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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

XQuarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2007

OR

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For
the transition period from  to .

Commission file number 1-12202

ONEOK PARTNERS, L.P.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 93-1120873                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|100 West Fifth Street, Tulsa, OK                               |  | 74103-4298                          
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code  (918) 588-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X  No

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer
X                                      Accelerated filer

                                        
    Non-accelerated filer __

Indicate by checkmark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).

Yes  No X

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|              |  |                                
|------------- |  | -------------------------------
|Class         |  | Outstanding at October 31, 2007
|Common units  |  | 46,397,214 units               
|Class B units |  | 36,494,126 units               





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ONEOK PARTNERS, L.P.

QUARTERLY REPORT ON FORM 10-Q



|          |  |                                                                                                                      |  |         
|--------- |  | -------------------------------------------------------------------------------------------------------------------- |  | --------
|          |  |                                                                                                                     
|Part I.   |  | Financial Information                                                                                                |  | Page No.
|          |  |                                                                                                                     
|Item 1.   |  | Financial Statements (Unaudited)                                                                                     |  |         
|          |  |                                                                                                                     
|          |  | Consolidated Statements of Income -Three and Nine Months Ended September 30, 2007 and 2006                           |  | 5       
|          |  |                                                                                                                     
|          |  | Consolidated Balance Sheets -September 30, 2007 and December 31, 2006                                                |  | 6       
|          |  |                                                                                                                     
|          |  | Consolidated Statements of Cash Flows -Nine Months Ended September 30, 2007 and 2006                                 |  | 7       
|          |  |                                                                                                                     
|          |  | Consolidated Statement of Changes in Partners Equity and ComprehensiveIncome - Nine Months Ended September 30, 2007 |  | 8-9     
|          |  |                                                                                                                     
|          |  | Notes to Consolidated Financial Statements                                                                           |  | 10-21   
|          |  |                                                                                                                     
|Item 2.   |  | Managements Discussion and Analysis ofFinancial Condition and Results of Operations                                 |  | 22-37   
|          |  |                                                                                                                     
|Item 3.   |  | Quantitative and Qualitative Disclosures About Market Risk                                                           |  | 37-39   
|          |  |                                                                                                                     
|Item 4.   |  | Controls and Procedures                                                                                              |  | 39      
|          |  |                                                                                                                     
|Part II.  |  | Other Information                                                                                                    |  |         
|          |  |                                                                                                                     
|Item 1.   |  | Legal Proceedings                                                                                                    |  | 39      
|          |  |                                                                                                                     
|Item 1A.  |  | Risk Factors                                                                                                         |  | 39-40   
|          |  |                                                                                                                     
|Item 2.   |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                          |  | 40      
|          |  |                                                                                                                     
|Item 3.   |  | Defaults Upon Senior Securities                                                                                      |  | 40      
|          |  |                                                                                                                     
|Item 4.   |  | Submission of Matters to a Vote of Security Holders                                                                  |  | 40      
|          |  |                                                                                                                     
|Item 5.   |  | Other Information                                                                                                    |  | 40      
|          |  |                                                                                                                     
|Item 6.   |  | Exhibits                                                                                                             |  | 40-41   
|          | 
|Signature |  | 42                                                                                                                  

In this Quarterly Report, references to we, our, us or the
Partnership refer to ONEOK Partners, L.P. and its subsidiary, ONEOK Partners Intermediate Limited Partnership and its subsidiaries.

The
statements in this Quarterly Report on Form 10-Q that are not historical information, including statements concerning plans and objectives of management for future operations, economic performance or related assumptions, are forward-looking
statements. Forward-looking statements may include words such as anticipate, estimate, expect, project, intend, plan, believe, should, goal,
forecast and other words and terms of similar meaning. Although we believe that our expectations regarding future events are based on reasonable assumptions, we can give no assurance that our goals will be achieved. Important factors
that could cause actual results to differ materially from those in the forward-looking statements are described under Part I, Item 2, Managements Discussion and Analysis of Financial Condition and Results of OperationsForward
Looking Statements and Part II, Item 1A, Risk Factors, in this Quarterly Report on Form 10-Q and under Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31,
2006.



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Glossary

The abbreviations, acronyms, and industry terminology used in this Quarterly Report are defined as follows:



|                               |  |                                                                                                          
|------------------------------ |  | ---------------------------------------------------------------------------------------------------------
|AFUDC                          |  | Allowance for funds used during construction                                                             
|Bbl                            |  | Barrels, equivalent to 42 United States gallons                                                          
|Bbl/d                          |  | Barrels per day                                                                                          
|BBtu/d                         |  | Billion British thermal units per day                                                                    
|Bcf                            |  | Billion cubic feet                                                                                       
|Bcf/d                          |  | Billion cubic feet per day                                                                               
|Btu                            |  | British thermal units                                                                                    
|EITF                           |  | Emerging Issues Task Force                                                                               
|Exchange Act                   |  | Securities Exchange Act of 1934, as amended                                                              
|FASB                           |  | Financial Accounting Standards Board                                                                     
|FERC                           |  | Federal Energy Regulatory Commission                                                                     
|FIN                            |  | FASB Interpretation                                                                                      
|Fort Union Gas Gathering       |  | Fort Union Gas Gathering, L.L.C.                                                                         
|GAAP                           |  | United States Generally Accepted Accounting Principles                                                   
|Guardian Pipeline              |  | Guardian Pipeline, L.L.C.                                                                                
|LIBOR                          |  | London Interbank Offered Rate                                                                            
|MBbl                           |  | Thousand barrels                                                                                         
|MBbl/d                         |  | Thousand barrels per day                                                                                 
|Mcf                            |  | Thousand cubic feet                                                                                      
|Midwestern Gas Transmission    |  | Midwestern Gas Transmission Company                                                                      
|MMBbl                          |  | Million barrels                                                                                          
|MMBtu                          |  | Million British thermal units                                                                            
|MMBtu/d                        |  | Million British thermal units per day                                                                    
|MMcf                           |  | Million cubic feet                                                                                       
|MMcf/d                         |  | Million cubic feet per day                                                                               
|Moodys                        |  | Moodys Investors Service                                                                                
|NBP Services                   |  | NBP Services, LLC, a subsidiary of ONEOK                                                                 
|NGL                            |  | Natural gas liquids                                                                                      
|Northern Border Pipeline       |  | Northern Border Pipeline Company                                                                         
|NYMEX                          |  | New York Mercantile Exchange                                                                             
|OBPI                           |  | ONEOK Bushton Processing Inc.                                                                            
|OkTex Pipeline                 |  | OkTex Pipeline Company                                                                                   
|ONEOK                          |  | ONEOK, Inc.                                                                                              
|ONEOK NB                       |  | ONEOK NB Company, formerly known as Northwest Border Pipeline Company, a ONEOK subsidiary                
|ONEOK Partners                 |  | ONEOK Partners, L.P., formerly known as Northern Border Partners, L.P.                                   
|ONEOK Partners GP              |  | ONEOK Partners GP, L.L.C., formerly known as Northern Plains Natural Gas Company, LLC, a ONEOK subsidiary
|Overland Pass Pipeline Company |  | Overland Pass Pipeline Company LLC                                                                       
|Partnership Agreement          |  | Third Amended and Restated Agreement of Limited Partnership of ONEOK Partners, L.P., as amended          
|POP                            |  | Percent of Proceeds                                                                                      
|S&P                            |  | Standard & Poors Rating Group                                                                           
|SEC                            |  | Securities and Exchange Commission                                                                       
|Statement                      |  | Statement of Financial Accounting Standards                                                              
|TC PipeLines                   |  | TC PipeLines Intermediate Limited Partnership, a subsidiary of TC PipeLines, LP                          
|TransCanada                    |  | TransCanada Corporation                                                                                  



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PART IFINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ONEOK Partners, L.P. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME



|                                                          |  |                                                 |           |                                |   |           |  |      |           |  |   |           |  | 
|--------------------------------------------------------- |  | ----------------------------------------------- | --------- | ------------------------------ | - | --------- |  | ---- | --------- |  | - | --------- |  | 
|                                                          |  | Three Months EndedSeptember 30,                 |           | Nine Months EndedSeptember 30, |   |          
|(Unaudited)                                               |  | 2007                                            |           | 2006                           |   | 2007      |  | 2006 |           | 
|                                                          |  | (Thousands of dollars, except per unit amounts) |           |                               
|Revenues                                                  |  |                                                 |           |                                |   |           |  |      |           |  |   |           |  | 
|Operating revenue                                         |  | $                                               | 1,410,257 |                                | $ | 1,218,541 |  | $    | 3,954,245 |  | $ | 3,562,013 |  | 
|Cost of sales and fuel                                    |  |                                                 | 1,196,373 |                                |   | 1,007,075 |  |      | 3,317,421 |  |   | 2,935,374 |  | 
|Net Margin                                                |  |                                                 | 213,884   |                                |   | 211,466   |  |      | 636,824   |  |   | 626,639   |  | 
|Operating Expenses                                        |  |                                                 |           |                                |   |           |  |      |           |  |   |           |  | 
|Operations and maintenance                                |  |                                                 | 71,470    |                                |   | 68,206    |  |      | 212,517   |  |   | 204,127   |  | 
|Depreciation and amortization                             |  |                                                 | 28,800    |                                |   | 27,517    |  |      | 84,326    |  |   | 94,269    |  | 
|General taxes                                             |  |                                                 | 8,609     |                                |   | 8,106     |  |      | 24,866    |  |   | 23,019    |  | 
|Total Operating Expenses                                  |  |                                                 | 108,879   |                                |   | 103,829   |  |      | 321,709   |  |   | 321,415   |  | 
|Gain on Sale of Assets                                    |  |                                                 | 111       |                                |   | 36        |  |      | 1,935     |  |   | 115,402   |  | 
|Operating Income                                          |  |                                                 | 105,116   |                                |   | 107,673   |  |      | 317,050   |  |   | 420,626   |  | 
|Equity earnings from investments (Note H)                 |  |                                                 | 22,162    |                                |   | 22,788    |  |      | 64,975    |  |   | 72,750    |  | 
|Other income                                              |  |                                                 | 4,596     |                                |   | 890       |  |      | 11,556    |  |   | 5,150     |  | 
|Other expense                                             |  |                                                 | 125       |                                |   | 41        |  |      | 636       |  |   | 5,676     |  | 
|Interest expense                                          |  |                                                 | 33,510    |                                |   | 32,670    |  |      | 99,313    |  |   | 99,891    |  | 
|Income before Minority Interests and Income Taxes         |  |                                                 | 98,239    |                                |   | 98,640    |  |      | 293,632   |  |   | 392,959   |  | 
|Minority interests in income of consolidated subsidiaries |  |                                                 | 125       |                                |   | 134       |  |      | 302       |  |   | 2,272     |  | 
|Income before income taxes                                |  |                                                 | 98,114    |                                |   | 98,506    |  |      | 293,330   |  |   | 390,687   |  | 
|Income taxes                                              |  |                                                 | 2,198     |                                |   | 284       |  |      | 7,039     |  |   | 25,762    |  | 
|Net Income                                                |  | $                                               | 95,916    |                                | $ | 98,222    |  | $    | 286,291   |  | $ | 364,925   |  | 
|                                                         
|Limited partners interest in net income:                 |  |                                                 |           |                                |   |           |  |      |           |  |   |           |  | 
|Net income                                                |  | $                                               | 95,916    |                                | $ | 98,222    |  | $    | 286,291   |  | $ | 364,925   |  | 
|General partners interest in net income                  |  |                                                 | 14,872    |                                |   | 11,736    |  |      | 42,203    |  |   | 63,481    |  | 
|Limited Partners Interest in Net Income                  |  | $                                               | 81,044    |                                | $ | 86,486    |  | $    | 244,088   |  | $ | 301,444   |  | 
|                                                         
|Limited partners per unit net income:                    |  |                                                 |           |                                |   |           |  |      |           |  |   |           |  | 
|Net income per unit (Note I)                              |  | $                                               | 0.98      |                                | $ | 1.04      |  | $    | 2.94      |  | $ | 4.26      |  | 
|                                                         
|Number of Units Used in Computation (Thousands)           |  |                                                 | 82,891    |                                |   | 82,891    |  |      | 82,891    |  |   | 70,727    |  | 
|                                                         

See accompanying Notes to Consolidated Financial Statements.



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ONEOK Partners, L.P. and Subsidiaries

CONSOLIDATED BALANCE SHEETS



|                                                                                                    |  |                        |           |   |                  |   |           |   |  | 
|--------------------------------------------------------------------------------------------------- |  | ---------------------- | --------- | - | ---------------- | - | --------- | - |  | 
|(Unaudited)                                                                                         |  | September 30,2007      |           |   | December 31,2006 |   |           |  
|Assets                                                                                              |  | (Thousands of dollars) |           |   |                 
|Current Assets                                                                                      |  |                        |           |   |                  |   |           |   |  | 
|Cash and cash equivalents                                                                           |  | $                      | 794,418   |   |                  | $ | 21,102    |   |  | 
|Accounts receivable, net                                                                            |  |                        | 381,667   |   |                  |   | 298,602   |   |  | 
|Affiliate receivables                                                                               |  |                        | 42,922    |   |                  |   | 88,572    |   |  | 
|Gas and natural gas liquids in storage                                                              |  |                        | 227,498   |   |                  |   | 198,141   |   |  | 
|Commodity exchanges and imbalances                                                                  |  |                        | 44,385    |   |                  |   | 53,433    |   |  | 
|Other                                                                                               |  |                        | 22,741    |   |                  |   | 33,388    |   |  | 
|Total Current Assets                                                                                |  |                        | 1,513,631 |   |                  |   | 693,238   |   |  | 
|                                                                                                    |  |                        |          
|Property, Plant and Equipment                                                                       |  |                        |           |   |                  |   |           |   |  | 
|Property, plant and equipment                                                                       |  |                        | 3,841,227 |   |                  |   | 3,424,452 |   |  | 
|Accumulated depreciation and amortization                                                           |  |                        | 741,878   |   |                  |   | 660,804   |   |  | 
|Net Property, Plant and Equipment (Note A)                                                          |  |                        | 3,099,349 |   |                  |   | 2,763,648 |   |  | 
|                                                                                                    |  |                        |          
|Investments and Other Assets                                                                        |  |                        |           |   |                  |   |           |   |  | 
|Investment in unconsolidated affiliates (Note H)                                                    |  |                        | 741,310   |   |                  |   | 748,879   |   |  | 
|Goodwill and intangible assets (Note D)                                                             |  |                        | 684,001   |   |                  |   | 689,751   |   |  | 
|Other                                                                                               |  |                        | 26,629    |   |                  |   | 26,201    |   |  | 
|Total Investments and Other Assets                                                                  |  |                        | 1,451,940 |   |                  |   | 1,464,831 |   |  | 
|Total Assets                                                                                        |  | $                      | 6,064,920 |   |                  | $ | 4,921,717 |   |  | 
|                                                                                                   
|                                                                                                    |  |                        |          
|Liabilities and Partners Equity                                                                    |  |                        |           |   |                  |   |           |   |  | 
|                                                                                                    |  |                        |          
|Current Liabilities                                                                                 |  |                        |           |   |                  |   |           |   |  | 
|Current maturities of long-term debt                                                                |  | $                      | 11,931    |   |                  | $ | 11,931    |   |  | 
|Notes payable                                                                                       |  |                        | 365,000   |   |                  |   | 6,000     |   |  | 
|Accounts payable                                                                                    |  |                        | 508,847   |   |                  |   | 361,967   |   |  | 
|Affiliate payables                                                                                  |  |                        | 27,471    |   |                  |   | 25,737    |   |  | 
|Commodity exchanges and imbalances                                                                  |  |                        | 195,073   |   |                  |   | 175,927   |   |  | 
|Other                                                                                               |  |                        | 121,180   |   |                  |   | 89,471    |   |  | 
|Total Current Liabilities                                                                           |  |                        | 1,229,502 |   |                  |   | 671,033   |   |  | 
|                                                                                                    |  |                        |          
|Long-term Debt, net of current maturities                                                           |  |                        | 2,607,913 |   |                  |   | 2,019,598 |   |  | 
|                                                                                                    |  |                        |          
|Minority Interests in Consolidated Subsidiaries                                                     |  |                        | 5,761     |   |                  |   | 5,606     |   |  | 
|                                                                                                    |  |                        |          
|Deferred Credits and Other Liabilities                                                              |  |                        | 40,907    |   |                  |   | 36,818    |   |  | 
|                                                                                                    |  |                        |          
|Commitments and Contingencies                                                                       |  |                        |           |   |                  |   |           |   |  | 
|                                                                                                    |  |                        |          
|Partners Equity                                                                                    |  |                        |           |   |                  |   |           |   |  | 
|General partner                                                                                     |  |                        | 56,765    |   |                  |   | 54,373    |   |  | 
|Common units: 46,397,214 units issued and outstanding at September 30, 2007, and December 31, 2006  |  |                        | 802,423   |   |                  |   | 803,599   |   |  | 
|Class B units: 36,494,126 units issued and outstanding at September 30, 2007, and December 31, 2006 |  |                        | 1,331,323 |   |                  |   | 1,332,276 |   |  | 
|Accumulated other comprehensive loss                                                                |  |                        | (9,674    | ) |                  |   | (1,586    | ) |  | 
|Total Partners Equity                                                                              |  |                        | 2,180,837 |   |                  |   | 2,188,662 |   |  | 
|Total Liabilities and Partners Equity                                                              |  | $                      | 6,064,920 |   |                  | $ | 4,921,717 |   |  | 
|                                                                                                   

See accompanying Notes to Consolidated Financial Statements.



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ONEOK Partners, L.P. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                             |  |                                |                        |   |      |   |            |   |  | 
|-------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------------------- | - | ---- | - | ---------- | - |  | 
|                                                                                             |  | Nine Months EndedSeptember 30, |                        |   |     
|(Unaudited)                                                                                  |  | 2007                           |                        |   | 2006 |   |            |  
|Operating Activities                                                                         |  |                                | (Thousands of dollars) |   |      |  
|Net income                                                                                   |  | $                              | 286,291                |   |      | $ | 364,925    |   |  | 
|Depreciation and amortization                                                                |  |                                | 84,326                 |   |      |   | 94,269     |   |  | 
|Allowance for funds used during construction                                                 |  |                                | (14,411                | ) |      |   | -          |   |  | 
|Minority interests in income of consolidated subsidiaries                                    |  |                                | 302                    |   |      |   | 2,272      |   |  | 
|Equity earnings from investments                                                             |  |                                | (64,975                | ) |      |   | (72,750    | ) |  | 
|Distributions received from unconsolidated affiliates                                        |  |                                | 77,144                 |   |      |   | 93,209     |   |  | 
|Gain on sale of assets                                                                       |  |                                | (1,935                 | ) |      |   | (115,402   | ) |  | 
|Changes in assets and liabilities (net of acquisition and disposition effects):              |  |                                |                        |   |      |   |            |   |  | 
|Accounts receivable                                                                          |  |                                | (37,415                | ) |      |   | 61,863     |   |  | 
|Inventories                                                                                  |  |                                | (33,392                | ) |      |   | 130        |   |  | 
|Accounts payable and other current liabilities                                               |  |                                | 148,614                |   |      |   | 7,893      |   |  | 
|Commodity exchanges and imbalances, net                                                      |  |                                | 22,627                 |   |      |   | (1,803     | ) |  | 
|Accrued taxes other than income                                                              |  |                                | 6,561                  |   |      |   | (3,617     | ) |  | 
|Accrued interest                                                                             |  |                                | 23,086                 |   |      |   | 2,623      |   |  | 
|Derivative financial instruments                                                             |  |                                | 3,336                  |   |      |   | (2,973     | ) |  | 
|Other                                                                                        |  |                                | 18,605                 |   |      |   | 4,860      |   |  | 
|Cash Provided by Operating Activities                                                        |  |                                | 518,764                |   |      |   | 435,499    |   |  | 
|Investing Activities                                                                         |  |                                |                        |   |      |   |            |   |  | 
|Investments in unconsolidated affiliates                                                     |  |                                | (5,546                 | ) |      |   | (6,458     | ) |  | 
|Acquisitions                                                                                 |  |                                | -                      |   |      |   | (1,374,888 | ) |  | 
|Proceeds from sale of assets                                                                 |  |                                | 3,959                  |   |      |   | 297,595    |   |  | 
|Capital expenditures                                                                         |  |                                | (400,634               | ) |      |   | (114,788   | ) |  | 
|Increase in cash and cash equivalents attributable to previously unconsolidated subsidiaries |  |                                | -                      |   |      |   | 7,496      |   |  | 
|Decrease in cash and cash equivalents attributable to previously consolidated
subsidiaries   |  |                                | -                      |   |      |   | (22,039    | ) |  | 
|Cash Used in Investing Activities                                                            |  |                                | (402,221               | ) |      |   | (1,213,082 | ) |  | 
|Financing Activities                                                                         |  |                                |                        |   |      |   |            |   |  | 
|Cash distributions:                                                                          |  |                                |                        |   |      |   |            |   |  | 
|General and limited partners                                                                 |  |                                | (285,998               | ) |      |   | (173,462   | ) |  | 
|Minority interests                                                                           |  |                                | (147                   | ) |      |   | (343       | ) |  | 
|Cash flow retained by ONEOK (Note B)                                                         |  |                                | -                      |   |      |   | (177,486   | ) |  | 
|Short-term financing borrowings                                                              |  |                                | 1,100,000              |   |      |   | 1,530,000  |   |  | 
|Short-term financing payments                                                                |  |                                | (741,000               | ) |      |   | (1,732,000 | ) |  | 
|Issuance of long-term debt                                                                   |  |                                | 598,146                |   |      |   | 1,397,328  |   |  | 
|Payment of long-term debt                                                                    |  |                                | (8,948                 | ) |      |   | (37,995    | ) |  | 
|Other                                                                                        |  |                                | (5,280                 | ) |      |   | (15,655    | ) |  | 
|Cash Provided by Financing Activities                                                        |  |                                | 656,773                |   |      |   | 790,387    |   |  | 
|Change in Cash and Cash Equivalents                                                          |  |                                | 773,316                |   |      |   | 12,804     |   |  | 
|Cash and Cash Equivalents at Beginning of Period                                             |  |                                | 21,102                 |   |      |   | 43,090     |   |  | 
|Cash and Cash Equivalents at End of Period                                                   |  | $                              | 794,418                |   |      | $ | 55,894     |   |  | 
|                                                                                            
|Supplemental Cash Flow Information:                                                          |  |                                |                        |   |      |   |            |   |  | 
|Cash Paid for Interest                                                                       |  | $                              | 91,823                 |   |      | $ | 72,925     |   |  | 
|                                                                                            

See accompanying Notes to Consolidated Financial Statements.



