ONEOK common stock
– The transaction represents a 22.4 percent premium to the ONEOK Partners closing price on Jan. 27,
2017
• The combined company is expected to receive investment-grade credit ratings (BBB/Baa3)
– ONEOK expects no cash income taxes through at least 2021
– ONEOK Partners would become a wholly owned subsidiary of ONEOK, effectively eliminating its incentive
distribution rights
– ONEOK and ONEOK Partners expect to cross guarantee debt
• ONEOK’s first dividend declared following the closing of the transaction is expected to increase 21
percent with subsequent annual dividend growth of 9 to 11 percent through 2021
– Expect to target dividend coverage of greater than 1.2x
• The transaction is expected to close in the second quarter 2017
– Requires approvals from ONEOK Partners unitholders and ONEOK shareholders
– Registration statement and preliminary joint proxy statement filed March 7
CREATES $30 BILLION ENTERPRISE VALUE COMPANY; LOWERS COST OF FUNDING
Page 7
COMPELLING LONG-TERM VALUE FOR
OKE SHAREHOLDERS & OKS UNITHOLDERS
Investment-grade
credit ratings
• S&P – ONEOK on CreditWatch positive to BBB from BB+
• Moody’s – ONEOK under review for upgrade to Baa3 from Ba1
• Annual dividend coverage target greater than 1.2 times
• Ample cash flow to maintain deleveraging strategy
Improved cost of
funding
• Elimination of incentive distribution rights (IDRs) significantly lowers cost of funding
• Access to a more liquid equity market
• Benefit from larger size of the combined entity
Significant upfront
dividend increase
and higher dividend
rate
• Expected dividend increase of 21 percent to $0.745, or $2.98 per share on an annualized
basis, with expected subsequent dividend growth of 9 to 11 percent annually through 2021
• 22.4 percent premium for ONEOK Partners unitholders per closing price on Jan. 27, 2017
• Expected to be immediately accretive, and then double-digit accretive to distributable cash
flow (DCF) in all years from 2018 through 2021
• $14 billion tax basis step-up that is expected to provide a cash income tax deferral
• No cash income taxes expected through at least 2021
• Expect significantly increased cash flow
No cash income
taxes
ONEOK
OVERVIEW
Page 9
• 37,000-mile network of natural gas
liquids and natural gas pipelines
• Provides midstream services to
producers, processors and customers
• Supply in attractive basins
• Significant basin diversification across
asset footprint
• Growth expected to be fueled by:
– Industry fundamentals from increased
producer activity
– Highly productive basins
– Increased ethane demand from the
petrochemical industry and increased
NGL exports
ONEOK OVERVIEW
EXTENSIVE. INTEGRATED. RELIABLE. DIVERSIFIED.
Natural Gas Gathering & Processing
Natural Gas Pipelines
Natural Gas Liquids
Page 10
• Volume risk
– Exists primarily in natural gas gathering and processing
and natural gas liquids segments
• Ethane opportunity impacts the natural gas liquids
segment
– Mitigated by supply and market diversity, firm-based, frac-
or-pay and ship-or-pay contracts
– Mitigated by significant acreage dedications in the core
areas of the basins we operate in
• Commodity price risk significantly reduced
– Recontracting efforts increased fee-based earnings and
decreased commodity exposure
– Remaining commodity exposure mitigated by hedging
• Price differential risk
– NGL location price differentials between Mid-Continent and
Gulf Coast and product price differentials
– Optimization expected to be less of a contributor
