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.
2 0 1 6 A N N U A L R E P O R T
RELIABLE. INTEGRATED. PROVEN.
ONEOK, Inc. (pronounced ONE-OAK) (NYSE: OKE) is the general partner and as of Dec. 31, 2016, owns 41.2 percent
of ONEOK Partners, L.P. (NYSE: OKS), one of the largest publicly traded master limited partnerships, which 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. ONEOK is a FORTUNE 500 company and is included in Standard & Poor’s
(S&P) 500 index.
† Dividends declared for the quarter and paid in the following quarter.
On the cover: Bear Creek Natural Gas Processing Plant, North Dakota
Year ended Dec. 31 2016 2015 2014
Consolidated financial information (millions of dollars)
Operating income $ 1,285.7 $ 996.2 $ 1,143.6
Net income $ 743.5 $ 379.2 $ 663.1
Net income attributable to ONEOK, Inc. $ 352.0 $ 245.0 $ 314.1
Distributions received from ONEOK Partners $ 790.1 $ 706.3 $ 605.3
Total assets $ 16,138.8 $ 15,446.1 $ 15,261.8
Common stock data
Shares outstanding 210,681,661 209,731,028 208,322,247
Data per common share
Earnings per share from continuing operations – basic $ 1.68 $ 1.19 $ 1.53
Earnings per share from continuing operations – diluted $ 1.67 $ 1.19 $ 1.52
Dividends declared† $ 2.46 $ 2.43 $ 2.125
Market price range
High $ 59.03 $ 51.07 $ 70.98
Low $ 19.62 $ 18.93 $ 44.30
Year-end $ 57.41 $ 24.66 $ 49.79
ONEOK FINANCIAL HIGHLIGHTS
At ONEOK and ONEOK Partners, an
important measurement of company
success is the value we create for
our investors. Our ability to create
value rests in our integrated asset
footprint, long-term growth projects,
stable cash flows and attractive
investment opportunities.
With long-term value creation in
mind, we recently took an important
step toward enhancing our ability
to fund our future capital needs
over the long term as we continue
to grow.
In February 2017, ONEOK
announced plans to acquire the
remaining approximately 60 percent
public stake in ONEOK Partners –
creating a stand-alone operating
company with an estimated
$30 billion enterprise value and
lower cost of funding. Following
the merger, we expect to be even
more competitive as we continue
executing on our growth strategies.
Completing this transaction now
underscores the strategic value
we place on the business we have
successfully built since venturing
into the midstream space nearly
20 years ago.
We have performed well in a
tough environment; however,
this transaction positions
ONEOK for continued success
through expected:
• Improved access to broader
capital markets to fund future
growth opportunities;
• Strong dividend coverage over
the long term;
• Lower cost of funding with the
elimination of incentive distribution
rights; and
• No cash income taxes through at
least 2021.
We believe this transaction,
which we expect to complete in
the second quarter 2017, represents
a tremendous opportunity for
current ONEOK shareholders and
ONEOK Partners unitholders, who
will participate in the upside as
future shareholders.
We announced an expected
dividend increase to 74.5 cents per
share in the first quarter following
the close of the transaction, a
21 percent increase compared
with the fourth quarter 2016. We
also anticipate a subsequent
9 to 11 percent annual dividend
growth rate through 2021.
This transaction doesn’t change
our core businesses or our goal
to continue growing as one of
North America’s largest midstream
service providers; in fact, it enhances
them. We remain focused on
safely and reliably operating
our 37,000-mile, integrated network
of natural gas liquids (NGL) and
natural gas pipelines stretching
from the Canadian border to the
Texas Gulf Coast.
ONEOK TO ACQUIRE ONEOK PARTNERS –
TRANSACTION VALUED AT $17 BILLION
A L E T T E R T O O U R I N V E S T O R S
G A R D E N C R E E K
Natural Gas Processing Plant
North Dakota
SUCCESS
We continue to take advantage of
our integrated assets to enhance the
quality and reliability of services we
provide and the value we create for
our customers and investors.