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ONEOK Partners, L.P. and Subsidiaries

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY AND COMPREHENSIVE INCOME







|                                       |  |             |  |              |  |                        |  |                |         |   |             |   |          |   |  | 
|-------------------------------------- |  | ----------- |  | ------------ |  | ---------------------- |  | -------------- | ------- | - | ----------- | - | -------- | - |  | 
|(Unaudited)                            |  | CommonUnits |  | Class BUnits |  |                        |  | GeneralPartner |         |   | CommonUnits |   |          |  
|                                       |  | (Units)     |  |              |  | (Thousands of dollars) |  |                |        
|Partners equity at December 31, 2006  |  | 46,397,214  |  | 36,494,126   |  |                        |  | $              | 54,373  |   |             | $ | 803,599  |   |  | 
|Net income                             |  | -           |  | -            |  |                        |  |                | 42,203  |   |             |   | 136,625  |   |  | 
|Other comprehensive loss               |  | -           |  | -            |  |                        |  |                | -       |   |             |   | -        |   |  | 
|Total comprehensive income             |  |             |  |              |  |                        |  |                |         |   |             |   |          |   |  | 
|Other                                  |  | -           |  | -            |  |                        |  |                | (1      | ) |             |   | -        |   |  | 
|Distributions paid                     |  | -           |  | -            |  |                        |  |                | (39,810 | ) |             |   | (137,801 | ) |  | 
|Partners equity at September 30, 2007 |  | 46,397,214  |  | 36,494,126   |  |                        |  | $              | 56,765  |   |             | $ | 802,423  |   |  | 
|                                      

See accompanying Notes to Consolidated Financial Statements.



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ONEOK Partners, L.P. and Subsidiaries

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS EQUITY AND COMPREHENSIVE INCOME

(Continued)



|                                       |  |                        |           |   |                                            |   |        |                       |  |   |           |   |  | 
|-------------------------------------- |  | ---------------------- | --------- | - | ------------------------------------------ | - | ------ | --------------------- |  | - | --------- | - |  | 
|                                       |  | Class B Units          |           |   | AccumulatedOtherComprehensiveIncome (Loss) |   |        | Total PartnersEquity |  |   |          
|                                       |  | (Thousands of dollars) |           |   |                                           
|Partners equity at December 31, 2006  |  | $                      | 1,332,276 |   |                                            | $ | (1,586 | )                     |  | $ | 2,188,662 |   |  | 
|Net income                             |  |                        | 107,463   |   |                                            |   | -      |                       |  |   | 286,291   |   |  | 
|Other comprehensive loss               |  |                        | -         |   |                                            |   | (8,088 | )                     |  |   | (8,088    | ) |  | 
|                                       |  |                        |           |   |                                            |   |        |                       |  |   |           |   |  | 
|Total comprehensive income             |  |                        |           |   |                                            |   |        |                       |  |   | 278,203   |   |  | 
|                                       |  |                        |           |   |                                            |   |        |                       |  |   |           |   |  | 
|Other                                  |  |                        | (29       | ) |                                            |   | -      |                       |  |   | (30       | ) |  | 
|Distributions paid                     |  |                        | (108,387  | ) |                                            |   | -      |                       |  |   | (285,998  | ) |  | 
|Partners' equity at September 30, 2007 |  | $                      | 1,331,323 |   |                                            | $ | (9,674 | )                     |  | $ | 2,180,837 |   |  | 
|                                      



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ONEOK Partners, L.P. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|A. | SUMMARY OF ACCOUNTING POLICIES
|-- | ------------------------------

Our accompanying unaudited
consolidated financial statements have been prepared in accordance with GAAP and reflect all adjustments that, in our opinion, are necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a
normal recurring nature. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2006. Due to the seasonal
nature of our business, the results of operations for the three and nine months ended September 30, 2007, are not necessarily indicative of the results that may be expected for a 12-month period.

In July 2007, we announced a series of organizational changes that led to the realignment of our previous business segments. Our financial results are now reported in
these four segments: (i) Natural Gas Gathering and Processing, which remains unchanged; (ii) Natural Gas Pipelines, which is comprised of our former interstate natural gas pipelines segment and the natural gas operations of our former pipelines and
storage segment; (iii) Natural Gas Liquids Gathering and Fractionation, which remains unchanged; and (iv) Natural Gas Liquids Pipelines, which is comprised of the natural gas liquids assets of our former pipelines and storage segment. Prior periods
have been restated to reflect these segment changes.

Our accounting policies are consistent with those disclosed in Note A of the Notes to Consolidated
Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2006, except as described below.

Significant Accounting Policies

Short-Term Investments - Our short-term investments consist of auction-rate securities, which are corporate or municipal bonds that have
underlying long-term maturities. The interest rates are reset through auctions that are typically held every 7-35 days, at which time the securities can be sold. We invest in auction-rate securities for a portion of our cash management program.

Property - The following table sets forth our property, by segment, for the periods presented.



|                                                |  |                        |           |                  |   |          
|----------------------------------------------- |  | ---------------------- | --------- | ---------------- | - | ---------
|                                                |  | September 30,2007      |           | December 31,2006
|                                                |  | (Thousands of dollars)
|Non-Regulated                                   |  |                        |           |                  |   |          
|Natural Gas Gathering and Processing            |  | $                      | 1,206,913 |                  | $ | 1,133,614
|Natural Gas Pipelines                           |  |                        | 161,856   |                  |   | 162,636  
|Natural Gas Liquids Gathering and Fractionation |  |                        | 591,380   |                  |   | 547,495  
|Other                                           |  |                        | 50,404    |                  |   | 50,784   
|Regulated                                       |  |                        |           |                  |   |          
|Natural Gas Pipelines                           |  |                        | 1,134,077 |                  |   | 1,040,125
|Natural Gas Liquids Pipelines                   |  |                        | 696,597   |                  |   | 489,798  
|Property, plant and equipment                   |  |                        | 3,841,227 |                  |   | 3,424,452
|Accumulated depreciation and amortization       |  |                        | 741,878   |                  |   | 660,804  
|Net property, plant and equipment               |  | $                      | 3,099,349 |                  | $ | 2,763,648
|                                               

At September 30, 2007, we had construction work in process of $568.0 million that had not yet been put in service
and therefore was not being depreciated.

Income Taxes - In June 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income
TaxesAn Interpretation of FASB Statement No. 109, which was effective for our year beginning January 1, 2007. This interpretation was issued to clarify the accounting for uncertainty in income taxes recognized in the financial
statements by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 requires the recognition of penalties and
interest on any unrecognized tax benefits. Our policy is to reflect penalties and interest as part of income tax expense as they become applicable. We have no tax positions that would require establishment of a reserve under FIN 48.



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We file numerous consolidated and separate income tax returns in the United States federal jurisdiction and in many state
jurisdictions. We also file returns in Canada. No returns are currently under audit, and no extensions of statute of limitations have been requested or granted.

Other

Fair Value Measurements - In September 2006, the FASB issued Statement 157, Fair Value Measurements, which
establishes a framework for measuring fair value and requires additional disclosures about fair value measurements. Statement 157 is effective for our year beginning January 1, 2008. We are currently reviewing the applicability of Statement 157
to our operations and its potential impact on our consolidated financial statements.

In February 2007, the FASB issued Statement 159, The Fair Value
Option for Financial Assets and Financial Liabilities, which allows companies to elect to measure specified financial assets and liabilities, firm commitments, and nonfinancial warranty and insurance contracts at fair value on a
contract-by-contract basis, with changes in fair value recognized in earnings each reporting period. Statement 159 is effective for our year beginning January 1, 2008. We are currently reviewing the applicability of Statement 159 to our
operations and its potential impact on our consolidated financial statements.

Net Income Per Unit - The FASB Emerging Issues Task Force issued a
draft abstract of EITF 07-4, Application of the Two-Class Method under FASB Statement No. 128 to Master Limited Partnerships. If finalized in its current form, EITF 07-4 would result in the allocation of undistributed
current-period earnings to the unitholders using the two-class method in periods in which earnings exceed distributions. If distributions to participating securities exceed current-period earnings, the excess distributions would generate an
undistributed loss that would be allocated back to the equity interests based on their obligations to participate in losses. Many participating securities, such as incentive distribution rights, that are not common securities would not contain
an obligation to share in losses and would not be allocated any portion of the losses. The proposed effective date for EITF 07-4 is currently for our year beginning January 1, 2008. If approved in the present form, we do not expect it
to have a material impact on our consolidated financial statements or net income per unit computations.

Reclassifications - Certain amounts in our
consolidated financial statements have been reclassified to conform to the 2007 presentation. These reclassifications did not impact previously reported net income or partners equity.



|B. | ACQUISITIONS AND DIVESTITURES
|-- | -----------------------------

Acquisition of NGL Pipeline -
In October 2007, we completed the acquisition of an interstate natural gas liquids and refined petroleum products pipeline system and related assets from a subsidiary of Kinder Morgan Energy Partners, L.P. (Kinder Morgan) for approximately $300
million. The system extends from Bushton and Conway, Kansas, to Chicago, Illinois, and transports, stores and delivers a full range of NGL and refined products. The FERC-regulated system spans 1,585 miles and has a capacity to transport up to 134
MBbl/d. The transaction includes approximately 978 MBbl of owned storage capacity, eight NGL terminals and a 50 percent ownership of the Heartland Pipeline Company (Heartland). ConocoPhillips owns the other 50 percent of Heartland and is the
managing partner of the Heartland joint venture, which consists primarily of three refined products terminals and connecting pipelines. Financing for this transaction came from the proceeds of our September 2007 issuance of $600 million 6.85 percent
Senior Notes due 2037 (2037 Notes). See Note F for a discussion of the 2037 Notes.

Overland Pass Pipeline Company - In May 2006, we entered into an
agreement with a subsidiary of The Williams Companies, Inc. (Williams) to form a joint venture called Overland Pass Pipeline Company. Overland Pass Pipeline Company will build a 760-mile natural gas liquids pipeline from Opal, Wyoming, to the
Mid-Continent natural gas liquids market center in Conway, Kansas. The pipeline will be initially designed to transport approximately 110 MBbl/d of NGLs, which can be increased to approximately 150 MBbl/d with additional pump facilities. During
2006, we paid $11.6 million to Williams for the acquisition of our interest in the joint venture and for reimbursement of initial capital expenditures. As the 99 percent owner of the joint venture, we will manage the construction project, advance
all costs associated with construction and operate the pipeline. Within two years of the pipeline becoming operational, Williams will have the option to increase its ownership up to 50 percent by reimbursing us for its proportionate share of all
construction costs. If Williams exercises its option to increase its ownership to the full 50 percent, Williams would have the option to become operator. This project has received the required approvals of various state and federal regulatory
authorities and construction of the pipeline has begun, with start up scheduled for early 2008.

As part of a long-term agreement, Williams dedicated its
NGL production from two of its natural gas processing plants in Wyoming to the joint-venture company. We will provide downstream fractionation, storage and transportation services to Williams. The pipeline project is currently estimated to cost
approximately $535 million, excluding AFUDC. In addition,



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we currently expect to invest approximately $216 million, excluding AFUDC, to expand our existing fractionation capabilities and the capacity of our natural
gas liquids distribution pipelines. Financing for the projects may include a combination of short- or long-term debt or equity.

The ONEOK
Transactions - In April 2006, we completed the acquisition and consolidated certain companies comprising ONEOKs former gathering and processing, natural gas liquids, and pipelines and storage segments (collectively, the ONEOK Energy
Assets) in a series of transactions, (collectively the ONEOK Transactions). As part of the ONEOK Transactions, ONEOK acquired ONEOK NB, formerly known as Northwest Border Pipeline Company, an affiliate of TransCanada that held a 0.35 percent general
partner interest in us, under a Purchase and Sale Agreement between an affiliate of ONEOK and an affiliate of TransCanada. As a result, ONEOK owns our entire 2 percent general partner interest and controls us.

We acquired the ONEOK Energy Assets for approximately $3 billion, including $1.35 billion in cash, before adjustments, and approximately 36.5 million Class B
limited partner units. The Class B limited partner units and the related general partner interest contribution were valued at approximately $1.65 billion. ONEOK now owns approximately 37.0 million of our limited partner units, which, when
combined with its general partner interest, increased its total interest in us to approximately 45.7 percent. We used $1.05 billion drawn under our $1.1 billion, 364-day credit agreement (the Bridge Facility), coupled with the proceeds from the sale
of a 20 percent partnership interest in Northern Border Pipeline, to finance the cash portion of the transaction.

The ONEOK Transactions were accounted
for as a transaction between entities under common control and these transactions were excluded from the accounting prescribed by Statement 141, Business Combinations. Accordingly, ONEOKs historical cost basis in the ONEOK Energy
Assets was transferred to us in a manner similar to a pooling of interests. The difference between the historical cost basis of the net assets acquired of $2.7 billion and the cash paid was assigned to the value of the Class B limited partner units
issued to ONEOK and its general partner interest in us. These assets and their related operations are included in our consolidated financial statements retroactive to January 1, 2006. Since the ONEOK Transactions were not completed until April
2006, the income and cash flow from the ONEOK Energy Assets for the first quarter of 2006 were retained by ONEOK. In our Consolidated Statements of Cash Flows, we reported cash flow retained by ONEOK of $177.5 million, which represents the cash
flows generated from these companies while they were owned by ONEOK.

Prior to the acquisition, the ONEOK Energy Assets were included in the consolidated
state and federal income tax returns of ONEOK and, accordingly, current taxes payable were allocated to the ONEOK Energy Assets based on ONEOKs effective tax rate. Income tax liabilities and provisions for income tax expense for the ONEOK
Energy Assets were calculated on a stand-alone basis. Our Consolidated Statements of Income for the nine months ended September 30, 2006, includes income tax expense recorded for the ONEOK Energy Assets of $22.2 million for the first quarter of
2006. In conjunction with the ONEOK Transactions, all income tax liabilities of the ONEOK Energy Assets at the time of the ONEOK Transactions were retained by ONEOK.

Income from the ONEOK Energy Assets for the first quarter of 2006 also reflects interest expense of $21.3 million, which represents interest charged on long-term debt owed to ONEOK. The interest rate on the debt was
calculated periodically based upon ONEOKs weighted-average cost of debt. This debt was retained by ONEOK as part of the ONEOK Transactions.

The
units issued to ONEOK were the newly created Class B limited partner units. As of April 7, 2007, the Class B limited partner units are no longer subordinated to distributions on our common units and generally have the same voting rights as our
common units.

At a special meeting of the holders of our common units held March 29, 2007, the unitholders approved a proposal to permit the
conversion of all or a portion of the Class B limited partner units issued in the ONEOK Transactions into common units at the option of the Class B unitholder. The March 29, 2007, special meeting was adjourned to May 10, 2007, to allow
unitholders additional time to vote on a proposal to approve amendments to our Partnership Agreement which, had the amendments been approved, would have granted voting rights for units held by our general partner and its affiliates if a vote was
held to remove our general partner and would have required fair market value compensation for the general partner interest if the general partner was removed. While a majority of our common unitholders voted in favor of the proposed amendments to
our Partnership Agreement at the reconvened meeting of our common unitholders held May 10, 2007, the proposed amendments were not approved by the required two-thirds affirmative vote of our outstanding units, excluding the common units and
Class B limited partner units held by ONEOK and its affiliates. As a result, effective April 7, 2007, the Class B limited partner units are entitled to receive increased quarterly distributions equal to 110 percent of the distributions paid
with respect to our common units.



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On June 21, 2007, ONEOK, as the sole holder of our Class B limited partner units, waived its right to receive the
increased quarterly distributions on the Class B units for the period of April 7, 2007, through December 31, 2007, and continuing thereafter until ONEOK gives us no less than 90 days advance notice that it has withdrawn its waiver. Any
such withdrawal of the waiver will be effective with respect to any distribution on the Class B units declared or paid on or after the 90 days following delivery of the notice.

In addition, since the proposed amendments to our Partnership Agreement were not approved by our common unitholders, if our common unitholders vote at any time to remove ONEOK or its affiliates as our general partner,
quarterly distributions payable on the Class B limited partner units would increase to 123.5 percent of the distributions payable with respect to the common units, and distributions payable upon liquidation of the Class B limited partner units would
increase to 125 percent of the distributions payable with respect to the common units.

Disposition of 20 Percent Partnership Interest in Northern
Border Pipeline - In April 2006, we completed the sale of a 20 percent partnership interest in Northern Border Pipeline to TC PipeLines for approximately $297 million to help finance the acquisition of the ONEOK Energy Assets. We recorded a gain
on the sale of approximately $113.9 million in the second quarter of 2006. We and TC PipeLines each now own a 50 percent interest in Northern Border Pipeline, and an affiliate of TransCanada became the operator of the pipeline in April 2007. Under
Statement 94, Consolidation of All Majority Owned Subsidiaries, a majority-owned subsidiary is not consolidated if control is likely to be temporary or if it does not rest with the majority owner. Neither we nor TC PipeLines has control
of Northern Border Pipeline, as control is shared equally through Northern Border Pipelines Management Committee. Our interest in Northern Border Pipeline has been accounted for as an investment under the equity method applied on a retroactive
basis to January 1, 2006.

Acquisition of Guardian Pipeline Interests - In April 2006, we acquired the 66-2/3 percent interest in Guardian
Pipeline not previously owned by us for approximately $77 million, increasing our ownership to 100 percent. We used borrowings from our credit facility to fund the acquisition of the additional interest in Guardian Pipeline. Following the completion
of the transaction, we consolidated Guardian Pipeline in our consolidated financial statements. This change was accounted for on a retroactive basis to January 1, 2006.



|C. | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
|-- | ---------------------------------------------

We utilize financial
instruments to reduce our market risk exposure to interest rate and commodity price fluctuations, and to achieve more predictable cash flows. We follow established policies and procedures to assess risk and approve, monitor and report our financial
instrument activities. We do not use these instruments for trading purposes.

Cash Flow Hedges - Our Natural Gas Gathering and Processing segment
periodically enters into commodity derivative contracts and fixed-price physical contracts. Our Natural Gas Gathering and Processing segment primarily utilizes NYMEX-based futures, collars and over-the-counter swaps, which are designated as cash
flow hedges, to hedge our exposure to volatility in the price of natural gas, NGLs and condensate and the gross processing spread. At September 30, 2007, the accompanying Consolidated Balance Sheet reflected an unrealized loss of $9.3 million
in accumulated other comprehensive loss, with a corresponding offset in derivative financial instrument assets and liabilities, all of which will be recognized over the next six months. Net gains and losses related to the ineffective portion of our
hedges are reclassified out of accumulated other comprehensive income (loss) to operating revenues in the period the ineffectiveness occurs. Ineffectiveness related to these cash flow hedges was not material for the three and nine months ended
September 30, 2007. Ineffectiveness related to these cash flow hedges resulted in a loss of approximately $0.7 and a gain of approximately $3.1 million for the three and nine months ended September 30, 2006, respectively. There were no
gains or losses during the three and nine months ended September 30, 2007 and 2006, due to the discontinuance of cash flow hedge treatment.

