ITEM 1.    BUSINESS

GENERAL

We are a diversified energy company and successor to the company founded in 1906 as Oklahoma Natural Gas Company.  We are a corporation incorporated under the laws of the state of Oklahoma, and our common stock is listed on the NYSE under the trading symbol “OKE.”  We are the sole general partner and, as of December 31, 2013, own 41.2 percent of ONEOK Partners (NYSE: OKS), one of the largest publicly traded master limited partnerships. Our goal is to provide management and resources enabling ONEOK Partners to execute its growth strategies and allowing us to grow our dividend. ONEOK Partners applies its core capabilities of gathering, processing, fractionating, transporting, storing, marketing and distributing natural gas and NGLs through the rebundling of services across the energy value chains, primarily through vertical integration, in an effort to provide its customers with premium services at lower costs. ONEOK Partners is a leader in the gathering, processing, storage and transportation of natural gas in the United States.  In addition, ONEOK Partners owns one of the nation’s premier natural gas liquids systems, connecting NGL supply in the Mid-Continent and Rocky Mountain regions with key market centers.  At December 31, 2013, our operations included our energy services business, which provides premium natural gas marketing services to its customers across the United States, and our natural gas distribution business, which includes Kansas Gas Service, Oklahoma Natural Gas and Texas Gas Service.

EXECUTIVE SUMMARY

In 2013, we announced plans to separate our natural gas distribution business into a standalone publicly traded company and to wind down our energy services business. ONEOK and its subsidiaries will continue to own the entire general partner interest and limited partner interests in ONEOK Partners, which, together, represented a 41.2 percent ownership interest at December 31, 2013, in ONEOK Partners. Following the separation of the natural gas distribution business and the wind down of our energy services business, our cash flows will primarily be derived from the cash distributions we receive from ONEOK Partners associated with our limited partner and general partner interests, including incentive distribution rights. We expect to distribute in the form of dividends the majority of our cash flows in excess of debt service, income taxes and other operating needs. Subject to board approval, we expect to pay higher dividends following the separation of the natural gas distribution business and as ONEOK Partners’ distributions increase.

Separation of Natural Gas Distribution Business - In January 2014, our board of directors unanimously approved the separation of our natural gas distribution business into a standalone publicly traded company, ONE Gas (NYSE: OGS), which was completed on January 31, 2014. ONE Gas consists of ONEOK’s former Natural Gas Distribution segment that includes Kansas Gas Service, Oklahoma Natural Gas and Texas Gas Service. ONEOK shareholders of record at the close of business on January 21, 2014, retained their current shares of ONEOK stock and received one share of ONE Gas stock for every four shares of ONEOK stock owned. In connection with the separation, we received a cash payment of approximately $1.13 billion from ONE Gas and utilized, or will utilize, the proceeds to repay our outstanding commercial paper and to repay approximately $550 million of long-term debt prior to maturity.

ONE Gas is the largest natural gas distributor in Oklahoma and Kansas and the third largest natural gas distributor in Texas, providing service as a regulated public utility to wholesale and retail customers.  ONE Gas’ largest distribution markets are Oklahoma City and Tulsa, Oklahoma; Kansas City, Wichita and Topeka, Kansas; and Austin and El Paso, Texas.  ONE Gas benefits from rate strategies, including a performance-based rate mechanism in Oklahoma, capital-recovery mechanisms in Kansas and portions of Texas, and cost-of-service adjustments in certain Texas jurisdictions that address investments in rate base and changes in expense. See additional discussion in the “Financial Results and Operating Information” section of our Natural Gas Distribution segment.

Wind-down of Energy Services - As a result of challenging natural gas market industry conditions, in June 2013, we announced an accelerated wind down of our Energy Services segment. Our Energy Services segment no longer fits strategically and has become increasingly smaller on a relative basis because of the market conditions that it has faced and the growth of our other businesses. We will continue to operate our Energy Services segment through the completion of the wind down process that is expected to be completed substantially by March 31, 2014. See additional discussion in the “Financial Results and Operating Information” section of our Energy Services segment.

Market Conditions - Domestic supplies of natural gas, natural gas liquids and crude oil continue to increase from drilling activities focused in crude oil and NGL-rich resource areas. Despite lower commodity prices, North American natural gas production continues to increase at a faster rate than demand, primarily as a result of increased production from

nonconventional resource areas such as shale areas.  Producers currently receive higher market prices on a heating-value basis for crude oil and NGLs compared with natural gas. As a result, many producers have focused their drilling activity in NGL-rich shale areas throughout the country that produce crude oil and NGL-rich natural gas rather than areas that produce dry natural gas. ONEOK Partners expects continued demand for midstream infrastructure development to be driven by producers who need to connect emerging production with end-use markets where current infrastructure is insufficient or nonexistent.

Additional infrastructure is needed to gather, process, fractionate, store and transport increasing supplies of natural gas and NGLs.  In response to this increased production and demand for NGL products, ONEOK Partners is investing approximately $6.0 billion to $6.4 billion in new capital projects, including approximately $1.2 billion in new projects and acquisitions announced in 2013. These projects are expected to meet the needs of crude oil, NGL and natural gas producers in the Bakken Shale and Three Forks formations in the Williston Basin, the Niobrara Shale, the Cana-Woodford Shale, Woodford Shale, Mississippian Lime and Granite Wash areas, and the need for additional natural gas liquids infrastructure in the Mid-Continent and Gulf Coast areas that will enhance the distribution of NGL products to meet the increasing petrochemical industry and NGL export demand.  When completed, ONEOK Partners expects these projects to increase volumes in its businesses and generate additional earnings and cash flows, while also increasing commodity-price sensitivity in its natural gas gathering and processing business and fee-based revenues in its natural gas liquids business.

The increased drilling activity and production have resulted in lower NGL prices, as well as reduced price volatility and narrower NGL location and seasonal price differentials for natural gas and NGLs in the markets ONEOK Partners serves. ONEOK Partners expects similar conditions in 2014; however, market conditions may produce periods of higher prices and volatility, as well as wider NGL location and product price differentials. For example, in the fourth quarter 2013, the price of propane increased significantly, and the price differential of propane between the Conway, Kansas, and the Mont Belvieu, Texas, market centers also widened in favor of Conway, Kansas, due to colder than normal weather and lower propane inventory levels. We expect propane prices to remain high through the 2014 winter heating season. Due to success in extracting NGLs, ethane production has increased more rapidly than the petrochemical industry's current capability to consume ethane. ONEOK Partners believes similar market conditions may generally persist until ethylene producers increase their capacity, with the largest number of additions expected to be completed in the next two to four years, to consume additional ethane feedstock volumes through plant modifications and expansions, and the completion of announced new world-scale ethylene capacity.

When economic conditions warrant, certain natural gas processors elect not to recover the ethane component of the natural gas stream, also known as ethane rejection, and instead leave the ethane component in the natural gas stream sold at the tailgate of natural gas processing plants.  Price differentials between ethane and natural gas resulted in ethane rejection at most of ONEOK Partners’ natural gas processing plants and some of  ONEOK Partners’ natural gas liquids business’ customers’ natural gas processing plants connected to its natural gas liquids gathering system in the Mid-Continent and Rocky Mountain regions during 2013, which reduced natural gas liquids volumes gathered, fractionated and transported in its natural gas liquids business and its results of operations. In the near term, ONEOK Partners expects the ethane oversupply may result in volatile ethane prices.

