ONEOK Inc. (OKE)

Analyst Day Call

September 27, 2011 9:00 AM ET

Executives

Dan Harrison – VP, Investor Relations and Public Affairs

John Gibson – Chairman, President and CEO

Robert Martinovich – SVP, CFO and Treasurer

Robert Mareburger – SVP, Corporate Planning and Development

Pierce Norton – COO

Caron Lawhorn – President, ONEOK Distribution Companies

Patrick McDonie – President

Terry Spencer – COO, ONEOK Partners

Sheridan Swords – President, Natural Gas Liquids, ONEOK Partners

Curtis Dinan – President, Natural Gas, ONEOK Partners

Presentation

Dan Harrison

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I’m Dan Harrison with ONEOK and ONEOK Partners and if you not met Andrew Ziola and Lindsey Ameen, check in please they have presentations and copies of our news releases on 2010 guidance for OKE and OKS. So, please get those. You want to go through our riveting forwarding-looking statement recognizing that many of the comments we made today are forward looking and from an agenda standpoint, we have a full agenda.

We’ll start with John and then Rob on the financial side and then Pierce will talk about OKE with distribution and Energy Services. We’ll take a break and then Terry and his team will talk about ONEOK Partners followed by wrap up with John and we hope that you’ll join us for lunch next door beginning at 12:00, we’ll have some table setup with individual members of our management team at each table giving opportunity to ask additional questions that you may have.

So, with that I’m going to introduce Mr. Gibson.

John Gibson

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Hello everybody. All right, that’s the end of our difficulties for today. Welcome to our Investor Day. It’s good to be back here again. I’d like to at this time to figure out all the important things here is and introduce to you are our participants in today’s discussion starting with Mr. Martinovich. I might add that there is bios in the back so I’m not going to repeat all that. Although there is some interest facts about each that I would like to share I’m not embarrass them because these people are extremely importantly to ONEOK and extremely important to our leadership team.

Rob is an engineer, graduate Notre Dame. His background with Phillips Petroleum, ethylene olefins background, then into gathering and processing with Phillips and then GPM, then DCP and then to ONEOK. So, a very strong background in not only olefins but also in the midstream business.

Bob Mareburger, another engineer petroleum engineer with a MBA started his career with Andersen Consulting, went to CITGO, came there Chief Information Officer. We hired him as our Chief Information Officer. Moved even several years to run our natural gas business in the partnership did an outstanding job and now is our Senior Vice President, Corporate Planning and Development.

Next, Pierce Norton. Pierce, would you stand up, an engineer also. A background in primarily gathering and processing, TXO Delhi and then Bear Paw, which we acquired then to Northern Border and Pierce background with us leading gathering and processing then he ran our distribution businesses and now he is our Chief Operating Officer at ONEOK.

And then, Terry Spencer, another engineer. Background much similar to Pierce. TXO Delhi and then Terry went to Continental and then to ONEOK. He ran our gathering and processing business. He then, when we acquired the Koch assets ran our NGL business and he is now our Chief Operating Officer at ONEOK Partners.

Here today with Pierce, is his team Pat McDonie, standup Pat, another engineer. There is a pattern here. Petroleum and he also worked at Delhi TXO. He has got some gathering and processing background but has spent his entire career with ONEOK inside our Energy Services segment and now is a President of Energy Services segment.

Ms. Caron Lawhorn, who many of you know she has background in business and accounting. Was our Chief Accounting Officer at ONEOK and interim CFO when we sent Curtis to off to school during very tumultuous times, she did a great job. She then became Senior Vice President, Corporate Planning and Development. Led lot of our changes that have occurred to the company and now she is the President of all our distribution companies.

And then, Sheridan Swords. Sheridan would stand up. He is an engineer. His background is with Koch and in the NGL business. He has spent his entire career there all the way through operating engineering and in commercial and now is the president of our NGL business.

And then, last but certainly not least Curtis Dinan, who has a background obviously educational background in accounting business administration and Curtis was our Chief Accounting Officer, then our Chief Financial Officer and now, he is responsible for all the gas activities which are gathering and processing in pipelines in the natural gas side inside the partnership.

I’d also like to introduce Steve Lake who will become our general counsel in December up on John Barker retirement.

And then last but certainly not least I’d like to introduce Derek Reiners, our Chief Accounting Officer who came to us from Arthur Andersen, grab the work but his background in accounting and business as well.