Fair
Value Hedges - In prior years, we terminated various interest-rate swap agreements. The net savings from the termination of these swaps is being recognized in interest expense over the terms of the debt instruments originally hedged. Net
interest expense savings for the nine months ended September 30, 2007, for all terminated swaps were $2.7 million, and the remaining net savings for all terminated swaps will be recognized over the following periods.



|                  |  |                       |     |  | 
|----------------- |  | --------------------- | --- |  | 
|                  |  | (Millions of dollars) |     | 
|Remainder of 2007 |  | $                     | 0.9 |  | 
|2008              |  |                       | 3.7 |  | 
|2009              |  |                       | 3.7 |  | 
|2010              |  |                       | 3.7 |  | 
|2011              |  |                       | 0.9 |  | 
|Thereafter        |  |                       | -   |  | 



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At September 30, 2007, the interest on $150 million of fixed-rate debt was swapped to floating using interest-rate
swaps. The floating rate was based on six-month LIBOR. Based on the actual performance through September 30, 2007, the weighted average interest rate on the swapped debt increased from 7.10 percent to 7.73 percent. At September 30, 2007,
we recorded a net liability of $1.2 million to recognize the interest-rate swaps at fair value. Long-term debt was decreased by $1.2 million to recognize the change in the fair value of the related hedged liability.



|D. | GOODWILL AND INTANGIBLE ASSETS
|-- | ------------------------------

Goodwill

Carrying Amounts - The amount of goodwill recorded on our Consolidated Balance Sheets as of September 30, 2007, and December 31, 2006, was $394.6
million.

Equity Method Goodwill - For the investments we account for under the equity method, the premium or excess cost over the underlying fair
value of net assets is referred to as equity method goodwill. Investment in unconsolidated affiliates on our accompanying Consolidated Balance Sheets includes equity method goodwill of $185.6 million as of September 30, 2007, and
December 31, 2006.

Impairment Test - We performed our annual goodwill impairment test as of July 1, 2007, and there was no impairment
indicated.

Intangible Assets

Our intangible assets
primarily relate to contracts acquired through the acquisition of the natural gas liquids businesses from ONEOK and are being amortized over an aggregate weighted-average period of 40 years. The aggregate amortization expense for each of the next
five years is estimated to be approximately $7.7 million. Amortization expense for intangible assets for the three and nine months ended September 30, 2007, was $1.9 million and $5.8 million, respectively.

The following tables reflect the gross carrying amount and accumulated amortization of intangible assets for the periods presented.



|                                                |  |                         |         |                         |   |         |                       |  |   |         |  | 
|----------------------------------------------- |  | ----------------------- | ------- | ----------------------- | - | ------- | --------------------- |  | - | ------- |  | 
|                                                |  | September 30, 2007     
|                                                |  | GrossIntangible Assets  |         | AccumulatedAmortization |   |         | NetIntangible Assets  |  |  
|                                                |  | (Thousands of dollars)  |         |                        
|Natural Gas Liquids Gathering and Fractionation |  | $                       | 292,000 |                         | $ | (16,424 | )                     |  | $ | 275,576 |  | 
|Natural Gas Liquids Pipelines                   |  |                         | 14,650  |                         |   | (825    | )                     |  |   | 13,825  |  | 
|Intangible Assets                               |  | $                       | 306,650 |                         | $ | (17,249 | )                     |  | $ | 289,401 |  | 
|                                               
|                                                | 
|                                                |  | December 31, 2006      
|                                                |  | Gross Intangible Assets |         | AccumulatedAmortization |   |         | Net Intangible Assets |  |  
|                                                |  | (Thousands of dollars)  |         |                        
|Natural Gas Liquids Gathering and Fractionation |  | $                       | 292,000 |                         | $ | (10,949 | )                     |  | $ | 281,051 |  | 
|Natural Gas Liquids Pipelines                   |  |                         | 14,650  |                         |   | (550    | )                     |  |   | 14,100  |  | 
|Intangible Assets                               |  | $                       | 306,650 |                         | $ | (11,499 | )                     |  | $ | 295,151 |  | 
|                                               



|E. | CREDIT FACILITIES
|-- | -----------------

General - On March 30, 2007, we
amended and restated our five-year revolving credit facility agreement (2007 Partnership Credit Agreement), with several banks and other financial institutions and lenders in the following principal ways: (i) revised the pricing,
(ii) extended the maturity by one year to March 2012, (iii) eliminated the interest coverage ratio covenant, (iv) increased the permitted ratio of indebtedness to EBITDA to 5 to 1 (from 4.75 to 1), (v) increased the swingline
sub-facility commitments from $15 million to $50 million and (vi) changed the permitted amount of subsidiary indebtedness from $35 million to 10 percent of our consolidated indebtedness. The interest rates applicable to extensions of credit
under this agreement are based, at our election, on either (i) the higher of prime or one-half of one percent above the Federal Funds Rate, which is the rate that banks charge each other for the overnight borrowing of funds, or (ii) the
Eurodollar rate plus a set number of basis points, depending on our current long-term unsecured debt ratings.



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In July 2007, we exercised the accordion feature of our 2007 Partnership Credit Agreement to increase the commitment
amounts by $250 million to a total of $1.0 billion.

Except as discussed above, our 2007 Partnership Credit Agreement and Guardian Pipelines
revolving note agreement contain typical covenants as discussed in Note E of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2006. At September 30, 2007, we were in
compliance with all covenants.

At September 30, 2007, we had no letters of credit issued and $365 million in borrowings outstanding under our 2007
Partnership Credit Agreement at a weighted average interest rate of 6.02 percent, which was repaid in October 2007. At September 30, 2007, Guardian Pipeline had no borrowings outstanding under its $10 million revolving note agreement, which
terminates in November 2007.



|F. | LONG-TERM DEBT
|-- | --------------

Debt Issuance - In September 2007, we
completed an underwritten public offering of $600 million aggregate principal amount of 6.85 percent Senior Notes due 2037 (2037 Notes). The 2037 Notes were issued under our existing shelf registration statement filed with the SEC.

We may redeem the 2037 Notes, in whole or in part, at any time prior to their maturity at a redemption price equal to the principal amount of the 2037 Notes, plus
accrued and unpaid interest and a make-whole premium. The redemption price will never be less than 100 percent of the principal amount of the 2037 Notes plus accrued and unpaid interest. The 2037 Notes are senior unsecured obligations, ranking
equally in right of payment with all of our existing and future unsecured senior indebtedness, and effectively junior to all of the existing debt and other liabilities of our non-guarantor subsidiaries. The 2037 Notes are non-recourse to our general
partner.

The net proceeds from the 2037 Notes, after deducting underwriting discounts and commissions and expenses, of $592.9 million were used to finance
our $300 million acquisition of an interstate natural gas liquids and refined petroleum products pipeline system and related assets from a subsidiary of Kinder Morgan and to repay debt outstanding under the 2007 Partnership Credit Agreement.

The 2037 Notes are fully and unconditionally guaranteed on a senior unsecured basis by ONEOK Partners Intermediate Limited Partnership (Intermediate
Partnership). The guarantee ranks equally in right of payment to all of the Intermediate Partnerships existing and future unsecured senior indebtedness. We have no significant assets or operations other than our investment in our wholly-owned
subsidiary, the Intermediate Partnership, which is also consolidated. The Intermediate Partnership holds a 50 percent interest in Northern Border Pipeline at September 30, 2007, which is accounted for under the equity method.

The Northern Border Pipeline partnership agreement provides that distributions to Northern Border Pipelines partners are to be made on a pro rata basis according
to each partners capital account balance. The Northern Border Pipeline Management Committee determines the amount and timing of such distributions. Any changes to, or suspension of, the cash distribution policy of Northern Border Pipeline
requires the unanimous approval of the Northern Border Pipeline Management Committee. Cash distributions are equal to 100 percent of distributable cash flow as determined from Northern Border Pipelines financial statements based upon earnings
before interest, taxes, depreciation and amortization less interest expense and maintenance capital expenditures. Loans or other advances from Northern Border Pipeline to its partners or affiliates are prohibited under its credit agreement. At
September 30, 2007, and December 31, 2006, our equity in the net assets of Northern Border Pipeline was approximately $427 million and $438 million, respectively.

The terms of the 2037 Notes are governed by the Indenture, dated as of September 25, 2006, between ONEOK Partners and Wells Fargo Bank, N.A., as trustee, as supplemented by the Fourth Supplemental Indenture,
dated September 28, 2007 (Indenture). The Indenture does not limit the aggregate principal amount of debt securities that may be issued and provides that debt securities may be issued from time to time in one or more additional series. The
Indenture contains covenants including, among other provisions, limitations on our ability to place liens on our property or assets and sell and lease back our property.

The 2037 Notes will mature on October 15, 2037. We will pay interest on the 2037 Notes on April 15 and October 15 of each year. The first payment of interest on the 2037 Notes will be made on
April 15, 2008. Interest on the 2037 Notes accrues from September 28, 2007, which was the issuance date of the 2037 Notes.



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|G. | SEGMENTS
|-- | --------

Segment Descriptions - In July 2007, we announced
a series of organizational changes that led to the realignment of our previous business segments. Our financial results are now reported in these four segments: (i) Natural Gas Gathering and Processing, which remains unchanged;
(ii) Natural Gas Pipelines, which is comprised of our former interstate natural gas pipelines segment and the natural gas operations of our former pipelines and storage segment; (iii) Natural Gas Liquids Gathering and Fractionation, which
remains unchanged; and (iv) Natural Gas Liquids Pipelines, which is comprised of the natural gas liquids assets of our former pipelines and storage segment. Prior periods have been restated to reflect these segment changes.

Our operations are divided into these strategic business segments based on similarities in economic characteristics, products and services, types of customers, methods
of distribution and regulatory environment, as follows:



| |  |  | our Natural Gas Gathering and Processing segment primarily gathers and processes raw natural gas;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | our Natural Gas Pipelines segment primarily operates regulated interstate and intrastate natural gas transmission pipelines and natural gas storage facilities;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our Natural Gas Liquids Gathering and Fractionation segment primarily gathers, treats and fractionates raw NGLs and stores and markets purity NGL products; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our Natural Gas Liquids Pipelines segment primarily operates our FERC-regulated interstate natural gas liquids gathering and distribution pipelines.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

Accounting Policies - The accounting policies of the segments are the same as those described in Note A and Note M of the Notes
to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2006. Intersegment and affiliate sales are recorded on the same basis as sales to unaffiliated customers. Our Natural Gas Gathering and
Processing segment sells natural gas to ONEOK and its subsidiaries. A portion of our Natural Gas Pipelines segments revenues are from ONEOK and its subsidiaries, which utilize both transportation and storage services. Corporate overhead costs
relating to a reportable segment have been allocated for the purpose of calculating operating income. Our equity method investments do not represent operating segments.

Customers - We had no single external customer from which we received 10 percent or more of our consolidated gross revenues.

Operating Segment Information - The following tables set forth certain operating segment financial data for the periods indicated. Amounts in prior periods have been restated to conform to our current presentation.



|                                     |  |                                    |         |                          |   |                                              |  |                                 |           |  |                       |         |   |       |   |           |   |  |   |           |  | 
|------------------------------------ |  | ---------------------------------- | ------- | ------------------------ | - | -------------------------------------------- |  | ------------------------------- | --------- |  | --------------------- | ------- | - | ----- | - | --------- | - |  | - | --------- |  | 
|Three Months EndedSeptember 30, 2007 |  | Natural GasGathering andProcessing |         | Natural GasPipelines (a) |   | Natural GasLiquidsGathering andFractionation |  | Natural GasLiquidsPipelines (b) |           |  | Other andEliminations |         |   | Total |   |          
|                                     |  | (Thousands of dollars)             |         |                         
|Sales to unaffiliated customers      |  | $                                  | 81,660  |                          | $ | 44,550                                       |  | $                               | 1,113,467 |  | $                     | -       |   |       | $ | 4         |   |  | $ | 1,239,681 |  | 
|Sales to affiliated customers        |  |                                    | 141,907 |                          |   | 28,669                                       |  |                                 | -         |  |                       | -       |   |       |   | -         |   |  |   | 170,576   |  | 
|Intersegment sales                   |  |                                    | 125,384 |                          |   | 145                                          |  |                                 | 6,630     |  |                       | 19,672  |   |       |   | (151,831  | ) |  |   | -         |  | 
|Operating revenue                    |  | $                                  | 348,951 |                          | $ | 73,364                                       |  | $                               | 1,120,097 |  | $                     | 19,672  |   |       | $ | (151,827) |   |  | $ | 1,410,257 |  | 
|Gain on sale of assets               |  | $                                  | 10      |                          | $ | 73                                           |  | $                               | 27        |  | $                     | 1       |   |       | $ | -         |   |  | $ | 111       |  | 
|Operating income                     |  | $                                  | 44,550  |                          | $ | 28,122                                       |  | $                               | 24,628    |  | $                     | 9,347   |   |       | $ | (1,531    | ) |  | $ | 105,116   |  | 
|Equity earnings from investments     |  | $                                  | 6,180   |                          | $ | 16,493                                       |  | $                               | -         |  | $                     | (511    | ) |       | $ | -         |   |  | $ | 22,162    |  | 
|EBITDA                               |  | $                                  | 61,641  |                          | $ | 52,506                                       |  | $                               | 30,763    |  | $                     | 11,543  |   |       | $ | 404       |   |  | $ | 156,857   |  | 
|Capital expenditures                 |  | $                                  | 32,026  |                          | $ | 43,708                                       |  | $                               | 20,378    |  | $                     | 102,057 |   |       | $ | 21        |   |  | $ | 198,190   |  | 

|    |  |   |  |                                                                                                                                                                                                                                                          
|--- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | - |  | Our Natural Gas Pipelines segment has regulated and non-regulated operations. Our Natural Gas Pipelines segment's regulated operations had revenues of $61.2 million and operating income of
$20.6 million for the three months ended September 30, 2007.
|(b) |  | - |  | All of our Natural Gas Liquids Pipelines segments operations are regulated.                                                                                                                                                                             



16



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##### Table of Contents

|                                      |  |                                    |         |                          |   |                                              |  |                                 |         |                       |   |        |       |   |           |   |  |   |           |  | 
|------------------------------------- |  | ---------------------------------- | ------- | ------------------------ | - | -------------------------------------------- |  | ------------------------------- | ------- | --------------------- | - | ------ | ----- | - | --------- | - |  | - | --------- |  | 
|Three Months Ended September 30, 2006 |  | Natural GasGathering andProcessing |         | Natural GasPipelines (a) |   | Natural GasLiquidsGathering andFractionation |  | Natural GasLiquidsPipelines (b) |         | Other andEliminations |   |        | Total |   |          
|                                      |  | (Thousands of dollars)             |         |                         
|Sales to unaffiliated customers       |  | $                                  | 80,718  |                          | $ | 47,970                                       |  | $                               | 910,665 |                       | $ | -      |       | $ | 70        |   |  | $ | 1,039,423 |  | 
|Sales to affiliated customers         |  |                                    | 140,270 |                          |   | 38,848                                       |  |                                 | -       |                       |   | -      |       |   | -         |   |  |   | 179,118   |  | 
|Intersegment sales                    |  |                                    | 157,933 |                          |   | 129                                          |  |                                 | 6,995   |                       |   | 16,606 |       |   | (181,663  | ) |  |   | -         |  | 
|Operating revenue                     |  | $                                  | 378,921 |                          | $ | 86,947                                       |  | $                               | 917,660 |                       | $ | 16,606 |       | $ | (181,593) |   |  | $ | 1,218,541 |  | 
|Gain on sale of assets                |  | $                                  | 7       |                          | $ | -                                            |  | $                               | 27      |                       | $ | 2      |       | $ | -         |   |  | $ | 36        |  | 
|Operating income                      |  | $                                  | 56,218  |                          | $ | 30,140                                       |  | $                               | 18,275  |                       | $ | 7,370  |       | $ | (4,330    | ) |  | $ | 107,673   |  | 
|Equity earnings from investments      |  | $                                  | 5,741   |                          | $ | 16,943                                       |  | $                               | -       |                       | $ | 104    |       | $ | -         |   |  | $ | 22,788    |  | 
|EBITDA                                |  | $                                  | 72,609  |                          | $ | 55,340                                       |  | $                               | 23,689  |                       | $ | 10,342 |       | $ | (3,366    | ) |  | $ | 158,614   |  | 
|Capital expenditures                  |  | $                                  | 13,898  |                          | $ | 18,946                                       |  | $                               | 6,485   |                       | $ | 21,698 |       | $ | 186       |   |  | $ | 61,213    |  | 



|    |  |   |  |                                                                                                                                                                                                                                                          
|--- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | - |  | Our Natural Gas Pipelines segment has regulated and non-regulated operations. Our Natural Gas Pipelines segments regulated operations had revenues of $75.6 million and operating income
of $24.0 million for the three months ended September 30, 2006.
|(b) |  | - |  | All of our Natural Gas Liquids Pipelines segment's operations are regulated.                                                                                                                                                                             



|                                        |  |                                    |           |                          |   |                                              |  |                                 |           |                       |   |         |       |   |          |   |  |   |           |  | 
|--------------------------------------- |  | ---------------------------------- | --------- | ------------------------ | - | -------------------------------------------- |  | ------------------------------- | --------- | --------------------- | - | ------- | ----- | - | -------- | - |  | - | --------- |  | 
|                                        |  |                                    |           |                          |   |                                              | 
|Nine Months EndedSeptember 30, 2007     |  | Natural GasGathering andProcessing |           | Natural GasPipelines (a) |   | Natural GasLiquidsGathering andFractionation |  | Natural GasLiquidsPipelines (b) |           | Other andEliminations |   |         | Total |   |         
|                                        |  | (Thousands of dollars)             |           |                         
|Sales to unaffiliated customers         |  | $                                  | 292,867   |                          | $ | 140,394                                      |  | $                               | 3,029,248 |                       | $ | -       |       | $ | 30       |   |  | $ | 3,462,539 |  | 
|Sales to affiliated customers           |  |                                    | 413,027   |                          |   | 78,679                                       |  |                                 | -         |                       |   | -       |       |   | -        |   |  |   | 491,706   |  | 
|Intersegment sales                      |  |                                    | 328,695   |                          |   | 652                                          |  |                                 | 19,416    |                       |   | 56,194  |       |   | (404,957 | ) |  |   | -         |  | 
|Operating revenue                       |  | $                                  | 1,034,589 |                          | $ | 219,725                                      |  | $                               | 3,048,664 |                       | $ | 56,194  |       | $ | (404,927 | ) |  | $ | 3,954,245 |  | 
|Gain on sale of assets                  |  | $                                  | 1,823     |                          | $ | 79                                           |  | $                               | 31        |                       | $ | 2       |       | $ | -        |   |  | $ | 1,935     |  | 
|Operating income                        |  | $                                  | 121,276   |                          | $ | 85,560                                       |  | $                               | 88,414    |                       | $ | 26,394  |       | $ | (4,594   | ) |  | $ | 317,050   |  | 
|Equity earnings from investments        |  | $                                  | 19,518    |                          | $ | 45,275                                       |  | $                               | -         |                       | $ | 182     |       | $ | -        |   |  | $ | 64,975    |  | 
|EBITDA                                  |  | $                                  | 174,175   |                          | $ | 155,111                                      |  | $                               | 105,368   |                       | $ | 35,413  |       | $ | 518      |   |  | $ | 470,585   |  | 
|Investment in unconsolidated affiliates |  | $                                  | 297,581   |                          | $ | 434,827                                      |  | $                               | -         |                       | $ | 8,902   |       | $ | -        |   |  | $ | 741,310   |  | 
|Total assets                            |  | $                                  | 1,741,024 |                          | $ | 1,331,096                                    |  | $                               | 1,757,658 |                       | $ | 692,336 |       | $ | 542,806  |   |  | $ | 6,064,920 |  | 
|Capital expenditures                    |  | $                                  | 70,859    |                          | $ | 88,861                                       |  | $                               | 42,912    |                       | $ | 197,975 |       | $ | 27       |   |  | $ | 400,634   |  | 



