909281--3/1/2007--ONEOK_Partners

related topics

{gas, price, oil}

{debt, indebtedness, cash}

{tax, income, asset}

{stock, price, operating}

{investment, property, distribution}

{cost, regulation, environmental}

{loss, insurance, financial}

{loan, real, estate}

{capital, credit, financial}

{operation, natural, condition}

{product, market, service}

RISKS INHERENT IN OUR BUSINESS The volatility of natural gas and NGL prices could adversely affect our cash flow. Our inability to execute growth and development projects and acquire new assets could reduce cash distributions to unitholders. We do not fully hedge against price changes in commodities. This could result in decreased revenues, increased costs and lower margins, adversely affecting our results of operations. If the level of drilling and production in the Mid-Continent, Rocky Mountain and Gulf Coast regions substantially declines, our volumes and revenues could decline. 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 our transportation services could significantly decrease. Pipeline integrity programs and repairs may impose significant costs and liabilities. Growing our business by constructing new pipelines and new processing and treating facilities or making modifications to our existing facilities subjects us to construction risks and risks that adequate natural gas or NGL supplies will not be available upon completion of the facilities. Our regulated natural gas pipelines transportation rates are subject to review and possible adjustment by federal regulators. In the competition for customers, we may have significant levels of uncontracted or discounted transportation capacity on our interstate natural gas pipelines. Our interstate natural gas pipelines have recorded certain assets that may not be recoverable from our customers. Our operations are subject to federal and state laws and regulations relating to the protection of the environment, which may expose us to significant costs and liabilities. We are exposed to the credit risk of our customers and our credit risk management may not be adequate to protect against such risk. Our use of financial instruments to hedge market risk may result in reduced income. Our inability to execute growth and development projects related to our interstate pipelines and acquire new assets could reduce cash distributions to unitholders. RISKS INHERENT IN AN INVESTMENT IN US The issuance of Class B units to ONEOK in connection with the acquisition of the ONEOK Energy Assets diluted our current unitholders ownership interests. We do not operate all of our assets nor do we directly employ any of the persons responsible for providing us with administrative, operating and management services. This reliance on others to operate our assets and to provide other services could adversely affect our business and operating results. The composition of natural gas received by our pipelines could reduce our available transportation capacity and increase our operating expenses. The Board of Directors of our general partner, our general partner and its affiliates have conflicts of interest and limited fiduciary duties, which may permit them to favor their own interests. Our general partner and its affiliates may compete directly with us and have no obligation to present business opportunities to us. Our Partnership Agreement limits our general partner s fiduciary duties to our unitholders and restricts the remedies available to unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty. The control of our general partner may be transferred to a third party without unitholder consent. Any reduction in our credit ratings could materially and adversely affect our business, financial condition, liquidity and results of operations. Increases in interest rates may cause the market price of our common units to decline. A downgrade of our credit rating may require us to offer to repurchase certain of our senior notes or may impair our ability to access capital. We may not be able to successfully transfer operations from Omaha to Tulsa or successfully transfer the operations of Northern Border Pipeline to an affiliate of TransCanada. Our indebtedness could impair our financial condition and our ability to fulfill our debt obligations. We and the Intermediate Partnership have a holding company structure in which our subsidiaries conduct our operations and own our operating assets. We may issue additional common units without unitholder approval, which would dilute unitholders ownership interests. Our general partner has a limited call right that may require unitholders to sell their common units at an undesirable time or price. Our Partnership Agreement restricts the voting rights of unitholders owning 20 percent or more of our common units. Unitholders may not have limited liability if a court finds that unitholder action constitutes control of our business. Unitholders may also have liability to repay distributions. Our tax treatment depends on our status as a partnership for federal income tax purposes, as well as not being subject to entity level taxation by any state. If the IRS were to treat us as a corporation or if we were to become subject to a material amount of entity level taxation for state tax purposes, then our cash available for distribution to our common unitholders would be substantially reduced. A successful IRS contest of the federal income tax positions we take may adversely impact the market for our common units, and the costs of any contest will be borne by our unitholders and general partner. A unitholder may be required to pay taxes on a share of our income even if the unitholder does not receive any cash distributions from us. The taxable gain or loss on the disposition of our common units could be different than expected. Tax-exempt entities and foreign persons face unique tax issues from owning common units that may result in adverse tax consequences to them. We will treat each purchaser of units as having the same tax benefits without regard to the units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units. Unitholders will be subject to state and local taxes and return filing requirements as a result of investing in our common units. The sale or exchange of 50 percent or more of the total interest in our capital and profits within a 12-month period will result in the termination of our Partnership for federal income tax purposes.

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909281--3/1/2007--ONEOK_Partners_LP