Okay. This is what we talk about today. We’ll obviously shed some light on our 2012 guidance. Give you three year look. We want to touch on the environmental safety and health performance of the company. We’re going to spend some time on each of these segments and then we’re going to end the discussion with some thoughts about natural gas, liquids supply and demand. But, what I like you to take away from our meeting today is that we remain very confident in 2011 guidance.

Our 2012 guidance, which we announced yesterday shows year-over-year improvement. We like you to know that we’re on top of our pipeline safety. I like you also to know that at ONEOK Partners, our projects are on time and on budget and relative to the commercial negotiations, relative to each of those projects we continue to make great progress.

At our distribution segment, we continue to have both regulatory and financial discipline as we grow that business and Energy Services we continue to face a pretty tough business, pretty tough market due to low basis, low price volatility and low seasonal spreads. But, the bottom line is between now and 2014, this management team, our company, our employees intend to deliver 18 to 22% growth and net income at ONEOK and 18 to 22% EBITDA growth at ONEOK Partners. And what we want to show you today is how we’re going to do that.

If you look at ONEOK today, as it has been in the past for us all about supply and demand and connecting supply and demand for a producer or a customer. We do that through our integrated assets that we build and we buy and as a result of that we have produced a track record of growth primarily at ONEOK Partners through acquisition and in this internal growth projects.

These are the three business segments that we’ll take a deeper dive into as we go through the day, our ONEOK Partners, Natural Gas Distribution segment where we have our three utilities and our Energy Services or Gas Marketing business.

Our vision remains unchanged. I mean it’s been this for the last five years and we create value in the marketplace by re-bundling pieces of the value chain back together. Historically, they were broken up and a lot of inefficiencies created in the marketplace and in particular as it relates to supply needing to get to demand or demand requiring supply. As we go through our screen test so to speak, we look for opportunities where supplies trap or demands not being met either by our customer or a producer and we try to figure out how to solve that problem and we do so by applying the capabilities we have at the company obviously through our people as well as our assets.

For example, how we gather process, treat, how we store, how we market, how we account for all those of things we considered to be our capability some of which are a competitive advantage and we are constantly looking at how we can improve in those areas of capabilities as well as identifying those capabilities we don’t have that we think we need and how best to acquire or develop those capabilities. So, I obviously want to emphasis the capabilities are as important to our successful execution of our vision as is looking for the opportunities to re-bundle pieces in the value chain.

Our key strategies likewise remain unchanged. So, you got a vision, strategy over the last five years been relatively unchanged. But, the benefit of that has been and in particular at ONEOK Partners this growth engine has delivered to ONEOK approximately $300 million in 2010 and we expect in 2011, ONEOK Partners deliver around $333 million and as announced yesterday, we expect in 2012 ONEOK Partners to deliver $423 million. It’s a great problem to have. That results in a compound annual growth rate of 20% since 2006 and as we talk today, you’re going to hear comparisons back to 2006, that’s important for us because that’s when we became 100% owners of the general partner at ONEOK Partners.

So, another reason we believe the vision and strategy of working is because relative to the S&P 500 and other relevant indices, ONEOK and ONEOK Partners are exceed those indices creating exceptional value for our shareholders and our unit holders. Some of the achievements that we’ve experienced since the last time we were together. We’ve obviously –we’ve announced more growth projects. So, when you look back over the – if you start back when we acquired the Koch assets. We’ve invested well over $5 billion and just recently had another 2.7 to $3.3 billion.

We’ve increased ONEOK quarterly dividend three times since the last time we were together. We’re now on $0.56 per share for quarter, 22% increase. We completed $300 million accelerated share repurchase at ONEOK. We increase ONEOK Partners this quarterly distribution four times since the last time we were together, now, $0.585 per unit. In July, we completed a split of the ONEOK Partners unit and then our ONEOK standalone capitalization remains below 50.

Now, slide 19 to talk about acquisitions. I’ll step down and we’ll get the show started. You have to talk about transforming transactions because I don’t talk about transforming transactions most of you in this room agrees with me for the balance of the year or the next we’re together we won’t have anything to talk about. I use that phrase last year and it seems like every time I run into you, we want to talk more about transforming transaction. So, here we go again. But seriously, if you look at our history and how we’ve grown we grow initially primarily through acquisition.

If you go back to the 2000 timeframe, we acquired the midstream assets of Kinder Morgan, Dynegy and Koch. We acquired a lot other gathering processing assets in the Mid-Continent. That transformed the company from a natural gas distribution company to a natural distribution company and a midstream player in gathering and processing with interstate pipeline. And we continue to incremental grow that midstream business.

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