|    |  |   |  |                                                                                                                                                                                                                                                          
|--- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | - |  | Our Natural Gas Pipelines segment has regulated and non-regulated operations. Our Natural Gas Pipelines segments regulated operations had revenues of $182.7 million and operating income
of $63.1 million for the nine months ended September 30, 2007.
|(b) |  | - |  | All of our Natural Gas Liquids Pipelines segments operations are regulated.                                                                                                                                                                             





|                                        |  |                                    |           |                          |   |                                              |  |   |                                 |   |                       |   |         |       |   |          |   |  |   |           |  | 
|--------------------------------------- |  | ---------------------------------- | --------- | ------------------------ | - | -------------------------------------------- |  | - | ------------------------------- | - | --------------------- | - | ------- | ----- | - | -------- | - |  | - | --------- |  | 
|Nine Months Ended September 30, 2006    |  | Natural GasGathering andProcessing |           | Natural GasPipelines (a) |   | Natural GasLiquidsGathering andFractionation |  |   | Natural GasLiquidsPipelines (b) |   | Other andEliminations |   |         | Total |   |         
|                                        |  | (Thousands of dollars)             |           |                         
|Sales to unaffiliated customers         |  | $                                  | 380,642   |                          | $ | 147,096                                      |  | $ | 2,596,670                       |   |                       | $ | -       |       | $ | 1,570    |   |  | $ | 3,125,978 |  | 
|Sales to affiliated customers           |  |                                    | 345,758   |                          |   | 92,024                                       |  |   | (1,747                          | ) |                       |   | -       |       |   | -        |   |  |   | 436,035   |  | 
|Intersegment sales                      |  |                                    | 401,136   |                          |   | 627                                          |  |   | 23,685                          |   |                       |   | 49,064  |       |   | (474,512 | ) |  |   | -         |  | 
|Operating revenue                       |  | $                                  | 1,127,536 |                          | $ | 239,747                                      |  | $ | 2,618,608                       |   |                       | $ | 49,064  |       | $ | (472,942 | ) |  | $ | 3,562,013 |  | 
|Gain on sale of assets                  |  | $                                  | 372       |                          | $ | 114,867                                      |  | $ | 38                              |   |                       | $ | 6       |       | $ | 119      |   |  | $ | 115,402   |  | 
|Operating income                        |  | $                                  | 149,408   |                          | $ | 208,477                                      |  | $ | 64,656                          |   |                       | $ | 20,931  |       | $ | (22,846  | ) |  | $ | 420,626   |  | 
|Equity earnings from investments        |  | $                                  | 16,440    |                          | $ | 56,062                                       |  | $ | -                               |   |                       | $ | 248     |       | $ | -        |   |  | $ | 72,750    |  | 
|EBITDA                                  |  | $                                  | 200,132   |                          | $ | 289,441                                      |  | $ | 80,885                          |   |                       | $ | 30,307  |       | $ | (14,157  | ) |  | $ | 586,608   |  | 
|Investment in unconsolidated affiliates |  | $                                  | 293,337   |                          | $ | 453,058                                      |  | $ | -                               |   |                       | $ | 9,348   |       | $ | -        |   |  | $ | 755,743   |  | 
|Total assets                            |  | $                                  | 1,541,325 |                          | $ | 1,219,076                                    |  | $ | 1,474,397                       |   |                       | $ | 490,160 |       | $ | 175,864  |   |  | $ | 4,900,822 |  | 
|Capital expenditures                    |  | $                                  | 36,296    |                          | $ | 30,576                                       |  | $ | 14,462                          |   |                       | $ | 32,462  |       | $ | 992      |   |  | $ | 114,788   |  | 

|    |  |   |  |                                                                                                                                                                                                                                                           
|--- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | - |  | Our Natural Gas Pipelines segment has regulated and non-regulated operations. Our Natural Gas Pipelines segment's regulated operations had revenues of $204.1 million and operating income of
$188.5 million for the nine months ended September 30, 2006.
|(b) |  | - |  | All of our Natural Gas Liquids Pipelines segments operations are regulated.                                                                                                                                                                              



17



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##### Table of Contents

We evaluate our performance based on EBITDA, which we define as earnings before interest, income taxes, depreciation and
amortization less the cost of the equity component of AFUDC (Equity AFUDC). Management uses EBITDA to compare the financial performance of its segments and to internally manage those business segments. Management believes that EBITDA provides useful
information to investors as a measure of comparison with peer companies. EBITDA should not be considered an alternative to, or more meaningful than, net income or cash flow as determined in accordance with GAAP. EBITDA calculations may vary from
company to company, so our computation of EBITDA may not be comparable with a similarly titled measure of another company.

The following tables set forth
the reconciliation of net income to EBITDA by operating segment for the periods indicated.



|                                     |  |                                    |        |   |                      |   |        |                                               |  |   |                              |   |  |                       |        |       |  |   |          |  |   |         |   |  | 
|------------------------------------ |  | ---------------------------------- | ------ | - | -------------------- | - | ------ | --------------------------------------------- |  | - | ---------------------------- | - |  | --------------------- | ------ | ----- |  | - | -------- |  | - | ------- | - |  | 
|                                     |  |                                    |        |   |                      |   |       
|Three Months EndedSeptember 30, 2007 |  | Natural GasGathering andProcessing |        |   | Natural GasPipelines |   |        | Natural GasLiquids Gathering andFractionation |  |   | Natural GasLiquids Pipelines |   |  | Other andEliminations |        | Total |  |   |         
|                                     |  | (Thousands of dollars)             |        |   |                     
|Net income                           |  | $                                  | 54,195 |   |                      | $ | 41,634 |                                               |  | $ | 27,063                       |   |  | $                     | 10,878 |       |  | $ | (37,854) |  | $ | 95,916  |   |  | 
|Minority interests                   |  |                                    | -      |   |                      |   | 103    |                                               |  |   | -                            |   |  |                       | 22     |       |  |   | -        |  |   | 125     |   |  | 
|Interest expense                     |  |                                    | (3,831 | ) |                      |   | 2,408  |                                               |  |   | (2,739                       | ) |  |                       | 343    |       |  |   | 37,329   |  |   | 33,510  |   |  | 
|Depreciation and amortization        |  |                                    | 11,277 |   |                      |   | 8,089  |                                               |  |   | 6,439                        |   |  |                       | 2,987  |       |  |   | 8        |  |   | 28,800  |   |  | 
|Income taxes                         |  |                                    | -      |   |                      |   | 1,277  |                                               |  |   | -                            |   |  |                       | -      |       |  |   | 921      |  |   | 2,198   |   |  | 
|Equity AFUDC                         |  |                                    | -      |   |                      |   | (1,005 | )                                             |  |   | -                            |   |  |                       | (2,687 | )     |  |   | -        |  |   | (3,692  | ) |  | 
|EBITDA                               |  | $                                  | 61,641 |   |                      | $ | 52,506 |                                               |  | $ | 30,763                       |   |  | $                     | 11,543 |       |  | $ | 404      |  | $ | 156,857 |   |  | 
|                                    



|                                     |  |                                    |        |                      |   |        |                                              |  |                             |        |                       |   |        |       |   |          |   |  |   |         |   |  | 
|------------------------------------ |  | ---------------------------------- | ------ | -------------------- | - | ------ | -------------------------------------------- |  | --------------------------- | ------ | --------------------- | - | ------ | ----- | - | -------- | - |  | - | ------- | - |  | 
|Three Months Ended September 30,2006 |  | Natural GasGathering andProcessing |        | Natural GasPipelines |   |        | Natural GasLiquidsGathering andFractionation |  | Natural GasLiquidsPipelines |        | Other andEliminations |   |        | Total |   |          |  
|                                     |  | (Thousands of dollars)             |        |                      |  
|Net income                           |  | $                                  | 62,083 |                      | $ | 40,872 |                                              |  | $                           | 18,321 |                       | $ | 7,332  |       | $ | (30,386) |   |  | $ | 98,222  |   |  | 
|Minority interests                   |  |                                    | -      |                      |   | 134    |                                              |  |                             | -      |                       |   | -      |       |   | -        |   |  |   | 134     |   |  | 
|Interest expense                     |  |                                    | -      |                      |   | 5,381  |                                              |  |                             | -      |                       |   | -      |       |   | 27,289   |   |  |   | 32,670  |   |  | 
|Depreciation and amortization        |  |                                    | 10,520 |                      |   | 8,219  |                                              |  |                             | 5,368  |                       |   | 3,010  |       |   | 400      |   |  |   | 27,517  |   |  | 
|Income taxes                         |  |                                    | 6      |                      |   | 947    |                                              |  |                             | -      |                       |   | -      |       |   | (669     | ) |  |   | 284     |   |  | 
|Equity AFUDC                         |  |                                    | -      |                      |   | (213   | )                                            |  |                             | -      |                       |   | -      |       |   | -        |   |  |   | (213    | ) |  | 
|EBITDA                               |  | $                                  | 72,609 |                      | $ | 55,340 |                                              |  | $                           | 23,689 |                       | $ | 10,342 |       | $ | (3,366   | ) |  | $ | 158,614 |   |  | 
|                                    



|                                    |  |                                    |         |   |                      |   |         |                                              |  |   |                             |   |  |                       |        |       |  |   |           |  |   |         |   |  | 
|----------------------------------- |  | ---------------------------------- | ------- | - | -------------------- | - | ------- | -------------------------------------------- |  | - | --------------------------- | - |  | --------------------- | ------ | ----- |  | - | --------- |  | - | ------- | - |  | 
|                                    |  |                                    |         |   |                      |   |        
|Nine Months EndedSeptember 30, 2007 |  | Natural GasGathering andProcessing |         |   | Natural GasPipelines |   |         | Natural GasLiquidsGathering andFractionation |  |   | Natural GasLiquidsPipelines |   |  | Other andEliminations |        | Total |  |   |          
|                                    |  | (Thousands of dollars)             |         |   |                     
|Net income                          |  | $                                  | 149,396 |   |                      | $ | 119,659 |                                              |  | $ | 93,852                      |   |  | $                     | 31,576 |       |  | $ | (108,192) |  | $ | 286,291 |   |  | 
|Minority interests                  |  |                                    | -       |   |                      |   | 280     |                                              |  |   | -                           |   |  |                       | 22     |       |  |   | -         |  |   | 302     |   |  | 
|Interest expense                    |  |                                    | (8,765  | ) |                      |   | 8,740   |                                              |  |   | (6,009                      | ) |  |                       | (599   | )     |  |   | 105,946   |  |   | 99,313  |   |  | 
|Depreciation and amortization       |  |                                    | 33,544  |   |                      |   | 24,246  |                                              |  |   | 17,525                      |   |  |                       | 8,990  |       |  |   | 21        |  |   | 84,326  |   |  | 
|Income taxes                        |  |                                    | -       |   |                      |   | 4,296   |                                              |  |   | -                           |   |  |                       | -      |       |  |   | 2,743     |  |   | 7,039   |   |  | 
|Equity AFUDC                        |  |                                    | -       |   |                      |   | (2,110  | )                                            |  |   | -                           |   |  |                       | (4,576 | )     |  |   | -         |  |   | (6,686  | ) |  | 
|EBITDA                              |  | $                                  | 174,175 |   |                      | $ | 155,111 |                                              |  | $ | 105,368                     |   |  | $                     | 35,413 |       |  | $ | 518       |  | $ | 470,585 |   |  | 
|                                   



18



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##### Table of Contents

|                                     |  |                                    |         |                      |   |         |                                               |  |                             |        |                       |   |        |       |   |         |   |  |   |         |   |  | 
|------------------------------------ |  | ---------------------------------- | ------- | -------------------- | - | ------- | --------------------------------------------- |  | --------------------------- | ------ | --------------------- | - | ------ | ----- | - | ------- | - |  | - | ------- | - |  | 
|Nine Months Ended September 30, 2006 |  | Natural GasGathering andProcessing |         | Natural GasPipelines |   |         | Natural GasLiquids Gatheringand Fractionation |  | Natural GasLiquidsPipelines |        | Other andEliminations |   |        | Total |   |         |  
|                                     |  | (Thousands of dollars)             |         |                      |  
|Net income                           |  | $                                  | 153,148 |                      | $ | 228,836 |                                               |  | $                           | 52,620 |                       | $ | 16,080 |       | $ | (85,759 | ) |  | $ | 364,925 |   |  | 
|Minority interests                   |  |                                    | -       |                      |   | 2,272   |                                               |  |                             | -      |                       |   | -      |       |   | -       |   |  |   | 2,272   |   |  | 
|Interest expense                     |  |                                    | 4,590   |                      |   | 21,043  |                                               |  |                             | 8,776  |                       |   | 4,136  |       |   | 61,346  |   |  |   | 99,891  |   |  | 
|Depreciation and amortization        |  |                                    | 31,588  |                      |   | 24,687  |                                               |  |                             | 16,134 |                       |   | 9,047  |       |   | 12,813  |   |  |   | 94,269  |   |  | 
|Income taxes                         |  |                                    | 10,806  |                      |   | 13,114  |                                               |  |                             | 3,355  |                       |   | 1,044  |       |   | (2,557  | ) |  |   | 25,762  |   |  | 
|Equity AFUDC                         |  |                                    | -       |                      |   | (511    | )                                             |  |                             | -      |                       |   | -      |       |   | -       |   |  |   | (511    | ) |  | 
|EBITDA                               |  | $                                  | 200,132 |                      | $ | 289,441 |                                               |  | $                           | 80,885 |                       | $ | 30,307 |       | $ | (14,157 | ) |  | $ | 586,608 |   |  | 
|                                    



|H. | UNCONSOLIDATED AFFILIATES
|-- | -------------------------

Equity Earnings from Investments
- The following table sets forth our equity earnings from investments for the periods indicated.



|                                           |  |                                 |        |                                |      |   |        |  |      |        |  |   |        |  | 
|------------------------------------------ |  | ------------------------------- | ------ | ------------------------------ | ---- | - | ------ |  | ---- | ------ |  | - | ------ |  | 
|                                           |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30,
|                                           |  | 2007                            |        |                                | 2006 |   | 2007   |  | 2006 |        | 
|                                           |  | (Thousands of dollars)          |        |                               
|Northern Border Pipeline                   |  | $                               | 16,363 |                                |      | $ | 16,841 |  | $    | 44,915 |  | $ | 55,691 |  | 
|Bighorn Gas Gathering, L.L.C.              |  |                                 | 1,782  |                                |      |   | 1,959  |  |      | 5,482  |  |   | 5,780  |  | 
|Fort Union Gas Gathering                   |  |                                 | 2,224  |                                |      |   | 2,346  |  |      | 7,379  |  |   | 6,624  |  | 
|Venice Energy Services Company, L.L.C. (a) |  |                                 | 298    |                                |      |   | -      |  |      | 3,148  |  |   | -      |  | 
|Lost Creek Gathering Company, L.L.C.       |  |                                 | 1,694  |                                |      |   | 1,437  |  |      | 3,327  |  |   | 4,036  |  | 
|Other                                      |  |                                 | (199   | )                              |      |   | 205    |  |      | 724    |  |   | 619    |  | 
|Equity earnings from investments           |  | $                               | 22,162 |                                |      | $ | 22,788 |  | $    | 64,975 |  | $ | 72,750 |  | 
|                                          

(a) - Our investment in Venice Energy Services Company, L.L.C. is accounted for using the cost method.

Unconsolidated Affiliates Financial Information - Summarized combined financial information of our unconsolidated affiliates is presented below.



|                         |  |                                 |         |      |   |                                |  |      |  |      |         |  |   |         |  | 
|------------------------ |  | ------------------------------- | ------- | ---- | - | ------------------------------ |  | ---- |  | ---- | ------- |  | - | ------- |  | 
|                         |  | Three Months EndedSeptember 30, |         |      |   | Nine Months EndedSeptember 30,
|                         |  | 2007                            |         | 2006 |   |                                |  | 2007 |  | 2006 |         | 
|                         |  | (Thousands of dollars)          |         |      |   |                               
|Income Statement         |  |                                 |         |      |   |                                |  |      |  |      |         |  |   |         |  | 
|Operating revenue        |  | $                               | 102,417 |      | $ | 99,317                         |  |      |  | $    | 291,304 |  | $ | 287,816 |  | 
|Operating expenses       |  |                                 | 42,817  |      |   | 41,614                         |  |      |  |      | 125,522 |  |   | 118,642 |  | 
|Net income               |  |                                 | 47,571  |      |   | 46,813                         |  |      |  |      | 131,054 |  |   | 135,719 |  | 
|Distributions paid to us |  | $                               | 20,078  |      | $ | 23,390                         |  |      |  | $    | 77,144  |  | $ | 93,209  |  | 



|I. | NET INCOME PER UNIT
|-- | -------------------

Net income per unit is computed by dividing
net income, after deducting the general partners allocation, by the weighted average number of outstanding limited partner units. The general partner owns a 2 percent interest in us and also owns incentive distribution rights that provide for
an increasing proportion of cash distributions from the partnership as the distributions made to limited partners increase above specified levels. For purposes of our calculation of net income per unit, net income is generally allocated to the
general partner as follows: (1) an amount based upon the 2 percent general partner interest in net income; and (2) the amount of the general partners incentive distribution rights based on the total cash distributions declared for
the period. The amount of incentive distribution allocated to our general partner totaled $13.0 million and $36.5 million for the three and nine months ended September 30, 2007, respectively. The $39.8 million distribution paid to our general
partner shown on the accompanying Consolidated Statement of Changes in Partners Equity and Comprehensive Income included $34.1 million in incentive distributions paid to our general partner during the first nine months of 2007. Gains resulting
from interim capital transactions, as defined in our Partnership Agreement, are generally not subject to distribution; however, the Partnership Agreement provides that if such distributions were made, the incentive



19



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distribution rights would not apply. Accordingly, the gain on sale of assets for the three and nine months ended September 30, 2007 and 2006 had no
impact on the incentive distribution rights.

As discussed in Note B, we completed the ONEOK Transactions during the second quarter of 2006; however, for
accounting purposes, the transactions were accounted for retroactive to January 1, 2006. Net income from the ONEOK Energy Assets prior to the April 2006 acquisition was approximately $35.8 million and has been reflected in our year-to-date
earnings for 2006. For purposes of our calculation of income per unit for the nine months ended September 30, 2006, these pre-acquisition earnings were allocated to the general partner as they retained the related cash flow for that period.

The following summarizes our quarterly cash distribution activity for 2007:



| |  |  | On April 17, 2007, we declared a cash distribution of $0.99 per unit for the first quarter of 2007. The distribution was paid on May 14, 2007, to
unitholders of record as of April 30, 2007.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | On July 17, 2007, we declared a cash distribution of $1.00 per unit for the second quarter of 2007. The distribution was paid on August 14, 2007, to
unitholders of record as of July 31, 2007.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | On October 16, 2007, we declared a cash distribution of $1.01 per unit ($4.04 per unit on an annualized basis) for the third quarter of 2007. The distribution
will be paid on November 14, 2007, to unitholders of record as of October 31, 2007.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|J. | RELATED-PARTY TRANSACTIONS
|-- | --------------------------

Intersegment and affiliate sales are
recorded on the same basis as sales to unaffiliated customers. Our Natural Gas Gathering and Processing segment sells natural gas to ONEOK and its subsidiaries. A significant portion of our Natural Gas Pipelines segments revenues are from
ONEOK and its subsidiaries, which utilize both transportation and storage services.

As part of the ONEOK Transactions, we acquired certain contractual
rights to the Bushton Plant that is leased by OBPI. Our Processing and Services Agreement with ONEOK and OBPI sets out the terms by which OBPI provides services at the Bushton Plant through 2012. We have contracted for all of the capacity of the
Bushton Plant from OBPI. In exchange, we pay OBPI for all direct costs and expenses of the Bushton Plant, including reimbursement of a portion of OBPIs obligations under equipment leases covering the Bushton Plant.

In April 2006, we entered into a Services Agreement with ONEOK, ONEOK Partners GP and NBP Services (the Services Agreement) that replaced the Administrative Services
Agreement between us and NBP Services. Under the Services Agreement, our operations and the operations of ONEOK and its affiliates can combine or share certain common services in order to operate more efficiently and cost effectively. Under the
Services Agreement, ONEOK provides to us at least the type and amount of services that it provides to its affiliates, including those services required to be provided pursuant to our Partnership Agreement. ONEOK Partners GP continues to operate our
interstate natural gas pipeline assets according to each pipelines operating agreement, except for the operating agreement between ONEOK Partners GP and Northern Border Pipeline, which terminated effective April 1, 2007. ONEOK Partners GP
may purchase services from ONEOK and its affiliates pursuant to the terms of the Services Agreement. ONEOK Partners GP has no employees and utilizes the services of ONEOK and ONEOK Services Company to fulfill its responsibilities.