We had a number of significant
successes in 2016:
• Realized increased NGL and
natural gas volumes by serving
our expanded customer base
compared with 2015;
• Increased fee-based earnings
by more than $140 million from
contract restructuring in
the natural gas gathering and
processing segment, bringing
fee-based earnings to more than
85 percent for ONEOK;
• Increased natural gas processing
capacity in the Williston Basin
to nearly 1 billion cubic feet per
day (Bcf/d);
• Connected new markets with
new supply in the Delaware and
Midland basins in West Texas
through growth projects like our
Roadrunner Gas Transmission
Pipeline and the expansion of our
WesTex Transmission Pipeline
system; and
• Connected six new processing
plants to our NGL system.
We invite you to read in the following
pages about our operations in three
of the most active regions of the
country – the STACK and SCOOP
plays in Oklahoma, the Permian
Basin in West Texas and the
Williston Basin in North Dakota –
and how we have executed on our
growth strategy in these areas over
the past year. Financial statements
may be found in the Form 10-K at
the end of this report.
INTEGRATION DRIVES
NATURAL GAS PROCESSING CAPACITY: 1,830 MMCF/D
MILES OF PIPELINE: > 37,000
NATURAL GAS STORAGE CAPACITY: 57.8 BCF
NGL STORAGE CAPACITY: 26.2 MMBBL
FRACTIONATION CAPACITY: 840,000 BPD
ASSET OVERVIEW
L O N E S O M E C R E E K
Natural Gas Processing Plant
North Dakota
GLOSSARY
MMcf/d: Million cubic feet per day
Bcf: Billion cubic feet
MMBbl: Million barrels
Bpd: Barrels per day
2
Natural Gas Gathering
Pipelines
Natural Gas Processing Plant
NGL Pipelines
NGL Fractionator
NGL Storage
50 Percent Interest
Natural Gas Pipelines
Natural Gas Storage
ASSET OVERVIEW
ONEOK PARTNERS ASSETS
O K L A H O M A
T E X A S
N E W M E X I C O
I L L I N O I S
I N D I A N A
K E N T U C K Y
T E N N E S S E E
M I N N E S O T A
I O W A
M I S S O U R I
A R K A N S A S
L O U I S I A N A
W I S C O N S I N
N O R T H D A K O T A
S O U T H D A K O T A
N E B R A S K A
C O L O R A D O
K A N S A S
M O N T A N A
W Y O M I N G
ONEOK’S 2016 FINANCIAL PERFORMANCE
AND 2017 GUIDANCE
ONEOK’s 2016 financial performance
benefited as a result of ONEOK
Partners increasing net income and
adjusted earnings before interest,
taxes, depreciation and amortization
(EBITDA) nearly 81 and 18 percent,
respectively, compared with 2015,
driven by higher fee-based earnings
in all three business segments.
ONEOK ended 2016 with nearly
$250 million of cash and cash
equivalents, an undrawn $300 million
credit facility and full-year dividend
coverage of greater than 1.3 times.
ONEOK also was the second-best
performing stock in the Standard &
Poor’s (S&P) 500 index, increasing
133 percent in 2016.
Following the completion of the
ONEOK Partners transaction,
ONEOK will be well-positioned
to profitably grow its existing
businesses while creating significant
value for our shareholders, old and
new. ONEOK expects:
• Distributable cash flow to
approximately double;
• A dividend coverage target of
greater than 1.2 times;
• A dividend increase of 21 percent
to 74.5 cents per share, or
$2.98 per share on an annualized
basis, for the first dividend
following the close of the
transaction; and
• A subsequent 9 to 11 percent
annual dividend growth rate
through 2021.
We expect the combined entity to
receive investment-grade credit
ratings, and expect the significant
retained cash flow and earnings
growth to continue our progress
toward improved credit metrics.
All of these benefits will serve
our investors well as we continue
to focus on growing our business
and serving our customers.
As of Dec. 31, 2016
*Total return represents share-price appreciation and the reinvestment of dividends.