• Assets can be utilized to capture location and product price
differentials
ONEOK SOURCES OF EARNINGS
CONTINUED FEE-BASED GROWTH ACROSS MULTIPLE SUPPLY BASINS AND MARKETS
66% 66%
83% 89%
~ 90%
23% 22%
12%
7% ~ 5% 11% 12%
5% 4% ~ 5%
2013 2014 2015 2016 2017G
Fee Commodity Differential
Sources of Earnings
($ in billions)
$1.7 B $2.1 B $2.1 B ~ $2.8 B $2.6 B
Page 11
NATURAL GAS LIQUIDS
• Exchange Services - Primarily fee based
– Gather, fractionate and transport raw NGL feed to
storage and market hubs
• Transportation & Storage Services - Fee based
– Transport NGL products to market centers and
provide storage services for NGL products
• Marketing - Differential based
– Purchase for resale approximately 70% of
fractionator supply on an index-related basis and
truck and rail services
• Optimization - Differential based
– Obtain highest product price by directing product
movement between market hubs and convert
normal butane to iso-butane
PREDOMINANTLY FEE BASED
Focused on increasing fee-based
exchange-services earnings
7% 10% 5% 5% < 5%
8%
9%
5% 4% ~ 5%
15%
12%
12% 11% ~ 10%
70%
69%
78%
80% > 80%
2013 2014 2015 2016 2017G
Exchange Services
Transportation &
Storage
Marketing
Optimization
Page 12
• Achieved increased fee-based contract mix by restructuring percent-of-proceeds (POP) contracts with a
fee component to include a higher fee rate
– Increasing fee-based earnings while providing enhanced services to customers
– Average fee rate increased more than 50 percent between the fourth quarter 2015 and fourth quarter 2016
– Expect fee rate to average approximately 80 cents in 2017 with fluctuations due to volume and contract mix
NATURAL GAS GATHERING AND PROCESSING
PRIMARILY FEE BASED
Contract Mix by Earnings
34% 33%
56%
80% >75%
66% 67%
44%
20% <25%
2013 2014 2015 2016 2017G
Fee Based Commodity
$0.43
$0.55
$0.68 $0.76 $0.76
$0.84
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Average Fee Rate per MMBtu
Average Fee Rate
95% increase Q3 2015 – Q4 2016
Page 13
• Nearly 100 percent of earnings is firm, fee-based
• Firm demand-based contracts serving primarily
investment-grade utility customers
• Roadrunner Gas Transmission pipeline project
and WesTex pipeline expansion enhance export
capability to Mexico
– Completed in 2016
– Contract terms of 25 years
• Fee-based earnings further enhanced with the
completion of a natural gas compressor station
project on Midwestern Gas Transmission in 2016
• Constructing a 25-mile natural gas pipeline
providing transportation and storage services to
an electric generation plant in Oklahoma
– Supported by a long-term, fee-based agreement
NATURAL GAS PIPELINES
PREDOMINANTLY FEE BASED
96% 92%
98% 96% ~ 97%
4% 8%
2% 4% ~ 3%
2013 2014 2015 2016 2017G
Fee Based Commodity
Sources of Earnings
ONEOK GUIDANCE
Page 15
OKE FINANCIAL GUIDANCE SUMMARY
• Net income range*: $575 million – $755 million
• Adjusted EBITDA range: $1,870 million –
$2,130 million
• Distributable Cash Flow: $1,245 million –
$1,505 million
– Target dividend coverage ratio of 1.20 times or
greater
• Capital expenditures: $520 million - $640
million
– Growth: $380 million - $480 million
– Maintenance: $140 million - $160 million
• Capital expenditures by segment:
– NGL: $215 million - $260 million
– NGGP: $215 million - $260 million
– NGP: $80 million - $105 million
– Other: $10 million - $15 million
*Assumes ONEOK’s acquisition of ONEOK Partners effective Jan. 1, 2017
**Expected first quarterly dividend following completion of OKE-OKS transaction, annualized
$1.48