ONEOK Partners expects ethane rejection will persist through much of 2016, after which new world-scale ethylene production capacity is expected to begin coming on line, although market conditions may result in periods where it is economical to recover the ethane component in the natural gas stream. Ethane rejection is expected to have a significant impact on ONEOK Partners’ financial results over this period. However, ONEOK Partners’ natural gas liquids business’ integrated assets enable it to mitigate partially the impact of ethane rejection through minimum volume commitments and its ability to utilize the transportation capacity made available due to ethane rejection to capture additional NGL location price differentials in its optimization activities. In addition, new NGL supply commitments are expected to increase volumes in 2014 through 2016 to mitigate further the impact of ethane rejection on ONEOK Partners’ natural gas liquids business. See additional discussion in the “Financial Results and Operating Information” section.

ONEOK Partners also expects narrow NGL price differentials, with periods of volatility for certain NGLs, between the Conway, Kansas, and Mont Belvieu, Texas, market centers to persist as new fractionators and pipelines from the various NGL-rich shale areas throughout the country, including ONEOK Partners’ growth projects discussed below, continue to alleviate constraints affecting NGL prices and location price differentials between the two market centers. In addition, new natural gas liquids pipeline projects are expected to bring incremental NGL supply from the Rocky Mountain, Marcellus and Utica basins to the Mont Belvieu market center that may affect NGL prices, as well as compete with or displace NGL supply volumes from the Mid-Continent and Rocky Mountain regions where ONEOK Partners’ assets are located. ONEOK Partners’ natural gas liquids business’s capital projects are backed by fee-based supply commitments that ONEOK Partners expects to fill much of its capacity used historically to capture NGL price differentials between the two market centers.

Other Significant 2013 Events - During 2013 , we paid cash dividends of $1.48 per share, an increase of approximately 17 percent from the $1.27 per share paid during 2012 .  In January 2014 , we declared a dividend of $0.40 per share ( $1.60 per share on an annualized basis), an increase of approximately 11 percent from the $0.36 declared in January 2013 .

During 2013 , ONEOK Partners paid cash distributions to its limited partners of $2.87 per unit, an increase of approximately 11 percent compared with the $2.59 per unit paid during 2012 .  In January 2014 , ONEOK Partners GP declared a cash distribution to ONEOK Partners’ limited partners of $0.73 per unit ( $2.92 per unit on an annualized basis) for the fourth quarter 2013, an increase of approximately 3 percent compared with the $0.71 declared in January 2013 .

In August 2013, ONEOK Partners completed an underwritten public offering of 11.5 million common units at a public offering price of $49.61 per common unit, generating net proceeds of approximately $553.3 million . In conjunction with this issuance, ONEOK Partners GP contributed approximately $11.6 million in order to maintain its 2 percent general partner interest in ONEOK Partners. ONEOK Partners used a portion of the proceeds from its August 2013 equity issuance to repay amounts outstanding under its commercial paper program, and the balance was used for general partnership purposes.

ONEOK Partners has an “at-the-market” equity program for the offer and sale from time to time of its common units up to an aggregate amount of $300 million . The program allows it to offer and sell its common units at prices it deems appropriate through a sales agent. Sales of common units are made by means of ordinary brokers’ transactions on the NYSE, in block transactions, or as otherwise agreed to between ONEOK Partners and the sales agent. ONEOK Partners is under no obligation to offer and sell common units under the program. During the year ended December 31, 2013, ONEOK Partners sold common units through this program that resulted in net proceeds, including ONEOK Partners GP’s contribution to maintain its 2 percent general partner interest in ONEOK Partners, of approximately $36.1 million . ONEOK Partners used the proceeds for general partnership purposes.

In September 2013, ONEOK Partners completed an underwritten public offering of $1.25 billion of senior notes, generating net proceeds of approximately $1.24 billion . ONEOK Partners used the proceeds to pay down commercial paper and for general partnership purposes.

In September 2013, ONEOK Partners completed the acquisition for $305 million of certain natural gas gathering and processing, and natural gas liquids facilities in Converse and Campbell counties, Wyoming, in the NGL-rich Niobrara Shale formation of the Powder River Basin. These assets consist primarily of a 50 MMcf/d natural gas processing facility, the Sage Creek plant, and related natural gas gathering and natural gas liquids infrastructure. Included in the acquisition were supply contracts providing for long-term acreage dedications from producers in the area, which are structured with POP and fee-based contractual terms.

During 2013, we relied primarily on operating cash flows, commercial paper and distributions from ONEOK Partners to fund our short-term liquidity and capital requirements. Our cash flow sources and requirements are expected to change significantly following the separation of the natural gas distribution business and the wind down of the energy services business. Our primary source of cash inflows are expected to be distributions from ONEOK Partners, and our primary cash outflows are expected to be dividends to our shareholders. The cash distributions that we expect to receive from ONEOK Partners should provide sufficient resources to finance our operations and quarterly cash dividends. We do not expect any principal debt-service requirements after the first quarter 2014 until our next long-term debt maturity in 2022. ONEOK Partners anticipates that its cash flows generated from operations, existing capital resources and ability to obtain financing will enable it to maintain its current and planned levels of operations.  Additionally, ONEOK Partners expects to fund its capital expenditures with proceeds from short- and long-term debt, the issuance of equity and operating cash flows.

In December 2013, we amended the ONEOK Credit Agreement effective upon the separation of our natural gas distribution business on January 31, 2014, which reduced the size of our facility to $300 million from $1.2 billion and extended the maturity to January 2019.

In December 2013, ONEOK Partners amended its Partnership Credit Agreement, effective January 31, 2014, to increase the size of the facility to $1.7 billion from $1.2 billion and extended the maturity to January 2019. The facility is available to provide liquidity for working capital, capital expenditures and for other general partnership purposes.

See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation, for more information on our growth projects, results of operations, liquidity and capital resources.

BUSINESS STRATEGY

Our primary business strategy is to maximize dividend payout while maintaining prudent financial strength and flexibility, with a focus on safe, reliable and environmentally responsible operations for our customers, employees, contractors and the public through the following:

NARRATIVE DESCRIPTION OF BUSINESS

At December 31, 2013, we report operations in the following business segments:

ONEOK Partners

Overview - ONEOK Partners is a diversified master limited partnership involved in the gathering, processing, storage and transportation of natural gas in the United States.  In addition, ONEOK Partners owns one of the nation’s premier natural gas liquids systems, which gathers, fractionates, stores and transports NGLs and connects NGL supply in the Mid-Continent and Rocky Mountain regions with key market centers.

We own approximately 92.8 million common and Class B limited partner units, and the entire 2 percent general partner interest, which, together, represent a 41.2 percent ownership interest in ONEOK Partners at December 31, 2013.  We receive distributions from ONEOK Partners on our common and Class B units and our 2 percent general partner interest, which includes our incentive distribution rights.  See Note Q of the Notes to Consolidated Financial Statements in this Annual Report for discussion of our incentive distribution rights.

We and ONEOK Partners maintain significant financial and corporate governance separations.  We seek to receive increasing cash distributions as a result of our investment in ONEOK Partners.  To aid in understanding the important business and financial characteristics of our ONEOK Partners segment at December 31, 2013, the following describes its business with reference to its underlying activities.

