1039684--3/1/2007--ONEOK_INC

related topics

{gas, price, oil}

{capital, credit, financial}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{loss, insurance, financial}

{operation, natural, condition}

{regulation, change, law}

{acquisition, growth, future}

{product, market, service}

{cost, operation, labor}

{cost, contract, operation}

{competitive, industry, competition}

{tax, income, asset}

RISK FACTORS INHERENT IN OUR BUSINESS Our cash flow depends heavily on the earnings and distributions of ONEOK Partners. Our nonregulated businesses have a higher level of risk than our regulated businesses. Our distribution companies have recorded certain assets that may not be recoverable from their customers. Our businesses are subject to market and credit risks. Increased competition could have a significant adverse financial impact on us. We may not be able to successfully make additional strategic acquisitions or integrate businesses we acquire into our operations. Any reduction in our credit ratings could materially and adversely affect our business, financial condition, liquidity and results of operations. We are subject to comprehensive energy regulation by governmental agencies and the recovery of our costs is dependent on regulatory action. We are subject to environmental regulations that could be difficult and costly to comply with. We are subject to risks that could limit our access to capital, thereby increasing our costs and adversely affecting our results of operations. Our business could be adversely affected by strikes or work stoppages by our unionized employees. We do not fully hedge against price changes in commodities. This could result in decreased revenues and increased costs, thereby resulting in lower margins and adversely affecting our results of operations. Although we control ONEOK Partners, we may have conflicts of interest with ONEOK Partners which could subject us to claims that we have breached our fiduciary duty to ONEOK Partners and its unitholders. RISK FACTORS RELATED TO ONEOK PARTNERS BUSINESS The volatility of natural gas and NGL prices could adversely affect ONEOK Partners cash flow. ONEOK Partners inability to execute growth and development projects and acquire new assets could reduce cash distributions to unitholders. ONEOK Partners does not fully hedge against price changes in commodities. This could result in decreased revenues, increased costs and lower margins, thereby adversely affecting the results of ONEOK Partners operations. If the level of drilling and production in the Mid-Continent, Rocky Mountain and Gulf Coast regions substantially declines, ONEOK Partners volumes and revenue could decline. Pipeline integrity programs and repairs may impose significant costs and liabilities. Growing ONEOK Partners business by constructing new pipelines and new processing and treating facilities or making modifications to its existing facilities subjects ONEOK Partners to construction risks and risks that adequate natural gas or NGL supplies will not be available upon completion of the facilities. If production from the Western Canada Sedimentary Basin remains flat or declines and demand for natural gas from the Western Canada Sedimentary Basin is greater in market areas other than the Midwestern United States, demand for ONEOK Partners transportation services could significantly decrease. ONEOK Partners regulated natural gas pipelines transportation rates are subject to review and possible adjustment by federal regulators. In the competition for customers, ONEOK Partners may have significant levels of uncontracted or discounted transportation capacity on its natural gas pipelines. ONEOK Partners interstate natural gas pipelines have recorded certain assets that may not be recoverable from its customers. The composition of natural gas received by ONEOK Partners pipelines could reduce ONEOK Partners available transportation capacity and increase its operating expenses. ONEOK Partners operations are subject to federal and state laws and regulations relating to the protection of the environment, which may expose it to significant costs and liabilities. ONEOK Partners is exposed to the credit risk of its customers and its credit risk management may not be adequate to protect against such risk. Any reduction in the ONEOK Partners credit ratings could materially and adversely affect its business, financial condition, liquidity and results of operations. ONEOK Partners use of financial instruments to hedge market risk may result in reduced income. ONEOK Partners inability to execute growth and development projects related to its interstate pipelines and acquire new assets could reduce cash distributions to its unitholders.

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1039684--3/1/2007--ONEOK_INC_/NEW/