$2.13 $2.43 $2.46
$2.98
2013 2014 2015 2016 Annualized
Dividend**
Dividends Paid Per Share Per Year
19% CAGR since 2013
2017
Page 16
• 2017 volume growth expected to be driven by the six new natural gas processing plants connected in 2016 and increased drilling
in NGL-rich shale plays, particularly the STACK and SCOOP plays and the Permian Basin
• 2017 expected processing plant connections
– Mid-Continent region (3), Permian Basin (2), Rocky Mountain region (1)
– Increases total processing plant connections to nearly 200
• Ethane recovery expected to average 35,000 – 55,000 bpd higher in 2017 compared with 2016
– Providing $40 million - $60 million of adjusted EBITDA growth
• Volume growth weighted towards second-half of the year
NATURAL GAS LIQUIDS
2017 VOLUME
533
769 770
105
155 175
2014 2015 2016 2017G
Gathered Volume Ethane Opportunity
522 552 586
105
155
175
2014 2015 2016 2017G
Fractionation Ethane Opportunity
Gathered Volume (MBbl/d) Fractionation Volume (MBbl/d)
120-140
800-900 120-140
575-635
Page 17
487 662
780
917
862
781
1,404
1,524 1,561
2014 2015 2016 2017G*
Gathered Volumes (MMcf/d)
NATURAL GAS GATHERING AND PROCESSING
2017 VOLUME
Mid-Continent
• Accelerated producer activity expected in the STACK and
SCOOP plays
– 10-12 rigs on ONEOK dedicated acreage compared with 3-4 at
2016 lowest point
• Approximately 100 MMcf/d of available processing
capacity in the STACK and SCOOP areas
• 2017 volumes expected to increase significantly in the
second half of the year
1,500 – 1,650
740-800
760-850
442
622
756
755
658
653
1,197
1,280
1,409
2014 2015 2016 2017G**
Processed Volumes (MMcf/d)
Mid-Continent
Rocky Mountain
1,400 – 1,550
660–750
740–800
*2017 guidance gathered volumes (BBtu/d):1,950-2,150
**2017 guidance processed volumes (BBtu/d):1,850-2,050
Williston Basin
• 2017 volumes expected to increase from accelerated
well completions and rig activity, and a ramp up of
projects completed in 2016
– 23-25 rigs on ONEOK dedicated acreage
– Approximately 400 well connects expected in 2017
• Approximately 200 MMcf/d available processing
capacity
• Approximately 300 DUCs on ONEOK’s acreage
Page 18
• ONEOK’s NGL infrastructure already connects supply to Gulf Coast region
‒ Incremental ethane transported and fractionated volume potential of 175,000 – 200,000 bpd
‒ Potential annual earnings uplift from full ethane recovery estimated to be approximately $200 million
• More than $170 million from the Mid-Continent
• Basins closer to market hubs will likely be the first to recover ethane
• Incremental ethane opportunity for ONEOK by basin:
‒ Mid-Continent: ~140,000 bpd
‒ Williston Basin: ~35,000 bpd
‒ Permian: ~10,000 bpd
ETHANE RECOVERY BY BASIN
INCREMENTAL ETHANE DEMAND
ONEOK NGL assets
Williston Basin/
Rockies
Mid-Continent
Permian Basin
Eagle Ford
Shale
Appalachia
1
1
1
2
2
2 3
3
Ethane
Supply
Expected
Timing
Expected Incremental
Petrochemical and
Export Capacity*
1 2Q2016 – 1Q2017 296,000 bpd
2 2Q2017 – 4Q2017 308,000 bpd
3 1Q2018 – 1Q2020 282,000 bpd
Total 886,000 bpd
* As of March 2017
Page 19
PROJECTS UNDER DEVELOPMENT
• Project backlog: evenly distributed between ONEOK’s three business segments
– Target adjusted EBITDA multiples of five to seven times
• Future growth across multiple supply basins and major market areas
• Backlog of unannounced growth projects includes:
– NGL pipelines, fractionation and storage facilities
– Natural gas pipelines
– Natural gas processing plants
– NGL and natural gas export infrastructure