1-YEAR
ONEOK, Inc. S&P 500
12%
200%
150%
100%
50%
0%
ONEOK annual dividends paid per share (split adjusted)
**Expected first quarterly dividend following completion of OKE-OKS transaction; annualized
ONEOK Partners, L.P.
(billions of dollars)
Attributable to ONEOK Partners, L.P.
(millions of dollars)
$1.00 $500
$1.50 $600
$2.00
$700
$2.50
$800
$3.00
$900
$3.50
$1000
$1100
A
N
N
U
A
LI
ZE
D
D
IV
ID
EN
D
**
DIVIDEND GROWTH
$1.4
$1.5
$1.6
$1.7
$1.8
$1.9
20
14
20
15
20
16
20
14
20
15
20
16
NET INCOME ADJUSTED EBITDA GROWTH
20
12
20
13
20
14
20
15
20
16
$1.27 $1.48 $2.125 $2.43 $2.46 $2.98 $910.3 $589.5 $1,066.8 $1.56 $1.57 $1.84
TOTAL RETURN*
149%
5-YEAR
ONEOK, Inc. S&P 500
200%
150%
100%
50%
0%
98%88%
10-YEAR
ONEOK, Inc. S&P 500
400%
300%
200%
100%
0%
96%357%
4
James C. Day retired from the ONEOK Board of
Directors in May 2016. During his 12 years of service,
Jim provided invaluable leadership and direction to our
board through great periods of change and growth.
Thank you, Jim, for your guidance and service to
ONEOK and its investors.
We also thank our employees for their continued
hard work and commitment to executing on our key
strategies while operating our assets safely, reliably
and in an environmentally responsible way.
And, finally, thank you to our investors for your
continued trust. We are committed to continuing to
create value for you by positioning ONEOK as one of
the country’s premiere midstream service providers.
RECOGNITION
Terry K. Spencer
President and
Chief Executive Officer
March 13, 2017
R O A D R U N N E R
Gas Transmission Pipeline
Texas
John W. Gibson
Chairman
5
SERVICE
INTEGRATION ENHANCES
I N T H E M I D - C O N T I N E N T
An area where we see strong
potential in 2017 for all three of our
segments is the Mid-Continent, home
to the STACK and SCOOP plays in
central Oklahoma.
Lower break-even economics are
driving increased producer activity
in the STACK and SCOOP where
we are well-positioned to meet the
growing demand for midstream
NGL and natural gas services with
available capacity and connections to
key market centers.
Our NGL system is our most
extensive asset position in the
Mid-Continent, gathering
approximately 150,000 to 200,000
barrels per day (bpd) of NGLs
in the STACK and SCOOP, with
approximately 100,000 bpd of
available capacity with minimal
capital expenditures to meet growing
demand from this region. Our
integrated NGL system provides
takeaway services to more than
100 plants, representing more
than 90 percent of the natural gas
processing plants in the area.
Increased ethane production
remains an expected strong driver
of future NGL volume growth in
the Mid-Continent region, which is
expected to benefit from increased
ethane demand as new world-
scale petrochemical facilities begin
operations and new export facilities
increase capacity utilization in the
second half of 2017 and beyond.
Ethane is an important
petrochemical feedstock used in
the manufacturing process.
In full ethane recovery, we anticipate
approximately 150,000 bpd of
increased ethane production from
our NGL processing plant customers
across our system, resulting in
approximately $200 million of
potential annual earnings uplift.
Our NGL system is well-positioned to
provide critical takeaway of raw NGLs
out of the Mid-Continent.
In addition to our NGL services,
we operate an extensive footprint
of natural gas transportation
pipelines and have more than
50 Bcf of natural gas storage
capacity in Oklahoma. Our pipelines
provide connectivity to end-use
markets for more than 30 processing
plants with a combined 1.9 Bcf/d
of capacity.
To expand our natural gas
transportation services, which
produce nearly 100 percent
fee-based earnings, we have been
in discussions with producers
and on-system markets about the
potential construction of an intrastate
pipeline that would run through the
middle of the STACK and SCOOP.