Natural gas gathering and processing business - ONEOK Partners’ natural gas gathering and processing business provides nondiscretionary services to producers that include gathering and processing of natural gas produced from crude oil and natural gas wells.  Unprocessed natural gas is compressed and gathered through pipelines to processing facilities where volumes are aggregated, treated and processed to remove water vapor, solids and other contaminants, and to extract NGLs in order to provide marketable natural gas, commonly referred to as residue gas.  The residue gas, which consists primarily of methane, is compressed and delivered to natural gas pipelines for transportation to end users. When the NGLs are separated from the

unprocessed natural gas at the processing plants, the NGLs are in the form of a mixed, unfractionated NGL stream that is delivered to natural gas liquids gathering pipelines for transportation to natural gas liquids fractionators.

ONEOK Partners gathers and processes natural gas in the Mid-Continent region, which includes the NGL-rich Cana-Woodford Shale, Woodford Shale, Granite Wash area and the Mississippian Lime formation of Oklahoma and Kansas and the Hugoton and Central Kansas Uplift Basins of Kansas.  It also gathers and/or processes natural gas in two producing basins in the Rocky Mountain region: the Williston Basin, which spans portions of Montana and North Dakota and includes the oil-producing, NGL-rich Bakken Shale and Three Forks formations; and the Powder River Basin of Wyoming, which includes the NGL-rich Frontier, Turner, Sussex and Niobrara Shale formations. ONEOK Partners also gathers coal-bed methane, or dry natural gas, in the Powder River Basin that does not require processing or NGL extraction in order to be marketable; dry natural gas is gathered, compressed and delivered into a downstream pipeline or marketed for a fee.

Revenue from the natural gas gathering and processing business is derived primarily from commodity and fee-based contracts. ONEOK Partners generally gathers and processes natural gas under the following types of contracts:

ONEOK Partners expects its capital projects in its natural gas gathering and processing business will continue to provide additional revenues, earnings and cash flows as they are completed. ONEOK Partners expects its natural gas liquids and natural gas commodity price sensitivity within this business to increase in the future as its capital projects are completed and volumes increase under POP contracts with its customers. ONEOK Partners uses commodity derivative instruments and physical-forward contracts to mitigate its sensitivity to fluctuations in the natural gas, crude oil and NGL prices received for its share of volumes.

Natural gas liquids business - ONEOK Partners’ natural gas liquids business owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products primarily in Oklahoma, Kansas, Texas and the Rocky Mountain region where it provides nondiscretionary services to producers of NGLs.   ONEOK Partners owns or has an ownership interest in FERC-regulated natural gas liquids gathering and distribution pipelines in Oklahoma, Kansas, Texas, Montana, North Dakota, Wyoming and Colorado, and terminal and storage facilities in Missouri, Nebraska, Iowa and Illinois. ONEOK Partners’ natural gas liquids business also owns FERC-regulated natural gas liquids distribution and refined petroleum products pipelines in Kansas, Missouri, Nebraska, Iowa, Illinois and Indiana that connect its Mid-Continent assets with Midwest markets, including Chicago, Illinois.  The majority of the pipeline-connected natural gas processing plants in Oklahoma, Kansas and the Texas Panhandle, which extract unfractionated NGLs from unprocessed natural gas, are connected to its gathering systems.  ONEOK Partners’ natural gas liquids business owns and operates truck- and rail-loading and -unloading facilities that interconnect with its NGL fractionation and pipeline assets.  In April 2013, ONEOK Partners’ natural gas liquids business began transporting unfractionated NGLs from natural gas processing plants in the Williston Basin on its Bakken NGL Pipeline. These unfractionated NGLs previously were transported by rail to ONEOK Partners’ Mid-Continent natural gas liquids fractionation facilities. ONEOK Partners’ natural gas liquids business continues to use its rail terminal facilities in its NGL marketing activities.

Most natural gas produced at the wellhead contains a mixture of NGL components, such as ethane, propane, iso-butane, normal butane and natural gasoline.  The NGLs that are separated from the natural gas stream at the natural gas processing plants remain in a mixed, unfractionated form until they are gathered, primarily by pipeline, and delivered to fractionators where the NGLs are separated into NGL products.  These NGL products are then stored or distributed to ONEOK Partners’ natural gas liquids business’ customers, such as petrochemical manufacturers, heating fuel users, ethanol producers, refineries and propane

distributors.  ONEOK Partners’ natural gas liquids business also purchases NGLs and condensate from third parties, as well as from ONEOK Partners’ natural gas gathering and processing business.

Revenues from the natural gas liquids business are derived primarily from nondiscretionary fee-based services provided to ONEOK Partners’ customers and physical optimization of its natural gas liquids assets. Its fee-based services have increased due primarily to new supply connections, expansion of existing connections and its previously completed capital projects, including the Bakken-NGL Pipeline, Cana-Woodford Shale and Granite Wash projects, and expansion of its NGL fractionation capacity.  The sources of revenue are categorized as exchange services, optimization and marketing, pipeline transportation, isomerization and storage, which are defined as follows:

Natural gas pipelines business - ONEOK Partners’ natural gas pipelines business owns and operates regulated natural gas transmission pipelines and natural gas storage facilities.  ONEOK Partners also provides interstate natural gas transportation and storage services in accordance with Section 311(a) of the Natural Gas Policy Act.

ONEOK Partners’ FERC-regulated interstate natural gas pipeline assets transport natural gas through pipelines in North Dakota, Minnesota, Wisconsin, Illinois, Indiana, Kentucky, Tennessee, Oklahoma, Texas and New Mexico.  ONEOK Partners’ intrastate natural gas pipeline assets in Oklahoma transport natural gas through the state and have access to the major natural gas producing areas in the state, including the Cana-Woodford Shale, Woodford Shale, Granite Wash and Mississippian Lime.  ONEOK Partners also has access to the major natural gas producing areas, including the Mississippian Lime formation in south central Kansas.  In Texas, its intrastate natural gas pipelines are connected to the major natural gas producing areas in the Texas Panhandle, including the Granite Wash area and the Delaware and Cline producing areas in the Permian Basin, and transport natural gas throughout the western portion of Texas, including the Waha Hub where other pipelines may be accessed for transportation to western markets, the Houston Ship Channel market to the east and the Mid-Continent market to the north. ONEOK Partners owns underground natural gas storage facilities in Oklahoma and Texas that are connected to its intrastate natural gas pipeline assets. ONEOK Partners also has underground natural gas storage facilities in Kansas.

ONEOK Partners’ revenues from its natural gas pipelines are derived typically from fee-based services provided to its customers. Its revenues are generated from the following types of fee-based contracts:

Market Conditions and Seasonality - Supply  - Natural gas, crude oil and NGL supply is affected by producer drilling activity, which is sensitive to commodity prices, drilling rig availability, exploration success, operating capability, the NGL content of

the natural gas that is produced and processed, access to capital and regulatory control.  Crude oil prices and advances in horizontal drilling and completion technology have had a positive impact on drilling activity in the crude oil and NGL-rich shale and other nonconventional resource areas, providing an offset to the less favorable supply projections in some of the dry natural gas conventional resource areas. Extreme weather conditions can impact the volume of natural gas gathered and processed and NGL volumes gathered, transported and fractionated. Freeze-offs are a phenomenon where water produced from natural gas freezes at the wellhead or within the gathering system. This causes a temporary interruption in the flow of natural gas. This is more prevalent in the Rocky Mountain region where temperatures tend to be colder than in the Mid-Continent region but can occur throughout ONEOK Partners’ systems. All of ONEOK Partners’ operations may be affected by other weather conditions that may cause a loss of electricity or prevent access to certain locations that affect a producer’s ability to complete wells or ONEOK Partners’ ability to connect these wells to its systems.