ONEOK and its affiliates provide a variety of services to us under the Services Agreement, including cash management and financing services, employee benefits provided
through ONEOKs benefit plans, administrative services, insurance and office space leased in ONEOKs headquarters building and other field locations. Where costs are specifically incurred on behalf of one of our affiliates, the costs are
billed directly to us by ONEOK. In other situations, the costs may be allocated to us through a variety of methods, depending upon the nature of the expense and activities. For example, a service that applies equally to all employees is allocated
based upon the number of employees. However, an expense benefiting the consolidated company but having no direct basis for allocation is allocated by the modified Distrigas method, a method using a combination of ratios that include gross plant and
investment, operating income and wages. All costs directly charged or allocated to us are included in our Consolidated Statements of Income.

An affiliate
of ONEOK enters into some of the commodity derivative contracts at the direction of and on behalf of our Natural Gas Gathering and Processing segment. See Note C for a discussion of our derivative instruments and hedging activities.



20



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The following table sets forth the transactions with related parties for the periods
indicated.



|                                    |  |                                 |         |                                |   |         |  |      |         |  |   |        
|----------------------------------- |  | ------------------------------- | ------- | ------------------------------ | - | ------- |  | ---- | ------- |  | - | -------
|                                    |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30,
|                                    |  | 2007                            |         | 2006                           |   | 2007    |  | 2006
|                                    |  | (Thousands of dollars)         
|Revenues                            |  | $                               | 170,576 |                                | $ | 179,118 |  | $    | 491,706 |  | $ | 436,035
|                                   
|Expenses                            |  |                                 |         |                                |   |         |  |      |         |  |   |        
|Administrative and general expenses |  | $                               | 36,771  |                                | $ | 41,991  |  | $    | 121,981 |  | $ | 122,659
|Interest expense                    |  |                                 | -       |                                |   | -       |  |      | -       |  |   | 21,281 
|Total expenses                      |  | $                               | 36,771  |                                | $ | 41,991  |  | $    | 121,981 |  | $ | 143,940
|                                   



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##### Table of Contents

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q, as
well as our Annual Report on Form 10-K for the year ended December 31, 2006. Due to the seasonal nature of our business, the results of operations for the three and nine months ended September 30, 2007, are not necessarily indicative of
the results that may be expected for a 12-month period.

EXECUTIVE SUMMARY

The following discussion highlights some of our achievements and significant issues affecting us for the periods presented. Please refer to the Financial and Operating Results section of Managements Discussion
and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements for a complete explanation of the following items.

In July 2007, we announced a series of organizational changes that led to the realignment of our previous business segments. Our financial results are now reported in these four segments: (i) Natural Gas Gathering and Processing, which
remains unchanged; (ii) Natural Gas Pipelines, which is comprised of our former interstate natural gas pipelines segment and the natural gas operations of our former pipelines and storage segment; (iii) Natural Gas Liquids Gathering and
Fractionation, which remains unchanged; and (iv) Natural Gas Liquids Pipelines, which is comprised of the natural gas liquids assets of our former pipelines and storage segment. Prior periods have been restated to reflect these segment changes.
The change reflects the increasing scale of our natural gas liquids business, which has grown significantly since 2005 and will expand further as we integrate the assets from the acquisition of an interstate natural gas liquids and refined petroleum
products pipeline system and related assets from a subsidiary of Kinder Morgan Energy Partners, L.P. (Kinder Morgan) into our Natural Gas Liquids Pipelines segment and complete our other internal growth projects.

In September 2007, we completed an underwritten public debt offering of $600 million to finance the assets acquired from Kinder Morgan and to refinance short-term debt,
which resulted from our internal growth capital projects. Both the assets acquired from Kinder Morgan and our capital projects are discussed below in the Significant Acquisitions and Divestitures and the Capital Projects sections.

In October 2007, we declared an increase in our cash distribution to $1.01 per unit ($4.04 per unit on an annualized basis), an increase of approximately 4 percent over
the $0.97 declared in October 2006.

Net income per unit decreased to $0.98 for the three months ended September 30, 2007, compared with $1.04 in
2006. For the nine-month period, net income per unit decreased to $2.94 from $4.26 for the same period last year. The decrease in net income per unit for the nine-month period is primarily due to the gain on sale of a 20 percent partnership interest
in Northern Border Pipeline in the second quarter of 2006. Operating income decreased to $105.1 million for the three-month period compared with $107.7 million for the same period last year. Excluding the gain on sale of assets, operating income
increased to $315.1 million for the nine month-period compared with $305.2 million for the same period last year. Our Natural Gas Liquids Gathering and Fractionation segment and Natural Gas Liquids Pipelines segment benefited primarily from new
supply connections that increased volumes gathered, transported, fractionated and sold. These increases were offset by decreased net margin in our Natural Gas Gathering and Processing segment, primarily due to lower natural gas volumes processed as
a result of contract terminations in late 2006 and lower realized natural gas prices. In addition to the factors above, net margin increased for the nine months ended September 30, 2007, due to higher product price spreads and higher
isomerization price spreads in our Natural Gas Liquids Gathering and Fractionation segment.

SIGNIFICANT ACQUISITIONS AND DIVESTITURES

Acquisition of NGL Pipeline - In October 2007, we completed the acquisition of an interstate natural gas liquids and refined petroleum products pipeline system
and related assets from a subsidiary of Kinder Morgan for approximately $300 million. The system extends from Bushton and Conway, Kansas, to Chicago, Illinois, and transports, stores and delivers a full range of NGL and refined products. The
FERC-regulated system spans 1,585 miles and has a capacity to transport up to 134 MBbl/d. The transaction includes approximately 978 MBbl of owned storage capacity, eight NGL terminals and a 50 percent ownership of the Heartland Pipeline Company
(Heartland). ConocoPhillips owns the other 50 percent of Heartland and is the managing partner of the Heartland joint venture, which consists primarily of three refined products terminals and connecting pipelines. Financing for this transaction came
from the proceeds of our September 2007 issuance of $600 million 6.85 percent Senior Notes due 2037 (2037 Notes). See Note F of the Notes to Consolidated Financial Statements in this Quarterly



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Report on Form 10-Q for additional information about the debt issuance. These assets will be included in our Natural Gas Liquids Pipelines segment.

ONEOK Transactions - In April 2006, we completed the acquisition and consolidated certain companies comprising ONEOKs former gathering and
processing, natural gas liquids, and pipelines and storage segments (collectively, the ONEOK Energy Assets) in a series of transactions (collectively the ONEOK Transactions). This acquisition is accounted for in our Natural Gas Gathering and
Processing, Natural Gas Pipelines, Natural Gas Liquids and Fractionation, and Natural Gas Liquids Pipelines segments.

Acquisition of ONEOK Energy
Assets - We acquired the ONEOK Energy Assets for approximately $3 billion, including $1.35 billion in cash, before adjustments, and approximately 36.5 million Class B limited partner units. The Class B limited partner units and the related
general partner interest contribution were valued at approximately $1.65 billion. ONEOK now owns approximately 37.0 million of our limited partner units which, when combined with its general partner interest, increased its total interest in us
to approximately 45.7 percent. We used $1.05 billion drawn under our $1.1 billion, 364-day credit agreement (the Bridge Facility), coupled with the proceeds from the sale of a 20 percent partnership interest in Northern Border Pipeline, to finance
the cash portion of the transaction. The assets were recorded at historical cost rather than at fair value since these transactions were between affiliates under common control. These assets and their related operations are included in our
consolidated financial statements retroactive to January 1, 2006.

Equity Issuance - In connection with the ONEOK Transactions, we amended our
Partnership Agreement to provide for the issuance of Class B limited partner units and issued approximately 36.5 million Class B limited partner units to ONEOK. The Class B limited partner units were issued on April 6, 2006. For more
information regarding the Class B units, refer to discussion of the ONEOK Transactions in Note B of the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Purchase and Sale of General Partner Interest - In April 2006, ONEOK acquired ONEOK NB, formerly known as Northwest Border Pipeline Company, an affiliate of TransCanada that held a 0.35 percent general partner
interest in us. As a result, ONEOK now owns our entire 2 percent general partner interest and controls us.

Disposition of 20 Percent Partnership
Interest in Northern Border Pipeline - In April 2006, we completed the sale of a 20 percent partnership interest in Northern Border Pipeline to TC PipeLines for approximately $297 million to help finance the acquisition of the ONEOK Energy
Assets. We recorded a gain on the sale of approximately $113.9 million in the second quarter of 2006. We and TC PipeLines each now own a 50 percent interest in Northern Border Pipeline and an affiliate of TransCanada became the operator of the
pipeline in April 2007. Effective January 1, 2006, our interest in Northern Border Pipeline is accounted for as an investment under the equity method in our Natural Gas Pipelines segment.

Acquisition of Guardian Pipeline Interests - In April 2006, we acquired the 66-2/3 percent interest in Guardian Pipeline not previously owned by us for
approximately $77 million, increasing our ownership to 100 percent. We used borrowings from our credit facility to fund the acquisition of the additional interest in Guardian Pipeline. Guardian Pipeline is consolidated in our consolidated financial
statements and reported in our Natural Gas Pipelines segment as of January 1, 2006.

CAPITAL PROJECTS

Overland Pass Pipeline Company - In May 2006, we entered into an agreement with a subsidiary of The Williams Companies, Inc. (Williams) to form a joint venture
called Overland Pass Pipeline Company. Overland Pass Pipeline Company will build a 760-mile natural gas liquids pipeline from Opal, Wyoming, to the Mid-Continent natural gas liquids market center in Conway, Kansas. The pipeline will be initially
designed to transport approximately 110 MBbl/d of NGLs, which can be increased to approximately 150 MBbl/d with additional pump facilities. During 2006, we paid $11.6 million to Williams for the acquisition of our interest in the joint venture and
for reimbursement of initial capital expenditures. As the 99 percent owner of the joint venture, we will manage the construction project, advance all costs associated with construction and operate the pipeline. Within two years of the pipeline
becoming operational, Williams will have the option to increase its ownership up to 50 percent by reimbursing us for its proportionate share of all construction costs. If Williams exercises its option to increase its ownership to the full 50
percent, Williams would have the option to become operator. This project has received the required approvals of various state and federal regulatory authorities and construction of the pipeline has begun, with start up scheduled for early 2008.

As part of a long-term agreement, Williams dedicated its NGL production from two of its natural gas processing plants in Wyoming to the joint-venture
company. We will provide downstream fractionation, storage and transportation services to



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Williams. The pipeline project is currently estimated to cost approximately $535 million, excluding AFUDC. Since our initial estimate in early 2006, there
has been a significant increase in the demand for pipeline construction-related services, which has led to higher rates, particularly for construction labor and equipment. Additionally due to the extended permitting process, the construction period
will occur during the winter months, which will contribute to added construction costs. The severity of the winter conditions could further impact our cost estimates. In addition, we currently expect to invest approximately $216 million, excluding
AFUDC, to expand our existing fractionation capabilities and the capacity of our natural gas liquids distribution pipelines. Financing for the projects may include a combination of short- or long-term debt or equity. Overland Pass Pipeline Company
is included in our Natural Gas Liquids Pipelines segment while the associated expansions are included in our Natural Gas Liquids Gathering and Fractionation segment and Natural Gas Liquids Pipelines segment.

Piceance Lateral Pipeline - In March 2007, we announced that Overland Pass Pipeline Company plans to construct a 150-mile lateral pipeline with capacity to
transport as much as 100 MBbl/d of NGLs from the Piceance Basin in Colorado to the Overland Pass Pipeline. Williams announced that it intends to construct a new natural gas processing plant in the Piceance Basin and will dedicate its NGL production
from that plant and an existing plant to be delivered into the lateral pipeline. This project requires the approval of various state and federal regulatory authorities. Assuming we obtain the required regulatory approvals, we currently expect
construction of this lateral pipeline to begin in late 2008 and be completed in early 2009, at a current cost estimate of approximately $120 million, excluding AFUDC. This project is in our Natural Gas Liquids Pipelines segment.

Arbuckle Pipeline Natural Gas Liquids Pipeline Project - In March 2007, we announced plans to build the 440-mile Arbuckle Pipeline, a natural gas liquids pipeline
from southern Oklahoma through northern Texas and continuing on to the Texas Gulf Coast, at a current estimated cost of approximately $260 million, excluding AFUDC. The Arbuckle Pipeline will have the capacity to transport 160 MBbl/d of raw natural
gas liquids and will interconnect with our existing Mid-Continent infrastructure and our fractionation facility in Mont Belvieu, Texas, and other Gulf Coast-area fractionators. The expansion project is expected to be complete by early 2009. This
project is in our Natural Gas Liquids Pipelines segment.

Williston Basin Gas Processing Plant Expansion - In March 2007, we announced the expansion
of our Grasslands natural gas processing facility in North Dakota at a cost of approximately $30 million, excluding AFUDC. The Grasslands facility is our largest natural gas processing plant in the Williston Basin. The expansion will increase
processing capacity to approximately 100 MMcf/d from its current capacity of 63 MMcf/d as well as increasing fractionation capacity to approximately 12 MBbl/d from 8 MBbl/d. The expansion project is expected to come on line in phases starting in the
fourth quarter of 2007 through the second quarter of 2008. This project is in our Natural Gas Gathering and Processing segment.

Fort Union Gas
Gathering Expansion Project - In January 2007, our Crestone Powder River, L.L.C. subsidiary announced that Fort Union Gas Gathering will double its existing gathering pipeline capacity by adding 148 miles of new gathering lines and 649 MMcf/d of
additional capacity in the Powder River basin. The expansion is expected to cost approximately $110 million, excluding AFUDC, which will be financed within the Fort Union Gas Gathering partnership and will occur in two phases, with 240 MMcf/d
expected to be in service by the fourth quarter of 2007 and 409 MMcf/d by the first quarter of 2008. The additional capacity has been fully subscribed for 10 years beginning with the in-service date of the expansion. Crestone Powder River,
L.L.C. owns approximately 37 percent of Fort Union Gas Gathering. This project is in our Natural Gas Gathering and Processing segment and is accounted for under the equity method of accounting.

Guardian Pipeline Expansion and Extension Project - In October 2006, Guardian Pipeline filed its application for a certificate of public convenience and necessity
with the FERC for authorization to construct and operate approximately 119 miles of new pipeline with capacity to transport 537 MMcf/d. Guardian Pipeline received its Final Environmental Impact Statement from the FERC in October 2007. The pipeline
expansion will extend Guardian Pipeline from the Milwaukee, Wisconsin, area to the Green Bay, Wisconsin, area. The project is supported by long-term shipper commitments. The cost of the project is currently estimated to be $250 million, excluding
AFUDC, with a targeted in-service date of November 2008. This project is in our Natural Gas Pipelines segment.

Midwestern Gas Transmission Eastern
Extension Project - In March 2006, Midwestern Gas Transmission accepted the certificate of public convenience and necessity issued by the FERC for its Eastern Extension Project. An organization that is opposed to, and includes landowners
affected by, the project filed a request for rehearing and for a stay of the March 2006 Order. In August 2006, the FERC denied those requests. In July 2007, we received FERC authorization to construct, which is a notice to proceed. Construction has
begun and the pipeline extension is anticipated to be in service in the fourth quarter of 2007. The Eastern Extension Project will add approximately 31 miles of pipeline with capacity to transport 120 MMcf/d and total capital expenditures are
currently estimated to be $41 million, excluding AFUDC. This project is in our Natural Gas Pipelines segment.



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IMPACT OF NEW ACCOUNTING STANDARDS

Information about the impact of Statement 157, Fair Value Measurements, Statement 159, The Fair Value Option for Financial Assets and Financial Liabilities, FIN 48, Accounting for
Uncertainty in Income TaxesAn Interpretation of FASB Statement No. 109, and EITF 07-4, Application of the Two-Class Method under FASB Statement No. 128 to Master Limited Partnerships is included in Note A of the
Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions with respect to values or conditions that cannot be known
with certainty that affect the reported amount of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenue
and expenses during the reporting period. Although we believe these estimates are reasonable, actual results could differ from our estimates.

Information
about our critical accounting estimates is included under Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates, in our Annual Report on Form
10-K for the year ended December 31, 2006.

FINANCIAL AND OPERATING RESULTS

Consolidated Operations

Selected Financial Information - The following table sets forth certain selected
consolidated financial information for the periods indicated.



|                                                          |  |                                 |           |                                |   |           |  |      |           |  |   |           |  | 
|--------------------------------------------------------- |  | ------------------------------- | --------- | ------------------------------ | - | --------- |  | ---- | --------- |  | - | --------- |  | 
|                                                          |  | Three Months EndedSeptember 30, |           | Nine Months EndedSeptember 30, |   |          
|Financial Results                                         |  | 2007                            |           | 2006                           |   | 2007      |  | 2006 |           | 
|                                                          |  | (Thousands of dollars)          |           |                               
|Operating revenue                                         |  | $                               | 1,410,257 |                                | $ | 1,218,541 |  | $    | 3,954,245 |  | $ | 3,562,013 |  | 
|Cost of sales and fuel                                    |  |                                 | 1,196,373 |                                |   | 1,007,075 |  |      | 3,317,421 |  |   | 2,935,374 |  | 
|Net margin                                                |  |                                 | 213,884   |                                |   | 211,466   |  |      | 636,824   |  |   | 626,639   |  | 
|Operating costs                                           |  |                                 | 80,079    |                                |   | 76,312    |  |      | 237,383   |  |   | 227,146   |  | 
|Depreciation and amortization                             |  |                                 | 28,800    |                                |   | 27,517    |  |      | 84,326    |  |   | 94,269    |  | 
|Gain on sale of assets                                    |  |                                 | 111       |                                |   | 36        |  |      | 1,935     |  |   | 115,402   |  | 
|Operating income                                          |  | $                               | 105,116   |                                | $ | 107,673   |  | $    | 317,050   |  | $ | 420,626   |  | 
|                                                         
|Equity earnings from investments                          |  | $                               | 22,162    |                                | $ | 22,788    |  | $    | 64,975    |  | $ | 72,750    |  | 
|Interest expense                                          |  | $                               | 33,510    |                                | $ | 32,670    |  | $    | 99,313    |  | $ | 99,891    |  | 
|Minority interests in income of consolidated subsidiaries |  | $                               | 125       |                                | $ | 134       |  | $    | 302       |  | $ | 2,272     |  | 

Operating Results - Net margin increased for the three months ended September 30, 2007, primarily due
to our Natural Gas Liquids Gathering and Fractionation segment and Natural Gas Liquids Pipelines segment, which benefited primarily from new supply connections that increased volumes gathered, transported, fractionated and sold. These increases were
offset by decreased net margin in our Natural Gas Gathering and Processing segment, primarily due to lower natural gas volumes processed as a result of contract terminations in late 2006 and lower realized natural gas prices. In addition to the
factors above, net margin increased for the nine months ended September 30, 2007, due to higher product price spreads and higher isomerization price spreads in our Natural Gas Liquids Gathering and Fractionation segment.

Operating costs increased for the three and nine months ended September 30, 2007, primarily due to higher employee-related costs and the acquisition of the Mont
Belvieu storage business in the fourth quarter of 2006. The three-month period was also impacted by higher contract service costs at certain storage facilities.

Depreciation and amortization decreased for the nine months ended September 30, 2007, primarily due to a goodwill and asset impairment charge of $11.8 million recorded in the second quarter of 2006 related to Black Mesa Pipeline, Inc.,
which is included in our Other segment.



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Gain on sale of assets decreased for the nine months ended September 30, 2007, primarily due to the $113.9 million
gain on sale of a 20 percent partnership interest in Northern Border Pipeline recorded in the second quarter of 2006 in our Natural Gas Pipelines segment.

Equity earnings from investments for the three and nine months ended September 30, 2007 and 2006, primarily include earnings from our interest in Northern Border Pipeline. The decrease in equity earnings from investments for the
nine-month period is primarily due to the decrease in our share of Northern Border Pipelines earnings from 70 percent in the first quarter of 2006 to 50 percent beginning in the second quarter of 2006. See page 23 for discussion of the
disposition of the 20 percent partnership interest in Northern Border Pipeline.

Minority interest in income of consolidated subsidiaries decreased for the
nine months ended September 30, 2007, compared with the same period in 2006, primarily due to our acquisition of the remaining interest in Guardian Pipeline. Minority interest in income of consolidated subsidiaries for the nine months
ended September 30, 2006, included the 66-2/3 percent interest in Guardian Pipeline that we did not own until April 2006. We owned 100 percent of Guardian Pipeline beginning in April 2006, resulting in no minority interest in income of
consolidated subsidiaries related to Guardian Pipeline after March 31, 2006.

Additional information regarding our results of operations is provided
in the following discussion of operating results for each of our segments.

Natural Gas Gathering and Processing

Overview - Our former gathering and processing segment is now called our Natural Gas Gathering and Processing segment.