If successful in securing the
necessary contractual commitments
and board approvals, the company
would construct the proposed
36-inch diameter pipeline, spanning
approximately 200 miles and
providing essential takeaway
of up to 1.4 Bcf/d of natural gas via
an interconnection with a market
hub in southeastern Oklahoma.
The proposed bi-directional pipeline
and related infrastructure target
anticipated completion in the
third quarter 2018.
We also provide critical natural gas
gathering and processing services
as an operator of 700 million cubic
feet per day (MMcf/d) of natural gas
processing capacity in Oklahoma.
We are well-positioned to meet
increased customer demand with
nearly 100 MMcf/d of current
available capacity to process natural
gas gathered from increased drilling
activity on our approximately 200,000
contractually dedicated acres in
the STACK.
Our integrated and extensive
position in the Mid-Continent,
specifically in the STACK and
SCOOP, is expected to be an
important driver for growing NGL and
natural gas volumes and fee-based
earnings in 2017 and beyond.
6
Natural Gas Gathering
Pipelines
Natural Gas Processing Plant
NGL Pipelines
NGL Fractionator
NGL Storage
Natural Gas Pipelines
Natural Gas Storage
Basin
T E X A S
K A N S A S
O K L A H O M A
OUR ACREAGE DEDICATION IN THE STACK: 200,000
OUR NATURAL GAS PROCESSING CAPACITY IN OKLAHOMA: 700 MMCF/D
AVAILABLE CAPACITY IN THE STACK: ~100 MMCF/D
PLANT CONNECTIONS:
NGL (MID-CONTINENT): 110
NATURAL GAS PIPELINES (OKLAHOMA): 34
STACK AND SCOOP
STACK PLAY
SCOOP PLAY
M E D F O R D
NGL Facility
Oklahoma
NGLS: CONWAY, KANSAS; MONT BELVIEU, TEXAS; AND CHICAGO AREA
NATURAL GAS: WAHA HUB IN TEXAS; INTERSTATE; AND INTRASTATE
MARKET CONNECTIVITY:
OPPORTUNITY
We continue to operate a strong and
growing footprint in the Delaware
and Midland basins, located in the
well-established Permian Basin in
West Texas.
In 2016, we completed the first and
second phases of our joint-venture
Roadrunner Gas Transmission
Pipeline, which has the capacity
to export up to 570 MMcf/d of
natural gas to Mexico and provides
those markets access to upstream
supply basins.
Complementary to the Roadrunner
project was the expansion of our
WesTex Transmission Pipeline
system, which we completed
in October 2016. The pipeline
transports natural gas to the
Waha Hub, near Coyanosa,
Texas, providing significant market
opportunities for our customers.
Both Roadrunner and the
WesTex expansion are fully
subscribed under 25-year, firm
fee-based commitments.
We also are an NGL service provider
in the high-producing Permian Basin
via our West Texas LPG system,
which provides transportation
services to the Mont Belvieu market
center from nearly 40 third-party
natural gas processing plants.
In 2017, we expect producer activity
to increase in the Permian Basin,
and we are well-positioned to meet
the growing demand for NGL
and natural gas services.
OUR ASSETS CREATE
I N T H E P E R M I A N B A S I N
T E X A SN E W M E X I C O
PERMIAN BASIN
NATURAL GAS TRANSMISSION
PIPELINE CAPACITY IN TEXAS: > 1.5 BCF/D
PLANT CONNECTIONS:
NGL: ~40
NATURAL GAS PIPELINES: 22
MILES OF NATURAL GAS
TRANSPORTATION PIPELINE: 2,500
NGL Pipelines
Natural Gas Pipelines
50 Percent Interest
Natural Gas Storage
NGL Storage
Basin
DELAWARE BASIN
MIDLAND BASIN
Roadrunner Gas Transmission Pipeline
NGLS: CONWAY, KANSAS; MONT BELVIEU, TEXAS;
AND CHICAGO AREA
NATURAL GAS: WAHA HUB IN TEXAS AND INTRASTATE
MARKET CONNECTIVITY
GROWTH
DEMAND FOR SERVICES DRIVES
I N T H E W I L L I S T O N B A S I N
M O N T A N A
T E X A S
N O R T H D A K O T A
C A N A D A
The Williston Basin is an important
area for long-term volume growth for
both NGLs and natural gas on our
system. This NGL-rich basin continues
to outperform in a tough environment,
proving its resiliency and the decades-
long production life ahead of it.