In the Rocky Mountain region, Williston Basin volumes continue to grow as well connections from drilling completions increase, driven primarily by producer development of Bakken Shale and Three Forks formation crude oil wells, which also produce associated natural gas containing significant quantities of NGLs.  However, ONEOK Partners’ natural gas gathering and processing business has experienced declines in natural gas volumes gathered in the portions of the Powder River Basin that produce dry natural gas.

In the Mid-Continent region, ONEOK Partners has a significant amount of natural gas gathering and processing assets in western Oklahoma and southwest Kansas.  ONEOK Partners expects continued drilling activity in the Cana-Woodford Shale and Granite Wash areas of western Oklahoma and the Mississippian Lime formation of Oklahoma and Kansas to offset the volumetric declines in most conventional wells that supply its natural gas gathering and processing facilities.

NGL supply for ONEOK Partners’ natural gas liquids business depends on the pace of crude oil and natural gas drilling activity by producers, the decline rate of existing production and the NGL content of the natural gas that is produced and processed.  ONEOK Partners’ natural gas liquids business has seen rapid NGL supply growth within its operating footprint as producers continue to aggressively drill in a number of NGL-rich resource areas in the Mid-Continent and Rocky Mountain regions.  ONEOK Partners expects the overall supply of NGLs to continue to increase, as well as demand for its fee-based services, as a result of the development of these resource areas.  Many new natural gas processing plants are being constructed in North Dakota, Wyoming, Oklahoma and the Texas Panhandle to process NGL-rich natural gas being produced in the Williston Basin, Niobrara Shale, Cana-Woodford Shale, Granite Wash, Woodford Shale and the Mississippian Lime areas.  The unfractionated NGLs that ONEOK Partners’ natural gas liquids business transports are gathered primarily from natural gas processing plants in Oklahoma, Kansas, Texas and the Rocky Mountain region.  Its gathering and fractionation operations receive NGLs from a variety of processors and pipelines, including affiliates, located in these regions.

ONEOK Partners’ natural gas gathering and processing and natural gas liquids businesses also are affected by operational or market-driven changes that affect the output of natural gas processing plants to which ONEOK Partners’ NGL assets are connected.  The price differential between the typically higher valued NGL products and the value of natural gas, particularly the price differentials between ethane and natural gas, has influenced the volume of ethane natural gas processing plants make available to be gathered in ONEOK Partners’ natural gas liquids business. When economic conditions warrant, certain natural gas processors elect not to recover the ethane component of the natural gas stream, also known as ethane rejection, and instead leave the ethane component in the natural gas stream sold at the tailgate of natural gas processing plants.  Price differentials between ethane and natural gas resulted in ethane rejection at most of ONEOK Partners’ natural gas processing plants and some of  ONEOK Partners’ natural gas liquids business’ customers’ natural gas processing plants connected to its natural gas liquids gathering system in the Mid-Continent and Rocky Mountain regions during 2013, which reduced natural gas liquids volumes gathered, fractionated and transported in its natural gas liquids business and its results of operations.

ONEOK Partners expects ethane rejection will persist through much of 2016, after which new world-scale ethylene production capacity is expected to begin coming on line, although market conditions may result in periods where it is economical to recover the ethane component in the natural gas stream. Ethane rejection is expected to have a significant impact on the financial results of ONEOK Partners’ natural gas liquids business over this period. However, its integrated natural gas liquids assets enable it to mitigate partially the impact of ethane rejection through minimum volume agreements and its ability to utilize the transportation capacity made available due to ethane rejection to capture additional NGL location price differentials in its optimization activities. In addition, new NGL supply commitments are expected to increase volumes in 2014 through 2016 to mitigate further the impact of ethane rejection on ONEOK Partners’ natural gas liquids business. See additional discussion in the “Financial Results and Operating Information” section in our ONEOK Partners segment.

Natural gas, natural gas liquids and crude oil transportation constraints may also affect the output of natural gas processing plants in total or for specific NGL products in the future.  During 2013, ONEOK Partners’ natural gas liquids business experienced limited reductions of supply related to changes in plant output as a result of transportation constraints.

ONEOK Partners’ interstate natural gas pipelines access supply from major producing regions in the Mid-Continent, Rocky Mountain, Gulf Coast, the Northeast and Canada. Supply volumes from nontraditional natural gas production areas, such as into the Northeast, may compete with and displace volumes from the Mid-Continent, Rocky Mountains and Canadian supply sources in our markets.

Demand   -   Demand for natural gas gathering and processing services is aligned typically with the production of natural gas from natural gas resource areas or the associated natural gas from wells drilled in crude oil resource areas.  Gathering and processing are nondiscretionary services that producers require to market their natural gas and NGL production.  As producers continue to develop NGL-rich shale and other resource areas, ONEOK Partners expects demand for its natural gas gathering and processing services to increase.

Demand for NGLs and the ability of natural gas processors to successfully and economically sustain their operations affect the volume of unfractionated NGLs produced by natural gas processing plants, thereby affecting the demand for NGL gathering, fractionation and distribution services.  Natural gas and propane are subject to weather-related seasonal demand. Other NGL products are affected by economic conditions and the demand associated with the various industries that utilize the commodity, such as butanes and natural gasoline used by the refining industry as blending stocks for motor fuel, denaturant for ethanol and diluents for crude oil.  Ethane, propane, normal butane and natural gasoline are used by the petrochemical industry to produce chemical products, such as plastics, rubber and synthetic fibers. Several petrochemical companies announced new plants, plant expansions, additions or enhancements that improve the light-NGL feed capability of their facilities due primarily to the increased supply and attractive price of ethane, compared with crude oil-based alternatives, as a petrochemical feedstock in the United States. The demand is expected to increase significantly in two to four years when the new petrochemical plants are completed. In addition, international demand for propane is expected to continue affecting the NGL market in the future.  ONEOK Partners expects this increase in demand for NGLs will provide opportunities to increase fee-based earnings in its exchange services, storage activities and marketing activities.

Demand for natural gas pipeline transportation service and natural gas storage is related directly to its access to supply and the demand for natural gas in the markets that ONEOK Partners’ natural gas pipelines and storage facilities serve. It is affected by weather, the economy and natural gas and NGL price volatility.  ONEOK Partners’ natural gas pipelines primarily serve end-users, such as local natural gas distribution companies, electric-generation companies, large industrial companies, municipalities and irrigation customers that require natural gas to operate their businesses and generally are not affected by location price differentials. However, narrower location price differentials may affect demand for ONEOK Partners’ services from natural gas marketers as discussed below under “Commodity Prices.”  Demand for ONEOK Partners’ natural gas pipelines services is also affected as coal-fired electric generators are retired and replaced with alternative power generation fuels such as natural gas. Recent EPA regulations on emissions from coal-fired electric-generation plants, including the Maximum Achievable Control Technology Standards and the Mercury and Air Toxics Standards, have increased the demand for natural gas as a fuel for electric generation, as well as related transportation and storage services. The demand for natural gas and related transportation and storage services is expected to increase over the next several years as these regulations continue to be implemented. The effect of weather on ONEOK Partners’ natural gas pipelines operations is discussed below under “Seasonality.” The strength of the economy directly affects manufacturing and industrial companies that consume natural gas.  Commodity price volatility can influence producers’ decisions related to the production of natural gas and the amount of NGLs processed from natural gas.