• High-return projects requiring minimal capital investments between 2017-2021, including:
– Well connections
– Compression infrastructure
– Natural gas processing plant connections
– Market connections
• Projects will be announced as commitments from producers/processors/end-users are secured
$1.5 BILLION TO $2.5 BILLION – PRIMARILY FEE BASED
FINANCIAL STRENGTH
Page 21
OKE – STRONG BALANCE SHEET
• Leverage target
– GAAP debt-to-EBITDA ratio < 4.0x
• Committed to taking necessary steps to
maintain investment-grade credit ratings
• Expected credit ratings:
– S&P: BBB
– Moody’s: Baa3
• Expected $2.5 billion revolving credit facility
COMMITTED TO INVESTMENT-GRADE CREDIT RATING
$1.2
$1.5
$1.6
$1.8
$2.0
2013 2014 2015 2016 2017G
OKE Adjusted EBITDA Growth
($ in Billions)
Adjusted EBITDA
5.9x
5.4x
5.8x
5.2x
4.7x
2013 2014 2015 2016 2017G
OKE Consolidated GAAP
Debt-to-EBITDA Ratio
GAAP Debt-to-EBITDA Ratio
Page 22
TOTAL SHAREHOLDER RETURN
• Long-term investors have experienced high returns from ONEOK
– 10-year returns far exceeded the S&P 500 Index
• 2016 returns outperformed the S&P 500 Index
ONEOK – DELIVERING LONG-TERM VALUE
Note: Total return as of Dec. 31, 2016
357%
88%
149%
96% 98%
12%
10-year5-year1-year
ONEOK S&P 500 Index
APPENDIX
Page 24
2
4
1
5
3
ONEOK GROWTH: 2006 – 2016
$9 BILLION INVESTED IN INFRASTRUCTURE WITH ROOM FOR GROWTH
1. Bakken/Williston Basin
• Plants: Garden Creek I, II and III; Grasslands
Plant Expansion; Stateline I and II; Lonesome
Creek; and Bear Creek
• Bakken NGL Pipeline and Expansion Phase I
• Stateline de-ethanizers
• Field Compression and Related Infrastructure
• Divide County Gathering System
• Related NGL Infrastructure
2. Niobrara/Powder River Basin
• Niobrara NGL Lateral
• OPPL Expansion
• Sage Creek and NGL Infrastructure Acquisition
5. Mid-Continent Region
• Canadian Valley Plant
• NGL Plant Connections
• Bushton Fractionator Expansion
• NGL Pipeline and Hutchinson
Fractionator Infrastructure
• Maysville Plant Acquisition
4. Permian Basin and Gulf Coast
• Roadrunner Gas Transmission Pipeline
• WesTex Transmission Pipeline Expansion
• Sterling I Expansion
• Sterling I and II Reconfiguration
• Sterling III and Arbuckle Pipelines
• MB II and III Fractionators
• Mont Belvieu E/P Splitter
• Ethane Header Pipeline
• West Texas LPG Pipeline System Acquisition
3. Midwest Region
• MGT Compressor Station
• Midwestern Extension
• Guardian II Expansion
• North System Acquisition
Natural Gas Gathering & Processing
Natural Gas Pipelines
Natural Gas Liquids
Completed Growth Projects and Acquisitions
STACK AND SCOOP
Page 26
STACK AND SCOOP PLAYS*
RELIABLE FULL-SERVICE PROVIDER
Natural Gas Liquids
• Approximately 100 third-party plant connections in
Mid-Continent
• Incremental 100,000 bpd of expected supply by
2019
– 40,000 bpd of available gathering capacity;
expandable to 100,000 bpd with less than $100
million of capital expenditures
Natural Gas Gathering and Processing
• Access to nearly 700 MMcf/d of processing
capacity through integrated asset network
• Approximately 100 MMcf/d of natural gas
processing capacity available in Oklahoma
Natural Gas Pipelines
• Extensive pipeline footprint across the region
• Flexibility from approximately 50 Bcf of storage
capacity
• Opportunities to match supply with markets
Natural Gas Liquids Natural Gas Gathering & Processing Natural Gas Pipelines
*STACK: Sooner Trend (oil field), Anadarko (basin), Canadian and Kingfisher (counties)
*SCOOP: South Central Oklahoma Oil Province
Page 27