Our strong asset position in the
highly productive core of the basin
allowed us to successfully increase
our average natural gas volumes
gathered and processed in 2016
compared with 2015.
With the completion of our Bear
Creek plant in August 2016, our total
natural gas processing capacity in
the Williston Basin is nearly
1 Bcf/d, underscoring our
position as the largest
independent operator of
natural gas gathering and
processing facilities in
the region.
We currently have more than
200 MMcf/d of available natural gas
processing capacity across our
Williston Basin system, so we
are well-prepared to capture
2017 volumes as drilling activities
are expected to increase and
drilled but uncompleted wells are
brought online on our more than
3 million acres of dedication.
In addition to our natural gas
gathering and processing
operations, we are the sole NGL
takeaway provider from the region
via our Bakken NGL Pipeline, which
delivers product south to Mid-
Continent and Gulf Coast markets.
We also provide long-haul, primarily
fee-based natural gas transportation
services, delivering natural gas east
to markets near Chicago.
WILLISTON BASIN
OUR ACREAGE DEDICATION: 3 MILLION
OUR NATURAL GAS PROCESSING CAPACITY: ~1 BCF/D
AVAILABLE NATURAL GAS
PROCESSING CAPACITY: ~200 MMCF/D
BAKKEN NGL PIPELINE CAPACITY: 135,000 BPD
NORTHERN BORDER PIPELINE CAPACITY: 2.4 BCF/D
Natural Gas Gathering
Pipelines
Natural Gas Processing Plant
NGL Pipelines
Natural Gas Pipeline
50 Percent Interest
Basin
WILLISTON BASIN
Northern Border Pipeline
Bakken NGL Pipeline
9
CORPORATE INFORMATION
ONEOK Annual Meeting
The 2017 annual meeting of shareholders will be held Wednesday, May 24, 2017,
at 9 a.m. Central Daylight Time at ONEOK Plaza, 100 West Fifth Street, Tulsa, OK.
Auditors
PricewaterhouseCoopers LLP
Two Warren Place
6120 South Yale Avenue, Suite 1850
Tulsa, OK 74136
Direct Stock Purchase and Dividend Reinvestment Plan
ONEOK’s Direct Stock Purchase and Dividend Reinvestment Plan provides investors
the opportunity to purchase shares of common stock without payment of any
brokerage fees or service charges and to reinvest dividends automatically.
Transfer Agent, Registrar, Dividend-paying Agent
and Distribution-paying Agent
Wells Fargo Shareowner Services
P.O. Box 64874
St. Paul, MN 55164-0854
ONEOK: 866-235-0232 ONEOK Partners: 866-605-8639
www.shareowneronline.com
Tax Package Support
ONEOK Partners, L.P.
K-1 Support
P.O. Box 799060
Dallas, TX 75379-9060
800-371-2188
www.taxpackagesupport.com/oneok
Credit Ratings OKE OKS
S&P Global Ratings BB+ BBB
Moody’s Investors Service Ba1 Baa2
Investor Relations
T.D. Eureste, director – investor relations, by phone at 918-588-7167 or by email at
teureste@oneok.com.
Megan Patterson, supervisor – investor relations, by phone at 918-561-5325 or by
email at mpatterson@oneok.com.