Commodity Prices - Crude oil, natural gas and NGL prices can be volatile due to changes in market conditions.  Commodity prices can also be affected by demand for products from the petrochemical industry and other consumers, storage injection and withdrawal rates, and available storage capacity.  The increase in natural gas supply from shale gas development has caused natural gas prices to remain low and natural gas location and seasonal price differentials to remain narrow across the regions where ONEOK Partners operates.  However, an increase in crude oil prices and the abundance of NGLs produced from the development of NGL-rich shale resource areas have made producing NGL feedstocks for the petrochemical industry more profitable.  ONEOK Partners is exposed to commodity-price risk in its natural gas gathering and processing business as a result of receiving commodities in exchange for services, primarily on POP contracts, and in its natural gas liquids business from the NGLs it purchases and sells.

The increased drilling activities and production have resulted in lower NGL prices, as well as minimal price volatility and narrower NGL location and seasonal price differentials for natural gas and NGLs in the markets we serve during 2013. We expect similar conditions in 2014; however, market conditions may produce periods of higher prices and volatility, as well as wider NGL location and product price differentials. For example, in the fourth quarter 2013, the price of propane increased significantly, and the price differential of propane between the Conway, Kansas, and the Mont Belvieu, Texas, market centers also widened in favor of Conway, Kansas, due to colder than normal weather and lower propane inventory levels. We expect

propane prices to remain high through the 2014 winter heating season. The abundance of NGLs produced from the development of shale and other resource areas has made NGL feedstocks to the petrochemical industry less costly.  Ethane production has increased more rapidly than the petrochemical industry's current capability to consume the increase in supplies. This oversupplied situation contributed to low ethane prices in 2013. While petrochemical demand remained strong in 2013 and ethane inventory levels decreased, ONEOK Partners believes the oversupply of ethane may persist until ethylene producers increase their capacity to consume additional ethane feedstock volumes through plant modifications and expansions and the completion of announced new world-scale ethylene capacity. In the near term, ONEOK Partners expects continued ethane price volatility and ethane rejection to balance supply and demand.

ONEOK Partners is also exposed to market risk associated with the location price differentials between receipt and delivery points along its natural gas and natural gas liquids pipelines, also known as location differentials. Its natural gas liquids business is exposed to market risk associated with changes in the price of NGLs; the location differential between the Mid-Continent, Chicago, Illinois, and Gulf Coast regions; and the relative price differential between natural gas, NGLs and individual NGL products, which affect its NGL purchases, sales and margins related to its NGL exchange, storage, transportation and optimization activities.  When natural gas prices are higher relative to NGL prices, NGL production may decline due to ethane rejection, which could negatively affect ONEOK Partners’ exchange services and transportation revenues.  When the NGL location price differential between the Mid-Continent and Gulf Coast market centers is narrow, optimization opportunities and NGL shipments may decline, resulting in a decline in earnings from our NGL optimization and marketing activities. During 2013, strong production and supply growth from the development of NGL-rich areas, increased demand in the Mid-Continent region and increased capacity available on pipelines that connect the Mid-Continent and Gulf Coast market centers resulted in NGL price differentials remaining narrow between the Mid-Continent market center at Conway, Kansas, and the Gulf Coast market center at Mont Belvieu, Texas.  NGL storage revenue may be affected by price volatility and forward pricing of NGL physical contracts versus the price of NGLs on the spot market.

To minimize the risk from market price fluctuations of natural gas, NGLs and crude oil, ONEOK Partners uses commodity derivative instruments such as futures, swaps and physical-forward contracts to manage commodity-price risk associated with existing or anticipated purchase and sale agreements, existing physical natural gas or NGLs in storage and location price differentials.

Seasonality - Our ONEOK Partners segment’s products and services are subject to weather-related seasonal demand.  Cold temperatures typically increase demand for natural gas and propane, which are used to heat homes and businesses.  Extreme warm or cold temperatures typically drive demand for natural gas used for natural gas-fired electric generation needed to meet the electricity-generation demand required to heat and cool residential and commercial properties.  Precipitation levels also can impact the demand for natural gas that is used to fuel irrigation activity in the Mid-Continent region and demand for propane used to fuel crop-drying activity.  Demand for butanes and natural gasoline, which are used primarily by the refining industry as blending stocks for motor fuel, denaturant for ethanol and diluents for crude oil, may also be subject to some variability during seasonal periods when certain government restrictions on motor fuel blending products are in place.  During periods of peak demand for a certain commodity, prices for that product typically increase, which may influence natural gas processing and NGL fractionation decisions. During late 2013, ONEOK Partners’ natural gas liquids business experienced high propane demand for crop drying, international exports and home heating due to colder than normal winter weather.

Competition - ONEOK Partners’ natural gas and natural gas liquids businesses compete directly with other companies for natural gas and NGL supply, markets and services.  Competition for natural gas transportation services continues to increase as new infrastructure projects are completed and the FERC and state regulatory bodies continue to encourage additional competition in the natural gas markets.  Competition is based primarily on fees for services, quality of services provided, current and forward natural gas and NGL prices and proximity to supply areas and markets.  ONEOK Partners believes that the location and integration of its assets enable it to compete effectively.

ONEOK Partners’ natural gas gathering and processing business competes for natural gas supplies with major integrated oil companies, independent exploration and production companies that have gathering and processing assets, pipeline companies and their affiliated marketing companies, national and local natural gas gatherers and processors, and marketers in the Mid-Continent and Rocky Mountain regions. ONEOK Partners’ natural gas liquids business competes with other fractionators, intrastate and interstate pipeline companies, storage providers, gatherers and transporters for NGL supplies in the Rocky Mountain, Mid-Continent and Gulf Coast regions.  The factors that typically affect ONEOK Partners’ ability to compete for natural gas and NGL supply are:

ONEOK Partners is responding to these factors by making capital investments to access new supply by increasing gathering, processing, fractionation and distribution capacity; increasing storage, withdrawal and injection capabilities; and improving natural gas processing efficiency and reducing operating costs.  ONEOK Partners’ competitors are constructing or have completed new natural gas gathering and processing facilities and natural gas liquids pipelines and fractionators to address the growing natural gas and NGL supply and petrochemical demand.  ONEOK Partners is also evaluating opportunities to maximize earnings and renegotiating low-margin contracts to improve margins and reduce risk. When completed, ONEOK Partners’ growth projects and those of its competitors are expected to alleviate constraints between the Conway, Kansas, and Mont Belvieu, Texas, natural gas liquids market centers. As a result, we expect the narrow location price differentials between the Mid-Continent and Gulf Coast market centers to continue. In addition, new natural gas liquids pipeline projects are expected to bring incremental NGL supply from the Rocky Mountain, Marcellus and Utica basins to the Mont Belvieu market center that may affect NGL prices, as well as compete with or displace NGL supply volumes from the Mid-Continent and Rocky Mountain regions where our assets are located. We believe ONEOK Partners’ natural gas gathering and processing, NGL fractionation, pipelines and storage assets are located strategically, connecting diverse supply areas to market centers.