STACK AND SCOOP PLAYS
FULL-SERVICE CAPABILITY
Natural Gas Liquids
• Currently gathering approximately
150,000 – 200,000 bpd of NGLs
• Three new processing plant connections
in the STACK and SCOOP expected by
the end of 2017
• Expect an incremental 100,000 bpd of
NGLs gathered by the end of 2019
• More than 110 existing plant connections
in the Mid-Continent
• Approximately 40,000 bpd of available
gathering capacity
‒ Expandable to 100,000 bpd with less
than $100 million of capital
expenditures Third-Party Plant Connections ONEOK Plants Natural Gas Liquids
Page 28
STACK AND SCOOP PLAYS
WELL-POSITIONED GATHERING AND PROCESSING ASSETS
Natural Gas Gathering and Processing
• Approximately 200,000 acres dedicated
to ONEOK in the STACK
• Well completions expected to increase
• Producers are seeing some wells
average 8 to 10 MMcf/d initial production
rates
• Integrated network of plants with a total
capacity of nearly 700 MMcf/d
• Approximately 100 MMcf/d of available
capacity
Natural Gas Gathering and Processing Pipelines ONEOK Plants
Page 29
STACK AND SCOOP PLAYS
PROVIDING CONNECTIVITY
Natural Gas Pipelines
• Connected to 34 natural gas processing
plants in Oklahoma with a total capacity of
1.8 Bcf/d
• Access to on-system utility and industrial
markets with peak demand of
approximately 2.4 Bcf/d
• Westbound expansion of ONEOK Gas
Transmission Pipeline out of the STACK
‒ Firm commitment for 100 MMcf/d
secured
‒ Initial expansion design consists of
adding compression
‒ Ongoing market discussions to scale
up project by adding compression
• Approximately 50 Bcf of natural gas
storage capacity in Oklahoma
Natural Gas Pipelines Third-Party Plant Connections
ONEOK Plants Natural Gas Storage
PERMIAN BASIN
Page 31
PERMIAN BASIN
RELIABLE SERVICE PROVIDER
Natural Gas Liquids
• Nearly 40 third-party natural gas processing plant
connections in the Permian Basin
• Two new natural gas processing plant connections
in the Permian Basin expected in 2017
• West Texas LPG pipeline system expandable
through additional pump stations and pipeline
looping
Natural Gas Pipelines
• Connected to 22 natural gas processing plants in
the Permian Basin with a total capacity of 1.9
Bcf/d
• Access to on-system utility and industrial markets
with peak demand of approximately 1.5 Bcf/d
• Completed capital projects in 2016:
– Roadrunner Phase I and II totaling
570 MMcf/d of capacity
– WesTex Transmission Pipeline adding
260 MMcf/d of capacity
• 4 Bcf of active natural gas storage capacity in
Texas
Natural Gas Liquids
Natural Gas Pipelines
Third-party Plant Connections
Natural Gas Storage
Roadrunner Gas
Transmission
Page 32
PERMIAN BASIN
FULL-SERVICE CAPABILITY
Natural Gas Liquids
• Well-positioned near NGL-rich
Delaware and Midland Basins
• Extensive network of natural gas
liquids pipelines connecting supply to
Gulf Coast and Conway, Kansas,
market centers
• Potential to offer transportation and
fractionation services to new
customers in the basin
Natural Gas Liquids Third-party Plant Connections
Page 33
PERMIAN BASIN
PROVIDING CONNECTIVITY
Natural Gas Pipelines
• Connected to 22 natural gas processing plants in
the Permian Basin with a total capacity of 1.9 Bcf/d
• Well-positioned in the Delaware Basin with a
significant position in the Midland Basin
• 2,500-mile network of natural gas pipelines and
storage connecting Mid-Continent and Permian
Basin supply with natural gas utility and industrial
markets in Texas and Mexico
• ONEOK WesTex provides access to Waha Hub