Corporate Websites
www.oneok.com www.oneokpartners.com
NON-GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL MEASURES
ONEOK and ONEOK Partners have disclosed in this annual report adjusted EBITDA, cash flow available for dividends, free cash flow and dividend coverage ratio, and ONEOK
Partners distributable cash flow and distribution coverage ratio, which are non-GAAP financial metrics, used to measure the company’s financial performance and are defined
as follows:
• Adjusted EBITDA is defined as net income adjusted for interest expense, net of capitalized interest, depreciation and amortization, impairment charges, income taxes and
allowance for equity funds used during construction and certain other noncash items;
• Cash flow available for dividends is defined as cash distributions declared from ONEOK’s ownership in ONEOK Partners adjusted for ONEOK’s standalone interest expense,
corporate expenses, excluding certain noncash items, payments related to released contracts from ONEOK’s former energy services business, capital expenditures and
equity compensation reimbursed by ONEOK Partners;
• Free cash flow is defined as cash flow available for dividends, computed as described above, less ONEOK’s dividends declared;
• Dividend coverage ratio is defined as cash flow available for dividends divided by the dividends declared for the period;
• Distributable cash flow is defined as ONEOK Partners adjusted EBITDA, computed as described above, less interest expense, maintenance capital expenditures and equity
earnings from investments, adjusted for cash distributions received and certain other items; and
• Distribution coverage ratio is defined as ONEOK Partners distributable cash flow to limited partners per limited partner unit divided by the distribution declared per limited
partner unit for the period.
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. ONEOK cash flow available for dividends, free cash flow and dividend coverage ratio, and ONEOK Partners distributable
cash flow and distribution coverage ratio, 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. Reconciliations of adjusted EBITDA, cash flow available for dividends and free cash flow to net income are included in the tables.
FORWARD-LOOKING STATEMENTS
Some of the statements contained and incorporated in this annual report are forward-looking statements as defined under federal securities laws. The forward-looking
statements relate to our anticipated financial performance (including projected operating income, net income, capital expenditures, cash flow and projected levels of dividends
and distributions), liquidity, management’s plans and objectives for our future growth projects and other future operations (including plans to construct additional natural
gas and natural gas liquids pipelines and processing facilities and related cost estimates), our business prospects, the outcome of regulatory and legal proceedings, market
conditions, statements about the benefits of the Merger Transaction involving ONEOK and ONEOK Partners and other matters. We make these forward-looking statements in
reliance on the safe harbor protections provided under federal securities legislation and other applicable laws. The following discussion is intended to identify important factors
that could cause future outcomes to differ materially from those set forth in the forward-looking statements.
Forward-looking statements include the items identified in the preceding paragraph, the information concerning possible or assumed future results of our operations and other
statements contained or incorporated in this annual report identified by words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “should,” “goal,”
“forecast,” “guidance,” “could,” “may,” “continue,” “might,” “potential,” “scheduled” and other words and terms of similar meaning.
One should not place undue reliance on forward-looking statements. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Those factors may affect our
operations, markets, products, services and prices. In addition to any assumptions and other factors referred to specifically in connection with the forward-looking statements,
factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement include, among others, the following:
10
• the ability to obtain the requisite approvals from ONEOK’s shareholders or ONEOK Partners’ unitholders relating to the Merger Transaction;
• the risk that ONEOK or ONEOK Partners may be unable to obtain governmental and regulatory approvals required for the Merger Transaction, if any, or required
governmental and regulatory approvals, if any, may delay the Merger Transaction or result in the imposition of conditions that could cause the parties to abandon the Merger
Transaction;
• the risk that a condition to closing of the Merger Transaction may not be satisfied;
• the timing to consummate the Merger Transaction;
• the risk that the cost savings, tax benefits and any other synergies from the Merger Transaction may not be fully realized or may take longer to realize than expected;
• disruption from the Merger Transaction may make it more difficult to maintain relationships with customers, employees or suppliers;
• the possible diversion of management time on Merger Transaction-related issues;
• the impact and outcome of pending and future litigation, including litigation, if any, relating to the Merger Transaction;
• the effects of weather and other natural phenomena, including climate change, on our operations, demand for our 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 facilities;
• 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 ONEOK, ONEOK Partners, ONEOK Partners GP and related parties of ONEOK, ONEOK Partners and ONEOK Partners GP;
• the impact of unforeseen changes in interest rates, equity markets, inflation rates, economic recession and other external factors over which we 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 ONEOK and ONEOK Partners;
• 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 FERC, the National Transportation Safety Board, the PHMSA, the EPA and 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;
• 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’ facilities;
• 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 ONEOK Partners’ gathering system, processed in ONEOK Partners’ plants and transported on ONEOK
Partners’ 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 we have filed and may file with the Securities and Exchange Commission (SEC), which are incorporated by reference.