Government Regulation - The FERC traditionally has maintained that a natural gas processing plant is not a facility for the transportation or sale for resale of natural gas in interstate commerce and, therefore, is not subject to jurisdiction under the Natural Gas Act.  Although the FERC has made no specific declaration as to the jurisdictional status of ONEOK Partners’ natural gas processing operations or facilities, ONEOK Partners’ natural gas processing plants are primarily involved in extracting NGLs and, therefore, ONEOK Partners believes its natural gas processing plants are exempt from FERC jurisdiction. The Natural Gas Act also exempts natural gas gathering facilities from the jurisdiction of the FERC.  ONEOK Partners believes its natural gas gathering facilities and operations meet the criteria used by the FERC for nonjurisdictional gathering facility status.  Interstate transmission facilities remain subject to FERC jurisdiction.  The FERC has distinguished historically between these two types of facilities, either interstate or intrastate, on a fact-specific basis.  ONEOK Partners also transports residue gas from its natural gas processing plants to interstate pipelines in accordance with Section 311(a) of the Natural Gas Policy Act.

Oklahoma, Kansas, Wyoming, Montana and North Dakota also have statutes regulating, in various degrees, the gathering of natural gas in those states.  In each state, regulation is applied on a case-by-case basis if a complaint is filed against the gatherer with the appropriate state regulatory agency.

The operations and revenues of ONEOK Partners’ natural gas liquids pipelines are regulated by various state and federal government agencies.  Its interstate natural gas liquids pipelines are regulated by the FERC, which has authority over the terms and conditions of service and rates, including depreciation and amortization policies, and initiation of service.  In Oklahoma, Kansas and Texas, ONEOK Partners’ intrastate natural gas liquids pipelines that provide common carrier service are subject to the jurisdiction of the OCC, KCC and RRC, respectively.

PHMSA has asserted jurisdiction over certain portions of ONEOK Partners’ natural gas liquids fractionation facilities in Bushton, Kansas, that ONEOK Partners believes are not subject to its jurisdiction. ONEOK Partners has objected to the scope of PHMSA’s jurisdiction and is seeking resolution of this matter. We do not anticipate that the cost of compliance will have a material adverse effect on our consolidated results of operations, financial position or cash flows.

ONEOK Partners’ interstate natural gas pipelines are regulated under the Natural Gas Act and Natural Gas Policy Act, which give the FERC jurisdiction to regulate virtually all aspects of the pipeline activities.  ONEOK Partners’ intrastate natural gas transportation assets in Oklahoma, Kansas and Texas are regulated by the OCC, KCC and RRC, respectively.  ONEOK Partners has flexibility in establishing natural gas transportation rates with customers.  However, there are maximum rates that ONEOK Partners can charge its customers in Oklahoma and Kansas.

Recent EPA regulations on emissions from coal-fired electric-generation plants, including the Maximum Achievable Control Technology Standards and the Mercury and Air Toxics Standards, have increased the demand for natural gas as a fuel for

electric generation, as well as related transportation and storage services. The demand for natural gas and related transportation and storage services is expected to increase over the next several years as these regulations continue to be implemented.

In November 2012, the FERC initiated a review of Viking Gas Transmission’s rates pursuant to Section 5 of the Natural Gas Act.  The parties reached agreement on the terms of a settlement that provides for a 2 percent reduction in transportation rates.  The settlement was approved by the FERC in December 2013, and the revised rates became effective January 1, 2014.

See further discussion in the “Environmental and Safety Matters” section.

Unconsolidated Affiliates - Our ONEOK Partners segment has investments in unconsolidated affiliates that include Northern Border Pipeline, Overland Pass Pipeline Company, three partnerships that operate natural gas gathering systems located primarily in the Powder River of Wyoming and other investments.  Northern Border Pipeline is a leading transporter of natural gas imported from Canada into the United States.  Overland Pass Pipeline Company operates an interstate natural gas liquids pipeline system that transports natural gas liquids from the Rocky Mountain region to the Mid-Continent NGL market center.

See Note P of the Notes to Consolidated Financial Statements in this Annual Report for additional discussion of ONEOK Partners’ unconsolidated affiliates.

Natural Gas Distribution

Separation of Natural Gas Distribution Business - On January 31, 2014, we completed the separation of our natural gas distribution business into a standalone publicly traded company, ONE Gas.  ONE Gas consists of ONEOK’s former Natural Gas Distribution segment that includes Kansas Gas Service, Oklahoma Natural Gas and Texas Gas Service.  See additional discussion in Note U of the Notes to the Consolidated Financial Statements. The Natural Gas Distribution segment has been classified as discontinued operations effective February 1, 2014.

Overview - Our former Natural Gas Distribution segment provides natural gas distribution services to more than 2 million customers in Oklahoma, Kansas and Texas through Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, serving residential, commercial, industrial and transportation customers in all three states.  In addition, our former LDCs serve wholesale and public authority customers.  Its operations are subject to regulations and oversight of various regulatory agencies.

Our operating results were affected primarily by the number of customers, usage and the ability to collect service fees that provided a reasonable rate of return on our investment and recovery of our cost of service.  Natural gas costs were passed through to our customers based on the actual cost of natural gas purchased by the respective natural gas distribution company and related expenses, including transportation and storage costs.  Substantial fluctuations in natural gas sales could occur from year to year without materially or adversely impacting our former LDCs’ net margin, since the fluctuations in natural gas costs affected natural gas sales and cost of gas by an equivalent amount.

Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service distribute natural gas as public utilities to approximately 87 percent, 69 percent and 14 percent of the natural gas distribution customers in Oklahoma, Kansas and Texas, respectively. Natural gas sold to residential and commercial customers as a percentage of our former LDC’s total natural gas sales by state is presented in the table below:

Market Conditions and Seasonality - Natural gas supply requirements are affected by weather conditions.  In addition, economic conditions affect the requirements of our former LDCs’ commercial and industrial customers.  Natural gas usage per residential customer may decline as customers change their consumption patterns in response to a variety of factors including:  

In each jurisdiction in which our former natural gas distribution segment operated, changes in customer-usage profiles were considered in the periodic redesign of rates.

In managing our natural gas supply portfolios, we partially mitigated price volatility, using a combination of physical and financial derivatives and natural gas in storage.  We had natural gas financial hedging programs authorized by the regulatory authorities in each state in which our former LDCs do business.  We did not utilize financial derivatives for speculative purposes nor did we have trading operations associated with our former Natural Gas Distribution segment.  We utilized 57.3 Bcf of contracted storage capacity in 2013 , which allowed natural gas to be purchased during the off-peak season and stored for use in the winter periods.

Demand - See discussion below under “Seasonality” for factors affecting demand for our former natural gas distribution business.

Seasonality - Natural gas sales to residential and commercial customers are seasonal, as a substantial portion of their natural gas requirements are for heating.  Accordingly, the volume of natural gas sales is higher normally during the months of November through March than in other months of the year.  The impact on margins for our former LDCs resulting from weather temperatures that are above or below normal is offset partially through weather-normalization adjustment (WNA) mechanisms.  These adjustments have been approved by the regulatory authorities for our Oklahoma, Kansas and certain Texas service territories.  WNAs allow us to increase customer billing to offset lower gas usage when weather is warmer than normal and decrease customer billing to offset higher gas usage when weather is colder than normal.