Our operations include gathering of natural gas production from crude oil and natural gas wells. We gather natural gas in the Mid-Continent region, which includes the
Anadarko Basin of Oklahoma and the Hugoton and Central Kansas Uplift Basins of Kansas. We also gather natural gas in three producing basins in the Rocky Mountain region: (1) the Williston Basin, which spans portions of Montana, North Dakota and
the Canadian province of Saskatchewan, (2) the Powder River Basin of Wyoming and (3) the Wind River Basin of Wyoming.

Through gathering systems,
natural gas volumes are aggregated for removal of water vapor, solids and other contaminants and to extract NGLs in order to provide marketable natural gas, commonly referred to as residue gas. When the liquids are separated from the raw natural gas
at the processing plants, the liquids are in the form of a mixed NGL stream. This mixed NGL stream is generally shipped to fractionators, where by applying heat and pressure, the raw NGL stream is separated into marketable products, such as
ethane/propane mix, propane, iso-butane, normal butane and natural gasoline (collectively, NGL products). These NGL products can then be stored, transported and marketed to a diverse customer base.

Selected Financial and Operating Information - The following tables set forth certain selected financial and operating results for our Natural Gas Gathering and
Processing segment for the periods indicated.



|                                                                          |  |                                 |         |                                |   |         |  |      |         |  |   |         |  | 
|------------------------------------------------------------------------- |  | ------------------------------- | ------- | ------------------------------ | - | ------- |  | ---- | ------- |  | - | ------- |  | 
|                                                                          |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30, |   |        
|Financial Results                                                         |  | 2007                            |         | 2006                           |   | 2007    |  | 2006 |         | 
|                                                                          |  | (Thousands of dollars)          |         |                               
|Natural gas liquids and condensate sales                                  |  | $                               | 168,668 |                                | $ | 176,165 |  | $    | 455,122 |  | $ | 488,899 |  | 
|Gas sales                                                                 |  |                                 | 143,956 |                                |   | 169,545 |  |      | 472,340 |  |   | 543,833 |  | 
|Gathering, compression, dehydration and processing fees and other revenue |  |                                 | 36,327  |                                |   | 33,211  |  |      | 107,127 |  |   | 94,804  |  | 
|Cost of sales and fuel                                                    |  |                                 | 261,326 |                                |   | 279,476 |  |      | 785,193 |  |   | 849,561 |  | 
|Net margin                                                                |  |                                 | 87,625  |                                |   | 99,445  |  |      | 249,396 |  |   | 277,975 |  | 
|Operating costs                                                           |  |                                 | 31,808  |                                |   | 32,714  |  |      | 96,399  |  |   | 97,351  |  | 
|Depreciation and amortization                                             |  |                                 | 11,277  |                                |   | 10,520  |  |      | 33,544  |  |   | 31,588  |  | 
|Gain on sale of assets                                                    |  |                                 | 10      |                                |   | 7       |  |      | 1,823   |  |   | 372     |  | 
|Operating income                                                          |  | $                               | 44,550  |                                | $ | 56,218  |  | $    | 121,276 |  | $ | 149,408 |  | 
|                                                                         
|Equity earnings from investments                                          |  | $                               | 6,180   |                                | $ | 5,741   |  | $    | 19,518  |  | $ | 16,440  |  | 



26



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##### Table of Contents

|                                              |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |   |  | 
|--------------------------------------------- |  | ------------------------------- | --------- | - | ------------------------------ | - | --------- | ---- |  | - | --------- | - |  | - | --------- | - |  | 
|                                              |  | Three Months EndedSeptember 30, |           |   | Nine Months EndedSeptember 30, |   |           |     
|Operating Information                         |  | 2007                            |           |   | 2006                           |   |           | 2007 |  |   | 2006      |   |  |  
|Total gas gathered (BBtu/d)                   |  |                                 | 1,170     |   |                                |   | 1,202     |      |  |   | 1,168     |   |  |   | 1,165     |   |  | 
|Total gas processed(BBtu/d)                   |  |                                 | 617       |   |                                |   | 1,017     |      |  |   | 615       |   |  |   | 980       |   |  | 
|Natural gas liquids sales (MBbl/d)            |  |                                 | 37        |   |                                |   | 43        |      |  |   | 37        |   |  |   | 42        |   |  | 
|Natural gas sales (BBtu/d)                    |  |                                 | 289       |   |                                |   | 324       |      |  |   | 279       |   |  |   | 307       |   |  | 
|Capital expenditures (Thousands of dollars)   |  | $                               | 32,026    |   |                                | $ | 13,898    |      |  | $ | 70,859    |   |  | $ | 36,296    |   |  | 
|Realized composite NGL sales price ($/gallon) |  | $                               | 1.09      |   |                                | $ | 1.02      |      |  | $ | 0.97      |   |  | $ | 0.95      |   |  | 
|Realized condensate sales price ($/Bbl)       |  | $                               | 69.05     |   |                                | $ | 51.79     |      |  | $ | 61.25     |   |  | $ | 56.75     |   |  | 
|Realized natural gas sales price ($/MMBtu)    |  | $                               | 5.41      |   |                                | $ | 5.68      |      |  | $ | 6.20      |   |  | $ | 6.48      |   |  | 
|Realized gross processing spread ($/MMBtu)    |  | $                               | 5.54      |   |                                | $ | 6.34      |      |  | $ | 4.56      |   |  | $ | 5.27      |   |  | 
|                                              |  |                                 |          
|                                              |  | Three Months EndedSeptember 30, |           |   | Nine Months EndedSeptember 30, |   |           |     
|                                              |  | 2007                            |           |   | 2006                           |   |           | 2007 |  |   | 2006      |   |  |  
|Percent of proceeds                           |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |   |  | 
|Wellhead purchases (MMBtu/d)                  |  |                                 | 76,841    |   |                                |   | 117,310   |      |  |   | 86,361    |   |  |   | 123,041   |   |  | 
|NGL sales (Bbl/d)                             |  |                                 | 5,680     |   |                                |   | 7,875     |      |  |   | 5,911     |   |  |   | 7,408     |   |  | 
|Residue sales (MMBtu/d)                       |  |                                 | 34,691    |   |                                |   | 30,375    |      |  |   | 32,252    |   |  |   | 29,550    |   |  | 
|Condensate sales(Bbl/d)                       |  |                                 | 681       |   |                                |   | 1,098     |      |  |   | 695       |   |  |   | 1,111     |   |  | 
|Percentage of total net margin                |  |                                 | 53        | % |                                |   | 53        | %    |  |   | 56        | % |  |   | 58        | % |  | 
|Fee-based                                     |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |   |  | 
|Wellhead volumes (MMBtu/d)                    |  |                                 | 1,170,030 |   |                                |   | 1,202,100 |      |  |   | 1,168,360 |   |  |   | 1,165,159 |   |  | 
|Average rate ($/MMBtu)                        |  | $                               | 0.26      |   |                                | $ | 0.23      |      |  | $ | 0.26      |   |  | $ | 0.22      |   |  | 
|Percentage of total net margin                |  |                                 | 32        | % |                                |   | 26        | %    |  |   | 32        | % |  |   | 26        | % |  | 
|Keep-whole                                    |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |   |  | 
|NGL shrink (MMBtu/d)                          |  |                                 | 22,056    |   |                                |   | 37,078    |      |  |   | 23,555    |   |  |   | 37,009    |   |  | 
|Plant fuel (MMBtu/d)                          |  |                                 | 2,605     |   |                                |   | 5,074     |      |  |   | 2,785     |   |  |   | 4,932     |   |  | 
|Condensate shrink (MMBtu/d)                   |  |                                 | 1,733     |   |                                |   | 3,421     |      |  |   | 2,299     |   |  |   | 3,297     |   |  | 
|Condensate sales (Bbl/d)                      |  |                                 | 351       |   |                                |   | 703       |      |  |   | 465       |   |  |   | 677       |   |  | 
|Percentage of total net margin                |  |                                 | 15        | % |                                |   | 21        | %    |  |   | 12        | % |  |   | 16        | % |  | 

Operating Results - Net margin decreased $11.8 million for the three months ended September 30, 2007,
compared with the same period last year, primarily due to:

| |  |  | $10.0 million decrease from lower volumes processed as a result of contract terminations in late 2006,
| | - |  | ------------------------------------------------------------------------------------------------------

| |  |  | $3.9 million decrease primarily due to lower processed volumes associated with summer flooding in the Mid-Continent region and reduced processing capacity due to a
shutdown to install additional processing and fractionation capacity at our Grasslands plant located in the Williston Basin, and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | $2.9 million decrease primarily due to lower realized natural gas prices, partially offset by
| | - |  | ---------------------------------------------------------------------------------------------

| |  |  | $5.0 million increase in fee margins primarily from improved contractual terms in our gathering business.
| | - |  | ---------------------------------------------------------------------------------------------------------

Net margin decreased $28.6 million for the nine months ended September 30, 2007, compared with the same period last year, primarily due to:

| |  |  | $20.9 million decrease from lower volumes processed as a result of contract terminations in late 2006,
| | - |  | ------------------------------------------------------------------------------------------------------

| |  |  | $13.5 million decrease primarily due to lower realized natural gas prices, and
| | - |  | ------------------------------------------------------------------------------

| |  |  | $4.9 million decrease due to lower volumes processed primarily associated with winter storms and summer flooding in the Mid-Continent region and reduced processing
capacity due to a shutdown to install additional processing and fractionation capacity at our Grasslands plant, partially offset by
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | $10.7 million increase in fee margins primarily from improved contractual terms in our gathering business.
| | - |  | ----------------------------------------------------------------------------------------------------------

Depreciation and amortization and capital expenditures increased for both the three- and nine-month periods. The increase in depreciation and amortization primarily
relates to increased depreciation expense associated with our capital projects, which are discussed beginning on page 23.

The increase in earnings from
investments for both the three- and nine-month periods is driven primarily by the earnings related to distributions recorded in these periods from our 10.2 percent interest in Venice Energy Services Company, L.L.C., which is accounted for under the
cost method.



27



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##### Table of Contents

Our Natural Gas Gathering and Processing segment is exposed to commodity price risk, primarily from NGLs, as a result of
our contractual obligations for services provided. A small percentage of our services are provided through keep-whole arrangements. Our realized gross processing spread for the periods reported was above the five-year average of $2.55 per MMBtu.
Based on current market conditions, the gross processing spread for the remainder of 2007 is expected to be above the five-year average. See discussion regarding our commodity price risk beginning on page 38 under Commodity Price Risk in
Item 3, Quantitative and Qualitative Disclosures about Market Risk.

Natural Gas Pipelines

Overview - Our Natural Gas Pipelines segment is comprised of our previous interstate pipeline segment and the natural gas operations of our previous pipelines and
storage segment.

The segment primarily operates interstate and intrastate natural gas transmission pipelines, natural gas storage facilities and
non-processable natural gas gathering facilities. We also provide interstate natural gas transportation and storage service in accordance with Section 311(a) of the Natural Gas Policy Act.

Our interstate natural gas pipeline assets transport natural gas through FERC-regulated interstate natural gas pipelines in Montana, North Dakota, South Dakota,
Minnesota, Wisconsin, Iowa, Illinois, Indiana, Kentucky, Tennessee, Oklahoma, Texas and New Mexico. Our pipelines include Midwestern Gas Transmission, Guardian Pipeline, Viking Gas Transmission, OkTex Pipeline and a 50 percent interest in Northern
Border Pipeline.

Our intrastate natural gas pipeline assets in Oklahoma have access to the major natural gas producing areas and transport natural gas
throughout the state. We also have access to the major natural gas producing area in south central Kansas. In Texas, our intrastate natural gas pipelines are connected to the major natural gas producing areas in the Texas panhandle and the Permian
Basin, and transport natural gas to the Waha Hub, where other pipelines may be accessed for transportation east to the Houston Ship Channel market, north into the Mid-Continent market and west to the California market.

We own or reserve storage capacity in five underground natural gas storage facilities in Oklahoma, three underground natural gas storage facilities in Kansas and three
underground natural gas storage facilities in Texas.

Our transportation contracts for our regulated natural gas activities are based upon rates stated in
our tariffs. Tariffs specify the maximum rates customers can be charged, which can be discounted to meet competition if necessary, and the general terms and conditions for pipeline transportation service, which are established in FERC or appropriate
state jurisdictional agency proceedings known as rate cases. In Texas and Kansas, natural gas storage service is a fee business that may be regulated by the state in which the facility operates and by the FERC for certain types of services. In
Oklahoma, natural gas gathering and natural gas storage operations are not subject to rate regulation and have market-based rate authority from the FERC for certain types of services.

Our Natural Gas Pipelines segments revenues are typically derived from fee services from the following types of contracts.

| |  |  | Firm Service - Customers can reserve a fixed quantity of pipeline or storage capacity for the term of their contract. Under this type of contract, the customer pays
a fixed fee for a specified quantity regardless of their actual usage. The customer then typically pays incremental fees, known as commodity charges, that are based upon the actual volume of natural gas they transport or store and/or we may retain a
specified volume of natural gas in-kind for fuel. Under the firm service contract, the customer is generally guaranteed access to the capacity they reserve.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Interruptible Service - Customers with interruptible service transportation and storage agreements may utilize available capacity after firm service requests are
satisfied or on an as available basis. Interruptible service customers are typically assessed fees, such as a commodity charge, based on their actual usage and/or we may retain a specified volume of natural gas in-kind for fuel. Under the
interruptible service contract, the customer is not guaranteed use of our pipelines and storage facilities unless excess capacity is available.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our Natural Gas Pipelines segments assets consist of the following:

| |  |  | approximately 1,270 miles of FERC-regulated interstate natural gas pipelines with approximately 2.0 Bcf/d of peak transportation capacity,
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | approximately 5,700 miles of intrastate natural gas gathering and state-regulated intrastate transmission pipelines with peak transportation capacity of
approximately 2.9 Bcf/d,
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | 11 underground natural gas storage facilities in Oklahoma, Kansas and Texas with active working gas capacity of approximately 51.6 Bcf, and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | our 50 percent interest in Northern Border Pipeline.
| | - |  | ----------------------------------------------------



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##### Table of Contents

See Part I, Item 1, Business, for our former pipelines and storage segment and our interstate segment in
our Annual Report on Form 10-K for the year ended December 31, 2006 for discussion of market condition and seasonality.

Selected Financial and
Operating Information - The following tables set forth certain selected financial and operating results for our Natural Gas Pipelines segment for the periods indicated.



|                                                         |  |                                 |        |                                |   |        |  |      |         |  |   |         |  | 
|-------------------------------------------------------- |  | ------------------------------- | ------ | ------------------------------ | - | ------ |  | ---- | ------- |  | - | ------- |  | 
|                                                         |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30, |   |       
|Financial Results                                        |  | 2007                            |        | 2006                           |   | 2007   |  | 2006 |         | 
|                                                         |  | (Thousands of dollars)          |        |                               
|Transportation revenue                                   |  | $                               | 55,641 |                                | $ | 55,814 |  | $    | 171,543 |  | $ | 176,568 |  | 
|Storage revenue                                          |  |                                 | 13,579 |                                |   | 11,839 |  |      | 40,984  |  |   | 36,996  |  | 
|Gas sales and other revenue                              |  |                                 | 4,144  |                                |   | 19,294 |  |      | 7,198   |  |   | 26,183  |  | 
|Cost of sales                                            |  |                                 | 13,117 |                                |   | 25,838 |  |      | 40,045  |  |   | 54,567  |  | 
|Net margin                                               |  |                                 | 60,247 |                                |   | 61,109 |  |      | 179,680 |  |   | 185,180 |  | 
|Operating costs                                          |  |                                 | 24,109 |                                |   | 22,750 |  |      | 69,953  |  |   | 66,883  |  | 
|Depreciation and amortization                            |  |                                 | 8,089  |                                |   | 8,219  |  |      | 24,246  |  |   | 24,687  |  | 
|Gain on sale of assets                                   |  |                                 | 73     |                                |   | -      |  |      | 79      |  |   | 114,867 |  | 
|Operating income                                         |  | $                               | 28,122 |                                | $ | 30,140 |  | $    | 85,560  |  | $ | 208,477 |  | 
|                                                        
|Equity earnings from investments                         |  | $                               | 16,493 |                                | $ | 16,943 |  | $    | 45,275  |  | $ | 56,062  |  | 
|Minority interest in income of consolidated subsidiaries |  | $                               | 103    |                                | $ | 134    |  | $    | 280     |  | $ | 2,272   |  | 
|                                                         |  |                                 |       
|                                                         |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30, |   |       
|Operating Information (a)                                |  | 2007                            |        | 2006                           |   | 2007   |  | 2006 |         | 
|Natural gas transported (MMcf/d)                         |  |                                 | 3,378  |                                |   | 3,512  |  |      | 3,524   |  |   | 3,664   |  | 
|Average natural gas price Mid-continent region ($/MMBtu) |  | $                               | 5.42   |                                | $ | 5.77   |  | $    | 6.08    |  | $ | 6.19    |  | 
|Capital expenditures (Thousands of dollars)              |  | $                               | 43,708 |                                | $ | 18,946 |  | $    | 88,861  |  | $ | 30,576  |  | 

(a) Includes volumes for consolidated entities only.

Operating Results - Net margin decreased $0.9 million and $5.5 million for the three and nine months ended September 30, 2007, respectively, compared with the same periods last year, due to the following:

| |  |  | a decrease of $1.9 million and $6.4 million, respectively, from natural gas transportation revenues as a result of higher fuel costs and lower throughput,
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | a decrease of $0.8 million and $2.3 million, respectively, due to the expiration of the amortization of reimbursements associated with an intrastate natural gas
transportation construction project in Oklahoma, and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | a decrease of $0.3 million and $1.3 million, respectively, due to a reduction in operational natural gas inventory sales, partially offset by
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | an increase of $1.9 million and $4.5 million, respectively, from natural gas storage as a result of new and renegotiated contracts.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------

Operating costs increased $1.4 million and $3.1 million for the three and nine months ended September 30, 2007, respectively, compared with the same periods last
year, primarily due to higher employee-related costs.

During the second quarter of 2006, we sold a 20 percent partnership interest in Northern Border
Pipeline and recorded a gain on sale of approximately $113.9 million.

Equity earnings from investments for the three and nine months ended
September 30, 2007 and 2006, primarily include earnings from our interest in Northern Border Pipeline. The decrease in equity earnings from investments of $10.8 million for the nine months ended September 30, 2007, compared with the same
period last year, is primarily due to the decrease in our share of Northern Border Pipelines earnings from 70 percent in the first quarter of 2006 to 50 percent beginning in the second quarter of 2006. See page 23 for discussion of the
disposition of the 20 percent partnership interest in Northern Border Pipeline.



29



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##### Table of Contents

Minority interest in income of consolidated subsidiaries for the nine months ended September 30, 2006, included the
66-2/3 percent interest in Guardian Pipeline. In April 2006, we acquired 100 percent of Guardian Pipeline, resulting in no minority interest in income of consolidated subsidiaries related to Guardian Pipeline after March 31,
2006.

The increase in capital expenditures for the three and nine months ended September 30, 2007, compared with the same periods last year, is driven
primarily by our capital projects, which are discussed beginning on page 23.

Natural Gas Liquids Gathering and Fractionation

Overview - Our former natural gas liquids segment is now called our Natural Gas Liquids Gathering and Fractionation segment.

The segment primarily gathers, treats and fractionates raw NGLs produced by natural gas processing plants located in Oklahoma, Kansas, the Texas panhandle and the Texas
Gulf Coast, and stores and markets purity NGL products. We connect the NGL production basins in Oklahoma, Kansas and the Texas panhandle with the key NGL market centers in Conway, Kansas, and Mont Belvieu, Texas.

Most natural gas produced at the wellhead contains a mixture of NGL components such as ethane, propane, iso-butane, normal butane and natural gasoline. Natural gas
processing plants remove the NGLs from the natural gas stream to realize the higher economic value of the NGLs and to meet natural gas pipeline quality specifications, which limit NGLs in the natural gas stream due to liquid and Btu content. The
NGLs that are separated from the natural gas stream at the natural gas processing plants remain in a mixed, raw form until they are gathered, primarily by pipeline, and delivered to our fractionators. A fractionator, by applying heat and pressure,
separates the raw NGL stream into marketable products, such as ethane/propane mix, propane, iso-butane, normal butane and natural gasoline (collectively, NGL products). These NGL products are then stored and/or distributed to our customers, such as
petrochemical plants, heating fuel users and motor gasoline manufacturers.