pipelines for liquidity and transaction capabilities
Natural Gas Pipelines ONEOK Plant Connections
Natural Gas Storage
Roadrunner Gas
Transmission
ONEOK’s WesTex Waha Hub
El Paso Southern Union
Enterprise Atmos
Energy Transfer TransWestern
Oasis Northern Natural
Roadrunner CFE Hub (pending)
Third-party Plant Connections
WILLISTON BASIN
Page 35
WILLISTON BASIN
PROVIDING VALUABLE TAKEAWAY CAPACITY
Natural Gas Liquids
• Four third-party natural gas processing plant
connections in the Williston Basin
• Bakken NGL Pipeline expandable to 160,000 bpd
with additional pump stations, expected in the third
quarter 2018
• Highest margin NGL barrel with average bundled
fee rates of more than 30 cents per gallon
• Approximately 35,000 bpd incremental ethane
opportunity
Natural Gas Pipelines
• 2.4 Bcf/d of long-haul natural gas transportation
capacity through ONEOK’s 50 percent ownership
in Northern Border Pipeline
• Northern Border Pipeline provides the most
economical capacity route out of the Williston
Basin
Natural Gas Liquids
Natural Gas Pipelines
Third-party Plant Connections
Page 36
WILLISTON BASIN
COMPETITIVELY ADVANTAGED ASSET FOOTPRINT
Natural Gas Gathering and Processing
• More than 3 million acres dedicated to ONEOK
– Approximately 1 million acres in the core
• Nearly 1 Bcf/d natural gas processing capacity
– More than 200 MMcf/d available
• Seeing increased drilling activity in the basin, with
approximately 23-25 rigs running on ONEOK’s
dedicated acreage
• Approximately 300 drilled but uncompleted wells
(DUCs) on acreage
• 65 new well connections in the fourth quarter 2016
• Higher gas-to-oil (GOR) ratios in the core of the
basin where completion activities are highest
• 80 MMcf/d Bear Creek natural gas processing
plant completed in August 2016
ONEOK Natural Gas
Processing Plants
Natural Gas Gathering and Processing
Pipelines
POWDER RIVER
BASIN
Page 38
POWDER RIVER BASIN
PROVIDING VALUABLE TAKEAWAY CAPACITY
Natural Gas Liquids
• Assets located in NGL-rich Niobrara, Sussex
and Turner formations
• NGL takeaway through the Bakken NGL
Pipeline and Overland Pass Pipeline
• 2 third-party natural gas processing plant
connections
Natural Gas Gathering and Processing
• Approximately 130,000 acres dedicated to
ONEOK
• 50 MMcf/d processing capacity at the Sage
Creek natural gas processing plant
• Integrated assets and value chain with natural
gas liquids segment
Third-party Plant
ONEOK Plant Natural Gas Liquids
Natural Gas Gathering and Processing
BUSINESS SEGMENTS
NATURAL GAS LIQUIDS
Page 41
• Provides fee-based services to natural gas processors and
customers
– Gathering, fractionation, transportation, marketing and storage
• Extensive NGL gathering system
– Connected to nearly 200 natural gas processing plants in the
Mid-Continent, Barnett Shale, Rocky Mountain regions and
Permian Basin
• Represents 90 percent of pipeline-connected natural gas
processing plants located in Mid-Continent
– Well positioned to capture growth in
SCOOP/STACK and Cana-Woodford
• Contracted NGL volumes exceed physical volumes –
minimum volume commitments
• Extensive NGL fractionation system
– Fractionation capacity near two market hubs
• Conway, KS and Medford, OK – 500,000 bpd capacity
• Mont Belvieu, TX – 340,000 bpd capacity
• Bakken NGL Pipeline offers exclusive pipeline takeaway from the
Williston Basin
• Links key NGL market centers at Conway, Kansas, and Mont
Belvieu, Texas
• North System supplies Midwest refineries and propane markets
NATURAL GAS LIQUIDS
ONE OF THE LARGEST IN THE U.S.