Government Regulation - Rates charged for natural gas transportation services by the LDCs in our former Natural Gas Distribution segment are established by the OCC for Oklahoma Natural Gas and by the KCC for Kansas Gas Service.  Texas Gas Service is subject to regulatory oversight by the various municipalities that it serves, which have primary jurisdiction in their respective areas. Rates in unincorporated areas of Texas and all appellate matters are subject to regulatory oversight by the RRC.  Natural gas supply costs for our former LDCs are passed on to its customers through a purchased-gas cost-adjustment mechanism.  Our former LDCs did not make a profit on the cost of natural gas.

See further discussion in the “Environmental and Safety Matters” section.

Energy Services

Overview - In June 2013, we announced we would discontinue our Energy Services segment through an accelerated wind down process. Our Energy Services segment has faced challenging natural gas market conditions that showed no signs of improving. Increased natural gas supply and infrastructure, coupled with lower natural gas price volatility and narrowed seasonal and location natural gas price differentials has resulted in limited opportunities to generate revenues to cover our fixed costs on contracted storage and transportation capacity. We executed agreements in 2013 to release a significant portion of our nonaffiliated natural gas transportation and storage contracts to third parties. In addition, pursuant to a request for proposal, our Energy Services segment assigned contracts for 18.0 Bcf of storage capacity leased from an affiliate to our Natural Gas Distribution segment effective June 2013. We expect the Energy Services segment to be classified as discontinued operations, effective April 1, 2014, when substantially all operations of the segment will have ceased.

As a result of the accelerated wind down, in 2013 we recorded noncash charges of approximately $138.6 million , before taxes, which were recorded in cost of sales and fuel in our Consolidated Statements of Income. We expect future cash expenditures associated with the released transportation and storage capacity from the wind down of our Energy Services segment to be approximately $80 million on an after-tax basis, which consist of approximately $33 million in 2014, $24 million in 2015, $13 million in 2016 and $10 million during the period from 2017 through 2023.

During the wind down process, we retained 23.5 Bcf of contracted natural gas storage capacity of which 20.5 will expire by March 31, 2014. In the first quarter 2014, we assigned the remaining 3.0 Bcf of natural gas storage capacity to a third party, effective April 1, 2014, and we expect to record an additional noncash charge of approximately $1.7 million , before taxes. We will utilize this capacity through March 31, 2014, to serve our contracted premium services customers by providing natural gas supply and risk-management services for natural gas and electric utilities and industrial customers. Premium services volumes, revenues and cost of sales decreased materially as we have realigned our business operations with the remaining contracted capacity. Our premium services include next-day and no-notice natural gas delivery services. Next-day services allow our customers to call on additional natural gas supply up to an amount agreed upon in a service contract and expect delivery the following day. No-notice services allow customers to call on additional natural gas supply and expect immediate delivery.  We also provide weather-related protection and other custom solutions based on our customers’ specific needs.

Government Regulation - Our Energy Services segment purchases natural gas for resale at negotiated rates in interstate commerce.  As such, it has been granted by FERC an automatic blanket certificate of public convenience and necessity authorizing such sales.  This is a limited certificate that does not subject our Energy Services segment to any other regulation of FERC under its Natural Gas Act jurisdiction.  Holders of blanket marketing certificates are subject to certain reporting and document retention requirements.

SEGMENT FINANCIAL INFORMATION

Operating Income, Customers and Total Assets - See Note S of the Notes to Consolidated Financial Statements in this Annual Report for disclosure by segment of our operating income and total assets and for a discussion of revenues from external customers.

Other

Through ONEOK Leasing Company, L.L.C. and ONEOK Parking Company, L.L.C., we own a parking garage and an office building (ONEOK Plaza) in downtown Tulsa, Oklahoma, where our headquarters are located.  ONEOK Leasing Company, L.L.C. leases excess office space to others and operates our headquarters office building.  ONEOK Parking Company, L.L.C. owns and operates a parking garage adjacent to our headquarters.

FINANCIAL MARKETS LEGISLATION

The Dodd-Frank Act represents a far-reaching overhaul of the framework for regulation of United States financial markets. The CFTC has issued final regulations for most of the provisions of the Dodd-Frank Act, and we have implemented measures to comply with the regulations that are applicable to our businesses. ONEOK Partners continues to participate in financial markets for hedging certain risks inherent in our business, including commodity-price and interest-rate risks. Although the impact to date has not been material, ONEOK Partners continues to monitor proposed regulations and the impact the regulations may have on its business and risk-management strategies in the future.

ENVIRONMENTAL AND SAFETY MATTERS

Additional information about our environmental matters is included in Note R of the Notes to Consolidated Financial Statements in this Annual Report.

Environmental Matters -   We are subject to multiple historical preservation, wildlife preservation and environmental laws and/or regulations that affect many aspects of our present and future operations.  Regulated activities include, but are not limited to, those involving air emissions, storm water and wastewater discharges, handling and disposal of solid and hazardous wastes, wetland preservation, hazardous materials transportation, and pipeline and facility construction.  These laws and regulations require us to obtain and/or comply with a wide variety of environmental clearances, registrations, licenses, permits and other approvals.  Failure to comply with these laws, regulations, licenses and permits may expose us to fines, penalties and/or interruptions in our operations that could be material to our results of operations.  For example, if a leak or spill of hazardous substances or petroleum products occurs from pipelines or facilities that we own, operate or otherwise use, we could be held jointly and severally liable for all resulting liabilities, including response, investigation and cleanup costs, which could affect materially our results of operations and cash flows.  In addition, emissions controls and/or other regulatory or permitting mandates under the Clean Air Act and other similar federal and state laws could require unexpected capital expenditures at our facilities. We cannot assure that existing environmental statutes and regulations will not be revised or that new regulations will not be adopted or become applicable to us.

In June 2013, the Executive Office of the President of the United States issued the President’s Climate Action Plan, which includes, among other things, plans for further regulatory actions to reduce carbon emissions from various sources. The impact of any such regulatory actions on our facilities and operations is unknown. Revised or additional statutes or regulations that result in increased compliance costs or additional operating restrictions could have a significant impact on our business, financial position, results of operations and cash flows.

Pipeline Safety - We are subject to PHMSA regulations, including pipeline integrity-management regulations.  The Pipeline Safety Improvement Act of 2002 requires pipeline companies operating high-pressure pipelines to perform integrity assessments on pipeline segments that pass through densely populated areas or near specifically designated high-consequence areas.  In January 2012, The Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 was signed into law.  The law increased maximum penalties for violating federal pipeline safety regulations and directs the DOT and Secretary of Transportation to conduct further review or studies on issues that may or may not be material to us. These issues include but are not limited to the following:

The potential capital and operating expenditures related to this legislation, the associated regulations or other new pipeline safety regulations are unknown.