Selected Financial and Operating Information - The following tables set
forth certain selected financial and operating results for our Natural Gas Liquids Gathering and Fractionation segment for the periods indicated.



|                                                                             |  |                                 |           |                                |   |         |  |      |           |  |   |           |  | 
|---------------------------------------------------------------------------- |  | ------------------------------- | --------- | ------------------------------ | - | ------- |  | ---- | --------- |  | - | --------- |  | 
|                                                                             |  | Three Months EndedSeptember 30, |           | Nine Months EndedSeptember 30, |   |        
|Financial Results                                                            |  | 2007                            |           | 2006                           |   | 2007    |  | 2006 |           | 
|                                                                             |  | (Thousands of dollars)          |           |                               
|Natural gas liquids and condensate sales                                     |  | $                               | 1,054,107 |                                | $ | 870,860 |  | $    | 2,847,706 |  | $ | 2,478,056 |  | 
|Storage and fractionation revenue                                            |  |                                 | 65,990    |                                |   | 46,800  |  |      | 200,958   |  |   | 140,552   |  | 
|Cost of sales and fuel                                                       |  |                                 | 1,071,270 |                                |   | 879,744 |  |      | 2,893,369 |  |   | 2,496,405 |  | 
|Net margin                                                                   |  |                                 | 48,827    |                                |   | 37,916  |  |      | 155,295   |  |   | 122,203   |  | 
|Operating costs                                                              |  |                                 | 17,787    |                                |   | 14,300  |  |      | 49,387    |  |   | 41,451    |  | 
|Depreciation and amortization                                                |  |                                 | 6,439     |                                |   | 5,368   |  |      | 17,525    |  |   | 16,134    |  | 
|Gain on sale of assets                                                       |  |                                 | 27        |                                |   | 27      |  |      | 31        |  |   | 38        |  | 
|Operating income                                                             |  | $                               | 24,628    |                                | $ | 18,275  |  | $    | 88,414    |  | $ | 64,656    |  | 
|                                                                            
|                                                                             |  |                                 |          
|                                                                             |  | Three Months EndedSeptember 30, |           | Nine Months EndedSeptember 30, |   |        
|Operating Information                                                        |  | 2007                            |           | 2006                           |   | 2007    |  | 2006 |           | 
|Natural gas liquids gathered (MBbl/d)                                        |  |                                 | 232       |                                |   | 208     |  |      | 222       |  |   | 205       |  | 
|Natural gas liquids sales (MBbl/d)                                           |  |                                 | 223       |                                |   | 201     |  |      | 221       |  |   | 202       |  | 
|Natural gas liquids fractionated (MBbl/d)                                    |  |                                 | 370       |                                |   | 326     |  |      | 346       |  |   | 315       |  | 
|Conway-to-Mont Belvieu OPIS average spread Ethane/Propane mixture ($/gallon) |  | $                               | 0.05      |                                | $ | 0.06    |  | $    | 0.05      |  | $ | 0.04      |  | 
|Capital expenditures (Thousands of dollars)                                  |  | $                               | 20,378    |                                | $ | 6,485   |  | $    | 42,912    |  | $ | 14,462    |  | 

Operating Results - Net margin increased $10.9 million for the three months ended September 30, 2007,
compared with the same period last year, primarily due to the following:

| |  |  | $6.8 million due to higher exchange net margin driven by increased volumes from new supply connections and increased fractionation volumes at our Mont Belvieu
fractionator,
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



30



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##### Table of Contents

| |  |  | $2.6 million in increased optimization margins due to increased marketing volumes from new supply connections, and
| | - |  | ------------------------------------------------------------------------------------------------------------------

| |  |  | $1.5 million due to new storage contracts entered into in the second quarter of 2007 and our acquisition of the Mont Belvieu storage business in the fourth quarter
of 2006.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net margin increased $33.1 million for the nine months ended September 30, 2007, compared with the same period last year,
due to the following:

| |  |  | $13.2 million due to higher exchange net margin primarily driven by increased volumes due to new supply connections, improved natural gas processing economics, and
increased fractionation volumes at our Mont Belvieu fractionator,
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | $13.1 million due to higher product price spreads and higher isomerization price spreads, and
| | - |  | ---------------------------------------------------------------------------------------------

| |  |  | $6.8 million due to new storage contracts entered into in the second quarter of 2007 and our acquisition of the Mont Belvieu storage business in the fourth quarter
of 2006.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Operating costs increased for the three-month period primarily due to higher contract service costs at our storage facilities
and employee-related costs, as well as the acquisition of the Mont Belvieu storage business in the fourth quarter of 2006.

Operating costs increased for
the nine-month period primarily due to higher employee-related costs and general taxes, as well as the acquisition of the Mont Belvieu storage business in the fourth quarter of 2006.

The increase in capital expenditures for the three and nine months ended September 30, 2007, compared with the same periods last year, is driven primarily by our growth activities for new supply connections. See
discussion of our capital projects beginning on page 23.

Natural Gas Liquids Pipelines

Overview - Our Natural Gas Liquids Pipelines segment is comprised of the natural gas liquids assets of our previous pipelines and storage segment.

This segment operates FERC-regulated natural gas liquids gathering and distribution pipelines. Our natural gas liquids gathering pipelines deliver raw NGLs gathered
in Oklahoma, Kansas and the Texas panhandle to our Mid-Continent fractionation facilities in Medford, Oklahoma. Our natural gas liquids distribution pipelines primarily deliver purity NGL products to the NGL market hubs in Conway, Kansas, and Mont
Belvieu, Texas. Through our acquisition of the NGL assets from Kinder Morgan, we acquired terminal and storage facilities as well as natural gas liquids and refined products pipelines that connect our Mid-Continent assets with the Midwest
markets near Chicago, Illinois. We operate more than 4,020 miles of FERC-regulated natural gas liquids gathering and distribution pipelines in Oklahoma, Kansas, Nebraska, Missouri, Iowa, Illinois and Texas. We have terminal and storage
facilities in Missouri, Nebraska, Iowa, and Illinois. We own NGL storage facilities primarily used for operational purposes totaling 978 MBbl.

Operating revenue for this segment is derived from transporting product under our FERC-regulated tariffs. Tariffs specify the rates we can charge our customers and the general terms and conditions for natural gas liquids transportation
service on our pipelines. The FERC also permits natural gas liquids pipelines to adjust rates in accordance with a methodology based on changes in the producer price index for finished goods or to establish rates based on agreements with
unaffiliated shippers. Our tariffs include specifications regarding the receipt and delivery of natural gas liquids at points along the pipeline systems.

Our Natural Gas Liquids Pipelines segments assets consist of the following:

| |  |  | approximately 720 miles of FERC-regulated natural gas liquids gathering pipelines with peak capacity of approximately 93 MBbl/d,
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

| |  |  | approximately 3,300 miles of FERC-regulated natural gas liquids distribution pipelines with peak transportation capacity of 434 MBbl/d,
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------

| |  |  | eight product terminals in Missouri, Nebraska, Iowa and Illinois, and
| | - |  | ---------------------------------------------------------------------

| |  |  | above and below ground storage facilities with 978 MBbl operating capacity.
| | - |  | ---------------------------------------------------------------------------

See Part I, Item 1, Business, for our former pipelines and storage segment in our Annual Report on Form 10-K for the year ended December 31, 2006 for discussion of market condition and
seasonality.



31



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##### Table of Contents

Selected Financial and Operating Information - The following tables set forth certain selected financial and
operating results for our Natural Gas Liquids Pipelines segment for the periods indicated.



|                                                         |  |                                 |         |                                |      |   |        |  |      |         |  |   |        |  | 
|-------------------------------------------------------- |  | ------------------------------- | ------- | ------------------------------ | ---- | - | ------ |  | ---- | ------- |  | - | ------ |  | 
|                                                         |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30, |      |  
|Financial Results                                        |  | 2007                            |         |                                | 2006 |   | 2007   |  | 2006 |         | 
|                                                         |  | (Thousands of dollars)          |         |                               
|Transportation and gathering revenue                     |  | $                               | 19,671  |                                |      | $ | 16,548 |  | $    | 56,181  |  | $ | 49,002 |  | 
|Gas sales and other revenue                              |  |                                 | 1       |                                |      |   | 58     |  |      | 13      |  |   | 62     |  | 
|Cost of sales and fuel                                   |  |                                 | 1,691   |                                |      |   | 1,486  |  |      | 4,261   |  |   | 4,758  |  | 
|Net margin                                               |  |                                 | 17,981  |                                |      |   | 15,120 |  |      | 51,933  |  |   | 44,306 |  | 
|Operating costs                                          |  |                                 | 5,648   |                                |      |   | 4,742  |  |      | 16,551  |  |   | 14,334 |  | 
|Depreciation and amortization                            |  |                                 | 2,987   |                                |      |   | 3,010  |  |      | 8,990   |  |   | 9,047  |  | 
|Gain on sale of assets                                   |  |                                 | 1       |                                |      |   | 2      |  |      | 2       |  |   | 6      |  | 
|Operating income                                         |  | $                               | 9,347   |                                |      | $ | 7,370  |  | $    | 26,394  |  | $ | 20,931 |  | 
|                                                        
|Equity earnings from investments                         |  | $                               | (511    | )                              |      | $ | 104    |  | $    | 182     |  | $ | 248    |  | 
|Minority interest in income of consolidated subsidiaries |  | $                               | 22      |                                |      | $ | -      |  | $    | 22      |  | $ | -      |  | 
|                                                         |  |                                 |        
|                                                         |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30, |      |  
|Operating Information                                    |  | 2007                            |         |                                | 2006 |   | 2007   |  | 2006 |         | 
|Natural gas liquids transported (MBbl/d)                 |  |                                 | 225     |                                |      |   | 199    |  |      | 219     |  |   | 200    |  | 
|Natural gas liquids gathered (MBbl/d)                    |  |                                 | 84      |                                |      |   | 61     |  |      | 78      |  |   | 58     |  | 
|Capital expenditures (Thousands of dollars)              |  | $                               | 102,057 |                                |      | $ | 21,698 |  | $    | 197,975 |  | $ | 32,462 |  | 

Operating Results - Net margin increased $2.9 million and $7.6 million for the three months and nine months
ended September 30, 2007, respectively, compared with the same periods last year, primarily as a result of increased throughput from new supply connections.

Operating costs increased $0.9 million for the three months ended September 30, 2007, compared with the same period last year, due to increased expenditures for materials and outside services, and higher employee-related costs.

Operating costs increased $2.2 million for the nine months ended September 30, 2007, compared with the same period last year, due to higher
employee-related costs and general taxes.

The increase in capital expenditures for the three and nine months ended September 30, 2007, compared with
the same periods last year, is driven primarily by our growth activities. See discussion of our capital projects beginning on page 23.

LIQUIDITY
AND CAPITAL RESOURCES

General - Our principal sources of liquidity include cash generated from operating activities, bank credit facilities,
debt issuances and the sale of limited partner units. We fund our operating expenses, debt service and cash distributions to our limited partners and general partner primarily with operating cash flow.

Part of our growth strategy is to expand our existing businesses and strategically acquire related businesses that strengthen and complement our existing assets. Capital
resources for acquisitions and maintenance and growth expenditures may be funded by a variety of sources, including those listed above as our principal sources of liquidity. Our ability to access capital markets for debt and equity financing under
reasonable terms depends on our financial condition, credit ratings and market conditions. During the three and nine months ended September 30, 2007 and 2006, our capital expenditures were financed through operating cash flows and short- and
long-term debt. Capital expenditures for the first nine months of 2007 were $400.6 million, compared with $114.8 million for the same period in 2006, exclusive of acquisitions. The increase in capital expenditures for 2007 compared with 2006 is
driven primarily by our capital projects, which are discussed beginning on page 23.

We believe that our ability to obtain financing and our history of
consistent cash flow from operating activities provide a solid foundation to meet our future liquidity and capital resource requirements.



32



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Financing - Financing is provided through available cash, our amended and restated revolving credit agreement
(2007 Partnership Credit Agreement) and long-term debt. Other options to obtain financing include, but are not limited to, issuance of limited partner units, issuance of hybrid securities such as any trust preferred security or deferrable interest
subordinated debt issued by us or any business trusts and sale/leaseback of facilities.

The total amount of short-term borrowings authorized by our
general partners Board of Directors is $1.5 billion. At September 30, 2007, we had no letters of credit issued, $365 million in borrowings outstanding under the 2007 Partnership Credit Agreement and available cash of approximately $794.4
million. The $365 million in borrowings was repaid in October 2007. Additionally, we had no borrowings drawn under the $10 million Guardian Pipeline revolving credit agreement. The Guardian Pipeline revolving credit agreement terminates in November
2007. Subsequent to repaying the $365 million in borrowings and closing the Kinder Morgan acquisition, we have approximately $1.0 billion available under our 2007 Partnership Credit Agreement.

In July 2007, we exercised the accordion feature of our 2007 Partnership Credit Agreement to increase the commitment amounts by $250 million to a total of $1.0 billion.

Our 2007 Partnership Credit Agreement and Guardian Pipelines revolving note agreement contain typical covenants as discussed in Note E of the Notes
to Consolidated Financial Statements in this Quarterly Report on Form 10-Q and Note E of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2006. At September 30, 2007, we were
in compliance with all covenants.

Debt Issuance - In September 2007, we completed an underwritten public offering of $600 million aggregate
principal amount of 6.85 percent Senior Notes due 2037. The 2037 Notes were issued under our existing shelf registration statement filed with the SEC. For more information regarding the 2037 Notes, refer to discussion in Note F of the Notes to
Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Equity Issuance - In connection with the ONEOK Transactions, we amended
our Partnership Agreement to provide for the issuance of Class B limited partner units and issued approximately 36.5 million Class B limited partner units to ONEOK. The Class B limited partner units were issued on April 6, 2006. For more
information regarding the Class B units, refer to discussion of the ONEOK Transactions in Note B of the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Capitalization Structure - The following table sets forth our capitalization structure for the periods indicated.



|                               |  |                   |   |  |                  |   |  | 
|------------------------------ |  | ----------------- | - |  | ---------------- | - |  | 
|                               |  | September 30,2007 |   |  | December 31,2006 |   |  | 
|Long-term Debt                 |  | 55                | % |  | 48               | % |  | 
|Equity                         |  | 45                | % |  | 52               | % |  | 
|Debt (including notes payable) |  | 58                | % |  | 48               | % |  | 
|Equity                         |  | 42                | % |  | 52               | % |  | 

Credit Ratings - Our credit ratings as of September 30, 2007, are shown in the table below.



|              |  |        |  |         |  | 
|------------- |  | ------ |  | ------- |  | 
|Rating Agency |  | Rating |  | Outlook |  | 
|Moodys       |  | Baa2   |  | Stable  |  | 
|S&P           |  | BBB    |  | Stable  |  | 

Our credit ratings may be affected by a material change in our financial ratios or a material event affecting our
business. The most common criteria for assessment of our credit ratings are the debt-to-EBITDA ratio, interest coverage, business risk profile and liquidity. If our credit ratings were downgraded, the interest rates on the 2007 Partnership Credit
Agreement borrowings would increase, resulting in an increase in our cost to borrow funds.

Our $250 million and $225 million long-term notes payable, due
2010 and 2011, respectively, contain provisions that require us to offer to repurchase the senior notes at par value if either our Moodys or S&P credit rating falls below investment grade (Baa3 for Moodys and BBB- for S&P) and
the investment grade ratings are not reinstated within a period of 40 days. Further, the indentures governing our senior notes due 2010 and 2011 include an event of default upon acceleration of other indebtedness of $25 million or more and the
indentures governing our senior notes due 2012, 2016, 2036 and 2037 include an event of default upon the acceleration of other indebtedness of $100 million or more that would be triggered by such an offer



33



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to repurchase. Such an event of default would entitle the trustee or the holders of 25 percent in aggregate principal amount of the outstanding senior notes
due 2010, 2011, 2012, 2016, 2036 and 2037 to declare those notes immediately due and payable in full. We may not have sufficient cash on hand to repurchase and repay any accelerated senior notes, which may cause us to borrow money under our credit
facilities or seek alternative financing sources to finance the repurchases and repayment. We could also face difficulties accessing capital or our borrowing costs could increase, impacting our ability to obtain financing for acquisitions or capital
expenditures, to refinance indebtedness and to fulfill our debt obligations. A decline in our credit rating below investment grade may also require us to provide security to our counterparties in the form of cash, letters of credit or other
negotiable instruments.

Other than the note repurchase obligations described above, we have determined that we do not have significant exposure to rating
triggers in various other contracts and equipment leases. Rating triggers are defined as provisions that would create an automatic default or acceleration of indebtedness based on a change in our credit rating. Our credit agreements contain
provisions that would cause the cost to borrow funds to increase if our credit rating is negatively adjusted. An adverse rating change is not defined as a default of our credit agreements.

Capital Expenditures - We classify expenditures that are expected to generate additional revenue or significant operating efficiencies as growth capital
expenditures. Any remaining capital expenditures are classified as maintenance capital expenditures. The following table summarizes our 2007 projected growth and maintenance capital expenditures excluding AFUDC.



|                                                |  |                       |     |             |   |       |  |   |     |  | 
|----------------------------------------------- |  | --------------------- | --- | ----------- | - | ----- |  | - | --- |  | 
|2007 Projected Capital Expenditures             |  | Growth                |     | Maintenance |   | Total |  |  
|                                                |  | (Millions of dollars) |     |            
|Natural Gas Gathering and Processing            |  | $                     | 65  |             | $ | 22    |  | $ | 87  |  | 
|Natural Gas Pipelines                           |  |                       | 109 |             |   | 23    |  |   | 132 |  | 
|Natural Gas Liquids Gathering and Fractionation |  |                       | 127 |             |   | 17    |  |   | 144 |  | 
|Natural Gas Liquids Pipelines                   |  |                       | 448 |             |   | 3     |  |   | 451 |  | 
|Total projected capital expenditures            |  | $                     | 749 |             | $ | 65    |  | $ | 814 |  | 
|                                               

Additional information about these projects is included under Capital Projects beginning on page 23.
Financing for these projects may include borrowings under the 2007 Partnership Credit Agreement.

Cash Distributions - We distribute 100 percent of
our available cash, which generally consists of all cash receipts less adjustments for cash disbursements and net change to reserves, to our general and limited partners. Our income is allocated to our general partner and limited partners according
to their partnership percentages of 2 percent and 98 percent, respectively. The effect of any incremental income allocations for incentive distributions to our general partner is calculated after the income allocation for the general partners
partnership interest and before the income allocation to the limited partners.

We paid $246.2 million and $156.7 million to our common and Class B
unitholders, for the nine months ended September 30, 2007 and 2006, respectively. We also paid our general partner $39.8 million and $16.8 million for its general partner and incentive distribution interests for the nine months ended
September 30, 2007 and 2006, respectively.

The following summarizes our quarterly cash distribution activity for
2007:

| |  |  | In January 2007, we increased our cash distribution to $0.98 per unit for the fourth quarter of 2006, which was paid on February 14, 2007, to unitholders of
record on January 31, 2007.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In April 2007, we increased our cash distribution to $0.99 per unit for the first quarter of 2007. The distribution was paid on May 14, 2007, to unitholders of
record as of April 30, 2007.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In July 2007, we increased our cash distribution to $1.00 per unit for the second quarter of 2007. The distribution was paid on August 14, 2007, to unitholders
of record on July 31, 2007.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In October 2007, we increased our cash distribution to $1.01 per unit ($4.04 per unit on an annualized basis) for the third quarter of 2007. The distribution will
be paid on November 14, 2007, to unitholders of record on October 31, 2007.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ENVIRONMENTAL LIABILITIES

We are subject to multiple environmental laws and regulations affecting many aspects of our present and future operations, including air emissions, water quality,
wastewater discharges, solid wastes and hazardous material and substance management. These laws and regulations generally require us to obtain and comply with a wide variety of environmental



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registrations, licenses, permits, inspections and other approvals. Failure to comply with these laws, regulations, permits and licenses may expose us to
fines, penalties and/or interruptions in our operations that could be material to our results of operations. If an accidental leak or spill of hazardous materials occurs from our pipelines or facilities, in the process of transporting natural gas or
NGLs, or at any facility that we own, operate or otherwise use, we could be held jointly and severally liable for all resulting liabilities, including investigation and clean-up costs, which could materially affect our results of operations and cash
flows. In addition, emission controls required under the federal Clean Air Act and other similar federal and state laws could require unexpected capital expenditures at our facilities. We cannot assure that existing environmental regulations will
not be revised or that new regulations will not be adopted or become applicable to us. Revised or additional regulations that result in increased compliance costs or additional operating restrictions, particularly if those costs are not fully
recoverable from customers, could have a material adverse effect on our business, financial condition and results of operations.

Our expenditures for
environmental evaluation and remediation to date have not been significant in relation to our results of operations, and there were no material effects upon earnings during the three and nine months ended September 30, 2007 or 2006 related to
compliance with environmental regulations.