Fractionation 840,000 bpd net capacity
Isomerization 9,000 bpd capacity
E/P Splitter 40,000 bpd
Storage 26 MMBbl capacity
Distribution 4,380 miles of pipe with
1,060 mbpd capacity
Gathering –
Raw Feed
7,140 miles of pipe with
1,485 MBpd capacity
As of Dec. 31, 2016
NGL Gathering Pipelines
NGL Distribution Pipelines
NGL Market Hub
NGL Fractionator
Overland Pass Pipeline (50% interest)
NGL Storage
NATURAL GAS GATHERING
AND PROCESSING
Page 43
• Provides gathering, compression, treating and
processing services to producers
• Diverse contract portfolio
– More than 2,000 contracts
– Percent of proceeds (POP) with fees
• Restructured significant POP with fee
contracts to include a larger fee
component
• Natural gas supplies from three core areas:
– Williston Basin
• Includes oil, natural gas and natural gas liquids in
the Bakken and Three Forks formations
– Mid-Continent
• STACK
• SCOOP
• Cana-Woodford Shale
• Mississippian Lime
• Granite Wash, Hugoton, Central Kansas Uplift
– Powder River Basin
• Crude oil and NGL-rich Niobrara, Sussex and
Turner formations
NATURAL GAS GATHERING AND PROCESSING
SERVING PRODUCERS IN KEY BASINS
Gathering pipelines
Natural gas processing plant
Gathering 18,900 miles of pipe
Processing 21 active plants
1,830 MMcf/d capacity
Volumes
2,030 BBtu/d or 1,560 MMcf/d gathered
1,880 BBtu/d or 1,410 MMcf/d processed;
865 BBtu/d residue gas sold
160 MBbl/d NGLs sold
As of Dec. 31, 2016
Page 44
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0%
5%
10%
15%
20%
25%
30%
35%
40%
2010 2011 2012 2013 2014 2015 2016 2017
Gas Produced Percent of Gas Flared
WILLISTON BASIN
INCREASED GAS CAPTURE AND VOLUME BACKLOG BENEFITS ONEOK
P
erce
nt
Flare
d M
M
cf
/d P
ro
duced
North Dakota Natural Gas Produced and Flared
Source: NDIC Department of Mineral Resources
• Increased natural gas capture results in increased NGL and natural gas value uplift
• Approximately 88% of North Dakota’s natural gas production was captured in January 2017
• North Dakota Industrial Commission (NDIC) policy targets:
– Increase natural gas capture to: 85% by Nov. 2016; 88% by Nov. 2018; and 91% by Nov. 2020
• January statewide flaring was approximately 190 MMcf/d, with nearly 60-70 MMcf/d estimated to be on ONEOK’s dedicated acreage
• Producer customers are more incentivized to increase natural gas capture rates to maximize the value of wells drilled
Page 45
NATURAL GAS GATHERING AND PROCESSING
COMMODITY PRICE RISK MITIGATION
Year Ending December 31, 2017
Commodity Volumes Hedged Average Price Percent Hedged
Natural Gas* (MMBtu/d) 73,100 $2.63 / MMBtu 97%
Condensate (bpd) 1,800 $44.88 / Bbl 72%
Natural Gas Liquids** (bpd) 8,000 $0.51 / gallon 91%
* Natural gas prices represent a combination of hedges at various basis locations
**NGLs hedged reflect propane, normal butane, iso-butane and natural gasoline only. The ethane component of the equity NGL volume is
not hedged and not expected to be material to ONEOK’s results of operations
Volumes hedged as of Dec. 31, 2016.