Air and Water Emissions - The Clean Air Act, the Clean Water Act, and analogous state laws and/or regulations promulgated thereunder, impose restrictions and controls regarding the discharge of pollutants into the air and water in the United States. Under the Clean Air Act, a federally enforceable operating permit is required for sources of significant air emissions. We may be required to incur certain capital expenditures for air-pollution-control equipment in connection with obtaining or maintaining permits and approvals for sources of air emissions.  The Clean Water Act imposes substantial potential liability for the removal of pollutants discharged to waters of the United States and remediation of waters affected by such discharge.

Federal, state and regional initiatives to measure and regulate greenhouse gas emissions are underway.  We monitor all relevant federal and state legislation to assess the potential impact on our operations.  The EPA’s Mandatory Greenhouse Gas Reporting Rule requires annual greenhouse gas emissions reporting from affected facilities and the carbon dioxide emissions equivalents for the natural gas delivered by us to our natural gas distribution customers who are not otherwise required to report their own emissions and the emissions equivalents for all NGLs produced by ONEOK Partners as if all of these products were combusted, even if they are used otherwise.

Our 2012 total reported emissions were approximately 64.9 million metric tons of carbon dioxide equivalents. This total includes direct emissions from the combustion of fuel in our equipment, such as compressor engines and heaters, as well as carbon dioxide equivalents from natural gas and NGL products delivered to customers and produced, as if all such fuel and NGL products were combusted. The additional cost to gather and report this emissions data did not have, and we do not expect it to have, a material impact on our results of operations, financial position or cash flows.  In addition, Congress has considered, and may consider in the future, legislation to reduce greenhouse gas emissions, including carbon dioxide and methane. Likewise, the EPA may institute additional regulatory rulemaking associated with greenhouse gas emissions from the oil and gas industry. At this time, no rule or legislation has been enacted that assesses any costs, fees or expenses on any of these emissions.

The EPA’s “Tailoring Rule” regulates greenhouse gas emissions at new or modified facilities that meet certain criteria. Affected facilities are required to review best available control technology, conduct air-quality and impact analyses and public reviews with respect to such emissions.  At current emissions threshold levels, this rule has had a minimal impact on our existing facilities.  The EPA has stated it will consider lowering the threshold levels over the next five years, which could increase the impact on our existing facilities; however, potential costs, fees or expenses associated with the potential adjustments are unknown.

The EPA’s rule on air-quality standards, titled “National Emissions Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines,” also known as RICE NESHAP, initially included a compliance date in 2013.  Subsequent industry appeals and settlements with the EPA have extended timelines for compliance associated with the final RICE NESHAP rule. While the rule could require capital expenditures for the purchase and installation of new emissions-control equipment, we do not expect these expenditures will have a material impact on our results of operations, financial position or cash flows.

In July 2011, the EPA issued a proposed rule that would change the air emissions New Source Performance Standards, also known as NSPS, and Maximum Achievable Control Technology requirements applicable to the oil and natural gas industry, including natural gas production, processing, transmission and underground storage sectors. In April 2012, the EPA released

the final rule, which includes new NSPS and air toxic standards for a variety of sources within natural gas processing plants, oil and natural gas production facilities and natural gas transmission stations. The rule also regulates emissions from the hydraulic fracturing of wells for the first time. The EPA’s final rule reflects significant changes from the proposal issued in 2011 and allows for more manageable compliance options. The NSPS final rule became effective in October 2012, but the dates for compliance vary and depend in part upon the type of affected facility and the date of construction, reconstruction or modification.

In March 2013, the EPA issued proposed rulemaking to amend the NSPS for the crude oil and natural gas industry, pursuant to various industry comments, administrative petitions for reconsideration and/or judicial appeals of portions of the NSPS final rule. The rule was most recently amended again in September 2013, and the EPA has indicated that further amendments may be issued in 2014. Based on the amendments and our understanding of pending stakeholder responses to the NSPS rule, we do not expect future capital, operations and maintenance costs resulting from compliance with the regulation to be material. However, the EPA may issue additional responses, amendments and/or policy guidance on the final rule, which could alter our present expectations. Generally, the NSPS rule will require expenditures for updated emissions controls, monitoring and record-keeping requirements at affected facilities in the crude oil and natural gas industry. We do not expect these expenditures will have a material impact on our results of operations, financial position or cash flows.

CERCLA - The federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), also commonly known as Superfund, imposes strict, joint and several liability, without regard to fault or the legality of the original act, on certain classes of “persons” (defined under CERCLA) who caused and/or contributed to the release of a hazardous substance into the environment.  These persons include, but are not limited to, the owner or operator of a facility where the release occurred and/or companies that disposed or arranged for the disposal of the hazardous substances found at the facility. Under CERCLA, these persons may be liable for the costs of cleaning up the hazardous substances released into the environment, damages to natural resources and the costs of certain health studies. We do not expect our responsibilities under CERCLA will have a material impact on our results of operations, financial position or cash flows.

Chemical Site Security - The United States Department of Homeland Security (Homeland Security) released an interim rule in April 2007 that requires companies to provide reports on sites where certain chemicals, including many hydrocarbon products, are stored.  We completed the Homeland Security assessments, and our facilities subsequently were assigned one of four risk-based tiers ranging from high (Tier 1) to low (Tier 4) risk, or not tiered at all due to low risk.  To date, four of our facilities have been given a Tier 4 rating.  Facilities receiving a Tier 4 rating are required to complete Site Security Plans and possible physical security enhancements.  We do not expect the Site Security Plans and possible security enhancements cost to have a material impact on our results of operations, financial position or cash flows.

Pipeline Security - Homeland Security’s Transportation Security Administration and the DOT have completed a review and inspection of our “critical facilities” and identified no material security issues.  Also, the Transportation Security Administration has released new pipeline security guidelines that include broader definitions for the determination of pipeline “critical facilities.”  We have reviewed our pipeline facilities according to the new guideline requirements, and there have been no material changes required to date.

Environmental Footprint - Our environmental and climate change strategy focuses on minimizing the impact of our operations on the environment. These strategies include:  (i) developing and maintaining an accurate greenhouse gas emissions inventory according to current rules issued by the EPA; (ii) improving the efficiency of our various pipelines, natural gas processing facilities and natural gas liquids fractionation facilities; (iii) following developing technologies for emissions control and the capture of carbon dioxide to keep it from reaching the atmosphere; and (iv) utilizing practices to reduce the loss of methane from our facilities.

We participate in the EPA’s Natural Gas STAR Program to voluntarily reduce methane emissions.  We continue to focus on maintaining low rates of lost-and-unaccounted-for natural gas through expanded implementation of best practices to limit the release of natural gas during pipeline and facility maintenance and operations.

EMPLOYEES

At February 1, 2014, we employed 1,927 people.

No family relationships exist between any of the executive officers, nor is there any arrangement or understanding between any executive officer and any other person pursuant to which the officer was selected.

INFORMATION AVAILABLE ON OUR WEBSITE

We make available, free of charge, on our website ( www.oneok.com ) copies of our Annual Reports, Quarterly Reports, Current Reports on Form 8-K, amendments to those reports filed or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act and reports of holdings of our securities filed by our officers and directors under Section 16 of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC.  Copies of our Code of Business Conduct and Ethics, Governance Guidelines, Partnership Agreement and the written charter of our Audit Committee are also available on our website, and we will provide copies of these documents upon request.  Our website and any contents thereof are not incorporated by reference into this report.

We also make available on our website the Interactive Data Files required to be submitted and posted pursuant to Rule 405 of Regulation S-T.