These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements.
Other factors could also have material adverse effects on our future results. These and other risks are described in greater detail in Part I, Item 1A, Risk Factors, in this
annual report and in our other filings that we make with the SEC, which are available via the SEC’s website at www.sec.gov and our websites at www.oneok.com or www.
oneokpartners.com. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Any such forward-
looking statement speaks only as of the date on which such statement is made, and other than as required under securities laws, we undertake no obligation to update publicly
any forward-looking statement whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.
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RECONCILIATION OF ONEOK PARTNERS’ NET INCOME TO ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW - UNAUDITED (MILLIONS OF DOLLARS)
2016 2015 2014
Net income $ 1,072.3 $ 597.9 $ 911.3
Interest expense, net of capitalized interest 366.8 338.9 281.9
Depreciation and amortization 388.6 352.2 291.2
Impairment charges — 264.3 76.4
Income tax expense 13.9 4.1 12.7
Allowance for equity funds used during construction and other (1.3) 8.1 (14.9)
Adjusted EBITDA 1,840.3 1,565.5 1,558.6
Interest expense, net of capitalized interest (366.8) (338.9) (281.9)
Maintenance capital (112.4) (115.6) (126.9)
Equity in net earnings from investments, excluding noncash impairment charges (139.7) (125.3) (117.4)
Distributions received from unconsolidated affiliates 196.7 155.9 139.0
Other (5.2) (4.9) (1.9)
Distributable cash flow $ 1,412.9 $ 1,136.7 $ 1,169.5
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication is not a solicitation of any vote, approval, or proxy from any ONEOK shareholder or ONEOK Partners unitholder. In connection with the proposed
transaction, ONEOK filed with the SEC a registration statement on Form S-4, which includes a preliminary joint proxy statement of ONEOK and ONEOK Partners and that also
constitutes a preliminary prospectus of ONEOK. These materials are not yet final and will be amended. Each of ONEOK and ONEOK Partners may also file other documents with
the SEC regarding the proposed transaction. ONEOK and ONEOK Partners will each mail the joint proxy statement/prospectus to their respective shareholders and unitholders.
This document is not a substitute for any prospectus, proxy statement or any other document which ONEOK and ONEOK Partners may file with the SEC in connection with
the proposed transaction. ONEOK and ONEOK Partners urge investors and their respective shareholders and unitholders to read the registration statement,
including the preliminary joint proxy statement/prospectus that is part of the registration statement and the definitive joint proxy statement/prospectus,
and other relevant materials 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 contain or 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 ONEOK’s website (www.oneok.com) under
the tab “Investors” and then under the heading “Financial Information” and “SEC Filings.” You may also obtain these documents, free of charge, from ONEOK Partners’ website
(www.oneokpartners.com) under the tab “Investors” and then under the heading “Financial Information” and “SEC Filings.”
PARTICIPANTS IN THE SOLICITATION
ONEOK, ONEOK Partners and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from ONEOK
shareholders and ONEOK Partners 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 ONEOK shareholders and ONEOK Partners unitholders in connection with the proposed transaction is contained in the preliminary
joint proxy statement/prospectus and will be set forth in the definitive joint proxy statement/prospectus when it becomes available. You can find information about ONEOK’s
executive officers and directors in its definitive proxy statement filed with the SEC on April 5, 2017. You can find information about ONEOK Partners’ executive officers and
directors in its annual report on Form 10-K filed with the SEC on Feb. 28, 2017. Additional information about ONEOK’s executive officers and directors and ONEOK Partners’
executive officers and directors can be found in the above-referenced Registration Statement on Form S-4 and other relevant materials to be filed with the SEC when they
become available. You can obtain free copies of these documents from ONEOK and ONEOK Partners using the contact information above.
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