Year Ending December 31, 2018
Commodity Volumes Hedged Average Price Percent Hedged
Natural Gas* (MMBtu/d) 49,700 $2.80 / MMBtu 74%
Condensate (bpd) 600 $56.80 / Bbl 25%
Natural Gas Liquids** (bpd) 1,900 $0.68 / gallon 22%
Page 46
NATURAL GAS GATHERING AND PROCESSING
COMMODITY PRICE SENSITIVITIES AFTER HEDGING*
*As of Dec. 31, 2016
**Three-month forward-looking sensitivities net of hedges in place
***Full-year forward-looking sensitivities net of hedges in place
Earnings Impact*
($ in Millions)
Commodity Sensitivity 2017**
Natural Gas $0.10 / MMBtu $0.1
Natural Gas Liquids $0.01 / gallon $0.4
Crude Oil $1.00 / barrel $0.4
NATURAL GAS
PIPELINES
Page 48
• Predominantly fee-based income
• 92% of transportation capacity contracted
under firm demand-based rates in 2016
• 82% of contracted system transportation
capacity serves end-use markets in 2016
‒ Connected directly to end-use markets
• Local natural gas distribution companies
• Electric-generation facilities
• Large industrial companies
• 65% of storage capacity contracted under
firm, fee-based arrangements in 2016
NATURAL GAS PIPELINES
CONNECTIVITY TO KEY MARKETS
Natural Gas Interstate Pipeline
Natural Gas Intrastate Pipeline
Natural Gas Storage
Northern Border Pipeline (50% interest)
Roadrunner Gas Transmission (50% interest)
Pipelines 6,700 miles, 6.9 Bcf/d peak capacity
Storage 58 Bcf active working capacity
As of Dec. 31, 2016
NON-GAAP
RECONCILIATIONS
Page 50
NON-GAAP RECONCILIATIONS
ONEOK, Inc.
ONEOK has disclosed in this presentation expected 2017 adjusted EBITDA and distributable cash flow (DCF), which are non-GAAP financial metrics, used
to measure ONEOK’s financial performance, and are defined as follows:
Adjusted EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, income taxes, non-cash share-based compensation
and allowance for equity funds used during construction and certain other items; and
Distributable cash flow is defined as adjusted EBITDA, computed as described above, less interest expense, maintenance capital expenditures and equity
earnings from investments, excluding noncash impairment charges, adjusted for cash distributions received from unconsolidated affiliates and certain other
items.
These non-GAAP financial measures described above are useful to investors because they are used by many companies in the industry as a measurement
of financial performance and are commonly employed by financial analysts and others to evaluate our financial performance and to compare our financial
performance with the performance of other companies within our industry. Adjusted EBITDA and DCF and should not be considered in isolation or as a
substitute for net income or any other measure of financial performance presented in accordance with GAAP.
These non-GAAP financial measures exclude some, but not all, items that affect net income. Additionally, these calculations may not be comparable with
similarly titled measures of other companies. Furthermore, these non-GAAP measures should not be viewed as indicative of the actual amount of cash that
is available for dividends or that is planned to be distributed in a given period.
Page 51
OKE NON-GAAP RECONCILIATION
NET INCOME TO ADJUSTED EBITDA
($ in Millions) 2013 2014 2015 2016
Reconciliation of Net Income to Adjusted EBITDA
Net income from continuing operations $589 $669 $385 $746
Interest expense, net of capitalized interest 271 356 417 470
Depreciation and amortization 239 295 355 392
Income taxes 166 151 136 212
Impairment charges - 76 264 -
Allowance for equity funds used during construction and other (49) (20) 3 9
Adjusted EBITDA $ 1,216 $1,527 $1,560 $1,829
Page 52
OKE NON-GAAP RECONCILIATION
NET INCOME TO ADJUSTED EBITDA AND DCF
2017 Guidance Range
Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow
Excludes one-time transaction fees associated with the acquisition of ONEOK Partners
(Millions of dollars)
Net income (a) $ 575 - $ 755
Interest expense, net of capitalized interest 515 - 485
Depreciation and amortization 405 - 415
Income tax expense (a) 330 - 440
Non-cash share-based compensation expense 40 - 30
Allowance for equity funds used during construction and other 5 - 5
Adjusted EBITDA 1,870 - 2,130
Interest expense, net of capitalized interest (515) - (485)
Maintenance capital (140) - (160)
Equity in net earnings from investments (150) - (170)
Distributions received from unconsolidated affiliates 190 - 210
Other (10) - (20)
Distributable cash flow $ 1,245 - $ 1,505
(a) Assumes ONEOK’s acquisition of ONEOK Partners effective Jan. 1, 2017