CASH FLOW ANALYSIS

Operating Cash Flows - Operating cash flows increased by $83.3 million for the nine months ended September 30, 2007, compared with the same period in 2006, primarily as a result of changes in the components of working capital.
These changes increased operating cash flows by $152.0 million, compared with an increase of $69.0 million for the same period last year, primarily due to increases in accounts payable, partially offset by increases in accounts receivable. Operating
cash flows also increased due to a decrease in income taxes as a result of our consolidation of the ONEOK Energy Assets, as of January 1, 2006, which were previously owned by a taxable entity.

Investing Cash Flows - Cash used in investing activities was $402.2 million for the nine months ended September 30, 2007, compared with $1.2 billion for the
same period last year.

The decreased use of cash for the nine months ended September 30, 2007, was primarily related to the April 2006 purchase of
the ONEOK Energy Assets, which included a cash payment of approximately $1.35 billion, and the acquisition of the 66-2/3 percent interest in Guardian Pipeline not previously owned by us for approximately $77 million. These decreases were offset by
the sale of a 20 percent partnership interest in Northern Border Pipeline for approximately $297 million in 2006 and by increased capital expenditures of $285.8 million for the nine-month period in 2007 due to our capital projects. See page 23 for
discussion of our capital projects.

Investing cash flows for 2006 also included the impact of the deconsolidation of Northern Border Pipeline and the
consolidation of the ONEOK Energy Assets and Guardian Pipeline.

Financing Cash Flows - Cash used in financing activities was $656.8 million in
2007, compared with $790.4 million for the same period last year.

During the third quarter of 2007, we completed an underwritten public offering of senior
notes totaling $598 million in net proceeds, before offering expenses, which were partially used to finance the acquisition of an interstate natural gas liquids and refined petroleum products pipeline system and related assets from a subsidiary of
Kinder Morgan in October 2007.

During the third quarter of 2006, we completed the underwritten public offering of senior notes totaling $1.4 billion in
net proceeds, before offering expenses. The use of these proceeds is discussed below.

We had net borrowings of approximately $359.0 million in the first
nine months of 2007, compared with net payments of $202.0 million in the same period in 2006.

| |  |  | During 2007, the activity reflects borrowings to fund our capital program. In October 2007, we repaid our short-term borrowings using a portion of the proceeds from
the senior notes issued in 2007.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | During the second quarter of 2006, we borrowed $1.05 billion under our Bridge Facility to finance a portion of the acquisition of the ONEOK Energy Assets and $77
million under our revolving credit agreement to acquire the 66-2/3 percent interest in Guardian Pipeline. In the third quarter of 2006, the net proceeds from the senior notes issued in 2006 discussed above were used to repay all of the amounts
outstanding under our Bridge Facility, and to repay $335 million of short-term debt.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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We reported cash flows retained by ONEOK of $177.5 million in 2006, which represented the cash flows generated during the
first quarter of 2006 by the ONEOK Energy Assets prior to the ONEOK Transactions.

In March 2006, we borrowed $33 million under our amended and restated
five-year revolving credit agreement to redeem all of the outstanding Viking Gas Transmission Series A, B, C and D senior notes and paid a redemption premium of $3.6 million.

Cash distributions to our general and limited partners for 2007 were $286.0 million, compared with $173.5 million in the same period in 2006, an increase of $112.5 million, primarily due to the additional units that
were issued to complete the ONEOK Transactions. We paid cash distributions of $2.97 per unit for the first nine months of 2007, compared with $2.63 per unit paid in the same period in 2006.

FORWARD-LOOKING STATEMENTS

Some of the statements contained and
incorporated in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements relate to our anticipated financial performance,
managements plans and objectives for our future operations, our business prospects, the outcome of regulatory and legal proceedings, market conditions and other matters. The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements in certain circumstances. The following discussion is intended to identify important factors that could cause future outcomes to differ materially from those set forth in the forward-looking statements.

Forward-looking statements include the items identified in the preceding paragraph, the information concerning possible or assumed future results of our
operations and other statements contained or incorporated in this Quarterly Report on Form 10-Q identified by words such as anticipate, estimate, expect, project, intend, plan,
believe, should, goal, forecast and other words and terms of similar meaning.

You should not place undue
reliance on forward-looking statements. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or
implied by forward-looking statements. Those factors may affect our operations, markets, products, services and prices. In addition to any assumptions and other factors referred to specifically in connection with the forward-looking statements,
factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement include, among others, the following:

| |  |  | the effects of weather and other natural phenomena on our operations, demand for our services and energy prices;
| | - |  | ----------------------------------------------------------------------------------------------------------------

| |  |  | competition from other United States and Canadian energy suppliers and transporters as well as alternative forms of energy;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------

| |  |  | the capital intensive nature of our businesses;
| | - |  | -----------------------------------------------

| |  |  | the timing and extent of changes in commodity prices for natural gas, NGLs, electricity and crude oil;
| | - |  | ------------------------------------------------------------------------------------------------------

| |  |  | impact on drilling and production by factors beyond our control, including the demand for natural gas and refinery-grade crude oil; producers desire and
ability to obtain necessary permits; reserve performance; and capacity constraints on the pipelines that transport crude oil, natural gas and NGLs from producing areas and our facilities;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | risks of trading and hedging activities as a result of changes in energy prices or the financial condition of our counterparties;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------

| |  |  | the timely receipt of approval by applicable governmental entities for construction and operation of our pipeline projects and other projects and required
regulatory clearances;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | our ability to acquire all necessary rights-of-way permits and consents in a timely manner, to promptly obtain all necessary materials and supplies required for
construction, and to construct pipelines without labor or contractor problems;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | our ability to control construction costs and completion schedules of our pipeline projects and other projects;
| | - |  | ---------------------------------------------------------------------------------------------------------------

| |  |  | the ability to market pipeline capacity on favorable terms;
| | - |  | -----------------------------------------------------------

| |  |  | risks associated with adequate supply to our gathering, processing, fractionation and pipeline facilities, including production declines that outpace new drilling;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | the mechanical integrity of facilities operated;
| | - |  | ------------------------------------------------

| |  |  | the effects of changes in governmental policies and regulatory actions, including changes with respect to income and other taxes, environmental compliance,
authorized rates or recovery of gas costs;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | changes in demand for the use of natural gas because of market conditions caused by concerns about global warming or changes in governmental policies and
regulations due to climate change initiatives;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | the results of administrative proceedings and litigation, regulatory actions and receipt of expected clearances involving regulatory authorities or any other local,
state or federal regulatory body, including the FERC;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | actions by rating agencies concerning our credit ratings;
| | - |  | ---------------------------------------------------------

| |  |  | the impact of unforeseen changes in interest rates, equity markets, inflation rates, economic recession and other external factors over which we have no control;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | our ability to access capital at competitive rates or on terms acceptable to us;
| | - |  | --------------------------------------------------------------------------------

| |  |  | demand for our services in the proximity of our facilities;
| | - |  | -----------------------------------------------------------

| |  |  | the profitability of assets or businesses acquired by us;
| | - |  | ---------------------------------------------------------

| |  |  | the risk that material weaknesses or significant deficiencies in our internal control over financial reporting could emerge or that minor problems could become
significant;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | the impact and outcome of pending and future litigation;
| | - |  | --------------------------------------------------------

| |  |  | performance of contractual obligations by our customers;
| | - |  | --------------------------------------------------------

| |  |  | the uncertainty of estimates, including accruals and costs of environmental remediation;
| | - |  | ----------------------------------------------------------------------------------------

| |  |  | our ability to control operating costs; and
| | - |  | -------------------------------------------

| |  |  | acts of nature, sabotage, terrorism or other similar acts that cause damage to our facilities or our suppliers or shippers facilities.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------

These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed
in any of our forward-looking statements. Other factors could also have material adverse effects on our future results. These and other risks are described in greater detail under Part I, Item 1A, Risk Factors, in our Annual Report
on Form 10-K for the year ended December 31, 2006, and in this Quarterly Report on Form 10-Q. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Other
than as required under securities laws, we undertake no obligation to update publicly any forward-looking statement whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Our
quantitative and qualitative disclosures about market risk are consistent with those discussed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended
December 31, 2006.

INTEREST RATE RISK

General - We are subject to the risk of interest rate fluctuation in the normal course of business. We manage interest rate risk through the use of fixed-rate debt, floating-rate debt and, at times, interest-rate swaps. Fixed-rate
swaps are used to reduce our risk of increased interest costs during periods of rising interest rates. Floating-rate swaps are used to convert the fixed rates of long-term borrowings into short-term variable rates. At September 30, 2007, the
interest rate on 94.3 percent of our long-term debt was fixed after considering the impact of interest-rate swaps.

At September 30, 2007, a 100 basis
point move in the annual interest rate on our variable-rate long-term debt would have changed our annual interest expense by $1.5 million. This 100 basis point change assumes a parallel shift in the yield curve. If interest rates changed
significantly, we would take actions to manage our exposure to the change. Since a specific action and the possible effects are uncertain, no change has been assumed.

Fair Value Hedges - See Note C of the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q for discussion of the impact of interest-rate swaps and net interest expense savings from
terminated swaps.

Total swap savings from the interest-rate swaps and amortization of terminated swaps was $1.8 million for the nine months ended
September 30, 2007. The swaps are expected to net the following savings for the remainder of the year:

| |  |  | interest expense savings of $0.9 million related to the amortization of the swap value at termination, less
| | - |  | -----------------------------------------------------------------------------------------------------------

| |  |  | approximately $0.2 million in interest expense from the existing $150 million of swapped debt, based on LIBOR rates at September 30, 2007.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

Total net swap savings for 2007 are expected to be $2.5 million, compared with the savings of $2.0
million in 2006.



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COMMODITY PRICE RISK

Our Natural Gas Gathering and Processing segment is exposed to commodity price risk, primarily NGLs, as a result of receiving commodities in exchange for our services. To a lesser extent, exposures arise from the relative price differential
between natural gas and NGLs, or the gross processing spread, with respect to our keep-whole processing contracts and the risk of price fluctuations and the cost of intervening transportation at various market locations. We use commodity fixed-price
physical forwards and derivative contracts, including NYMEX-based futures and over-the-counter swaps, to minimize earnings volatility related to natural gas, NGL and condensate price fluctuations.

We reduce our gross processing spread exposure through a combination of physical and financial hedges. We utilize a portion of our POP equity natural gas as an offset,
or natural hedge, to an equivalent portion of our keep-whole shrink requirements. This has the effect of converting our gross processing spread risk to NGL commodity price risk and we then use financial instruments to hedge the sale of NGLs. Through
this combination of physical and financial hedges, we have reduced our gross processing spread exposure by an additional 4,439 MMBtu/d for the remainder of 2007. We have hedged 1,354 Bbl/d of NGLs at an average price of $0.80 per gallon in 2007.

The following tables set forth our Natural Gas Gathering and Processing segments hedging information for the remainder of 2007 and for the year
ending December 31, 2008.



|                                                                |  |                                       |  |    |   |  |                       |      |  |               |   |  |    |   |  | 
|--------------------------------------------------------------- |  | ------------------------------------- |  | -- | - |  | --------------------- | ---- |  | ------------- | - |  | -- | - |  | 
|                                                                |  | Three Months Ending December 31, 2007
|Nature of Exposure                                              |  | VolumesHedged                         |  |    |   |  | Average PricePer Unit |      |  | VolumesHedged |   |  |   
|Commodity Risk                                                  |  |                                       |  |    |   |  |                       |      |  |               |   |  |    |   |  | 
|Natural gas liquids (Bbl/d)(a)                                  |  | 2,664                                 |  |    |   |  | $                     | 0.85 |  | ($/gallon     | ) |  | 40 | % |  | 
|Spread Risk                                                     |  |                                       |  |    |   |  |                       |      |  |               |   |  |    |   |  | 
|Gross processing spread (MMBtu/d)(a)                            |  | 6,386                                 |  |    |   |  | $                     | 3.18 |  | ($/MMBtu      | ) |  | 28 | % |  | 
|Natural gas liquids (Bbl/d)(a)                                  |  | 1,354                                 |  | (b | ) |  | $                     | 0.80 |  | ($/gallon     | ) |  | 20 | % |  | 
|(a) Hedged with fixed-priced swaps (b) 4,439 MMBtu/d equivalent |  |                                       |  |    |   |  |                       |      |  |               |   |  |    |   |  | 



|                                  |  |                               |  |  |  |                       |      |  |               |   |  |   |   |  | 
|--------------------------------- |  | ----------------------------- |  |  |  | --------------------- | ---- |  | ------------- | - |  | - | - |  | 
|                                  |  | Year Ending December 31, 2008
|                                  |  | VolumesHedged                 |  |  |  | Average PricePer Unit |      |  | VolumesHedged |   |  |  
|Natural gas liquids (Bbl/d)(a)    |  | 1,062                         |  |  |  | $                     | 0.85 |  | ($/gallon     | ) |  | 9 | % |  | 
|(a) Hedged with fixed-price swaps |  |                               |  |  |  |                       |      |  |               |   |  |   |   |  | 

Our commodity price risk is estimated as a hypothetical change in the price of NGLs, crude oil and natural gas at
September 30, 2007, excluding the effects of hedging and assuming normal operating conditions. Our condensate sales are based on the price of crude oil. We estimate the following:

| |  |  | a $0.01 per gallon increase in the composite price of NGLs would increase annual net margin by approximately $1.7 million,
| | - |  | --------------------------------------------------------------------------------------------------------------------------

| |  |  | a $1.00 per barrel increase in the price of crude oil would increase annual net margin by approximately $0.5 million, and
| | - |  | -------------------------------------------------------------------------------------------------------------------------

| |  |  | a $0.10 per MMBtu increase in the price of natural gas would increase annual net margin by approximately $0.4 million.
| | - |  | ----------------------------------------------------------------------------------------------------------------------

The above estimates of commodity price risk do not include any effects on demand for our services that might be caused by, or arise in conjunction with, price changes.
For example, a change in the gross processing spread may cause ethane to be sold in the natural gas stream, impacting gathering and processing margins, NGL exchange margins, natural gas deliveries and NGL volumes shipped.

Our Natural Gas Liquids Gathering and Fractionation segment is exposed to commodity price risk primarily as a result of NGLs in storage, spread risk associated with the
relative values of the various components of the NGL stream and the relative value of NGL purchases at one location and sales at another location, known as basis risk. We have not entered into any hedges with respect to our NGL marketing activities.



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Our Natural Gas Pipelines segment is exposed to commodity price risk because our intrastate and interstate natural gas
pipelines collect natural gas from their customers for operations or as part of their fee for services provided. When the amount of natural gas consumed in operations by these pipelines differs from the amount provided by their customers, the
pipelines must buy or sell natural gas, store or use natural gas from inventory, and are exposed to commodity price risk. At September 30, 2007, there were no hedges in place with respect to natural gas price risk from our intrastate and
interstate natural gas pipeline operations.

See Note C of the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q for more
information on our hedging activities.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Quarterly Evaluation of Disclosure
Controls and Procedures - As of the end of the period covered by this report, our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) of ONEOK Partners GP, our general partner,
evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management of ONEOK Partners GP, including the officers of ONEOK Partners GP who are the equivalent of our
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on their evaluation, they concluded that as of September 30, 2007, our disclosure controls and procedures were
effective in ensuring that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms.

Changes in Internal Control Over Financial Reporting - We have not made any changes in our internal control over financial reporting (as defined in
Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the third quarter ended September 30, 2007, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

Additional information about our legal
proceedings is included under Part I, Item 3, Legal Proceedings, in our Annual Report on Form 10-K for the year ended December 31, 2006 and under Part II, Item I, Legal Proceedings, in our Quarterly Reports on Form
10-Q for the three months ended March 31, 2007, and the three months ended June 30, 2007.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

Our investors should consider the risks set forth in
Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2006, that could affect us and our business. Although we have tried to discuss key factors, our investors need to be aware that
other risks may prove to be important in the future. New risks may emerge at any time and we cannot predict such risks or estimate the extent to which they may affect our financial performance. Investors should carefully consider the discussion of
risks and the other information included or incorporated by reference in this Quarterly Report on Form 10-Q, including Forward-Looking Statements, which are included in Part I, Item 2, Managements Discussion and Analysis of
Financial Condition and Results of Operations.

We have adopted certain valuation methodologies that may result in a shift of income, gain, loss
and deduction between the general partner and the unitholders. The Internal Revenue Service (IRS) may challenge this treatment, which could adversely affect the value of our limited partner units.

When we issue additional units or engage in certain other transactions, we determine the fair market value of our assets and allocate any unrealized gain or loss
attributable to our assets to the capital accounts of our unitholders and our general partner. Our methodology may be viewed as understating the value of our assets. In that case, there may be a shift of income, gain, loss and deduction between
certain unitholders and the general partner, which may be unfavorable to such unitholders. Moreover, under our current valuation methods, subsequent purchasers of common units may have a greater portion of their Internal Revenue Code
Section 743(b) adjustment allocated to our tangible assets and a lesser portion allocated to our intangible assets. The IRS may challenge our valuation methods, or our allocation of the Section 743(b)



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adjustment attributable to our tangible and intangible assets, and allocations of income, gain, loss and deduction between the general partner and certain of
our unitholders.

A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income or loss being allocated to
our unitholders. It also could affect the amount of gain from our unitholders sale of common units and could have a negative impact on the value of the common units or result in audit adjustments to our unitholders tax returns without
the benefit of additional deductions.

Our treatment of a purchaser of common units as having the same tax benefits as the seller could be challenged,
resulting in a reduction in value of the common units.

Because we cannot match transferors and transferees of common units, we are required to
maintain the uniformity of the economic and tax characteristics of these units in the hands of the purchasers and sellers of these units. We do so by adopting certain depreciation conventions that do not conform to all aspects of the United States
Treasury regulations. An IRS challenge to these conventions could adversely affect the tax benefits to a unitholder of ownership of the common units and could have a negative impact on their value or result in audit adjustments to our
unitholders tax returns.



|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

Not Applicable.



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

Not Applicable.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

Not Applicable.



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

Not Applicable.



|ITEM 6. | EXHIBITS
|------- | --------

The following exhibits
are filed as part of this Quarterly Report on Form 10-Q:



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                       
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                                                   
|4.1         |  | Fourth Supplemental Indenture, dated as of September 28, 2007, among ONEOK Partners, L.P., ONEOK Partners Intermediate Limited Partnership and Wells Fargo Bank, N.A., as trustee, with respect
to the 6.85 percent Senior Notes due 2037 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, filed by ONEOK Partners, L.P. on September 28, 2007 (File No. 1-12202)).                       
|            | 
|4.2         |  | Form of Senior Note due 2037 (included in Exhibit 4.1 above).                                                                                                                                                                                                                                                                                                                                                         
|            | 
|10.1        |  | Underwriting Agreement, dated September 25, 2007, among ONEOK Partners, L.P. and ONEOK Partners Intermediate Limited Partnership and Wachovia Capital Markets LLC, Greenwich Capital Markets,
Inc., and UBS Securities LLC, as representatives of the several underwriters named therein (incorporated by reference to Exhibit 1.1 to ONEOK Partners, L.P.s Form 8-K filed on September 28, 2007 (File No. 1-12202)).
|            | 
|31.1        |  | Certification of John W. Gibson pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                            
|            | 
|31.2        |  | Certification of Curtis L. Dinan pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                           
|            | 
|32.1        |  | Certification of John W. Gibson pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished only pursuant to Rule
13a-14(b)).                                                                                                                                                                                                                                  



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|     |  |                                                                                                                                                                                      
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|32.2 |  | Certification of Curtis L. Dinan pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished only pursuant to Rule
13a-14(b)).



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.



|                       |  |  |  |                      |  |     |  |                                                |  |                                      
|---------------------- |  |  |  | -------------------- |  | --- |  | ---------------------------------------------- |  | -------------------------------------
|                       |  |  |  | ONEOK PARTNERS, L.P.
|                       |  |  |  |                      |  | By: |  | ONEOK Partners GP, L.L.C., its General Partner
|                       |  |  |  |                     
|Date: November 2, 2007 |  |  |  |                      |  | By: |  | /s/ Curtis L. Dinan                           
|                       |  |  |  |                      |  |     |  |                                                |  | Curtis L. Dinan                      
|                       |  |  |  |                      |  |     |  |                                                |  | Senior Vice President,               
|                       |  |  |  |                      |  |     |  |                                                |  | Chief Financial Officer and Treasurer
|                       |  |  |  |                      |  |     |  |                                                |  | (Signing on behalf of the Registrant 
|                       |  |  |  |                      |  |     |  |                                                |  | and as Principal Financial Officer)  



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