SEGMENTS

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

SEGMENTS

N. SEGMENTS

Segment Descriptions - Our reportable business segments are based upon the segments of ONEOK Partners, which include the following:

• the Natural Gas Gathering and Processing segment gathers, treats and processes natural gas;

• the Natural Gas Liquids segment gathers, treats, fractionates and transports NGLs and stores, markets and distributes NGL products; and

• the Natural Gas Pipelines segment operates regulated interstate and intrastate natural gas transmission pipelines and natural gas storage facilities.

Change in Reportable Segments - On January 31, 2014, we completed the separation of our former natural gas distribution business into a stand-alone publicly traded company called ONE Gas. ONE Gas consists of our former Natural Gas Distribution segment. On March 31, 2014, we completed the accelerated wind down of our Energy Services segment. These former segments are included in discontinued operations for all periods presented. See Notes A and B for additional information.

Following the separation of our natural gas distribution business into ONE Gas and wind down of our energy services business, our chief operating decision maker reviews the financial performance of each of the three businesses of ONEOK Partners on a regular basis to assess the performance of, and allocate resources to, ONEOK Partners. As a result, effective for the first quarter 2014, our reportable segments have changed to reflect the three business segments of ONEOK Partners. Prior periods presented have been recast to conform to the current presentation.

Accounting Policies - We evaluate performance based principally on each segment’s operating income and equity earnings. The accounting policies of the segments are described in Note A of the Notes to Consolidated Financial Statements in our Annual Report.  Affiliate and intersegment sales are recorded on the same basis as sales to unaffiliated customers.  Net margin is comprised of total revenues less cost of sales and fuel.  Cost of sales and fuel includes commodity purchases, fuel, storage and transportation costs. Revenues from sales and services provided by ONEOK Partners to our former natural gas distribution business, which were previously disclosed as intersegment revenues and eliminated in consolidation, are now reported as third-party revenues.

Customers - The primary customers of the Natural Gas Gathering and Processing segment are major and independent crude oil and natural gas production companies.  The Natural Gas Liquids segment’s customers are primarily NGL and natural gas gathering and processing companies, major and independent crude oil and natural gas production companies, propane distributors, ethanol producers and petrochemical, refining and NGL marketing companies. The Natural Gas Pipelines segment’s customers include natural gas distribution, electric-generation, natural gas marketing, industrial and major and independent crude oil and natural gas production companies.

For the three and nine months ended September 30, 2014 and 2013, ONEOK Partners had no single customer from which it received 10 percent or more of consolidated revenues.

Operating Segment Information - The following tables set forth certain selected financial information for our and ONEOK Partners’ operating segments for the periods indicated:

Three Months Ended	Natural Gas Gathering and Processing			Natural Gas Liquids (a)			Natural Gas Pipelines (b)		Other and Eliminations			Total
September 30, 2014
	(Thousands of dollars)
Sales to unaffiliated customers	$	374,403		$	2,667,939		$	77,027	$	776		$	3,120,145
Intersegment revenues	403,399			66,581			2,133		(472,113		)	—
Total revenues	$	777,802		$	2,734,520		$	79,160	$	(471,337	)	$	3,120,145
Net margin	$	178,171		$	282,963		$	73,399	$	2,408		$	536,941
Operating costs	64,279			76,946			27,998		3,272			172,495
Depreciation and amortization	31,327			31,661			10,913		687			74,588
Gain (loss) on sale of assets	324			(535		)	1,746		(1		)	1,534
Operating income	$	82,889		$	173,821		$	36,234	$	(1,552	)	$	291,392
Equity earnings (loss) from investments	$	(71,069	)	$	4,351		$	14,371	$	—		$	(52,347	)
Capital expenditures	$	214,917		$	153,785		$	10,650	$	2,833		$	382,185

(a) - The Natural Gas Liquids segment has regulated and nonregulated operations. The Natural Gas Liquids segment’s regulated operations had revenues of $190.3 million, of which $170.1 million was related to sales within the segment, net margin of $94.3 million and operating income of $46.4 million.

(b) - The Natural Gas Pipelines segment has regulated and nonregulated operations. The Natural Gas Pipelines segment’s regulated operations had revenues of $65.2 million, net margin of $57.4 million and operating income of $23.4 million.

Three Months Ended	Natural Gas Gathering and Processing		Natural Gas Liquids (a)		Natural Gas Pipelines (b)			Other and Eliminations (c)			Total
September 30, 2013
	(Thousands of dollars)
Sales to unaffiliated customers	$	162,677	$	2,840,108	$	50,624		$	648		$	3,054,057
Sales to affiliated customers	57,400		—		23,924			—			81,324
Intersegment revenues	312,940		34,740		1,330			(349,010		)	—
Total revenues	$	533,017	$	2,874,848	$	75,878		$	(348,362	)	$	3,135,381
Net margin	$	130,882	$	226,242	$	69,457		$	(2,359	)	$	424,222
Operating costs	45,074		57,010		23,457			5,460			131,001
Depreciation and amortization	27,356		22,993		10,833			668			61,850
Gain (loss) on sale of assets	31		7		(16		)	(1		)	21
Operating income	$	58,483	$	146,246	$	35,151		$	(8,488	)	$	231,392
Equity earnings from investments	$	4,668	$	6,336	$	16,464		$	—		$	27,468
Capital expenditures	$	204,542	$	230,780	$	11,148		$	91,017		$	537,487

(a) - The Natural Gas Liquids segment has regulated and nonregulated operations. The Natural Gas Liquids segment’s regulated operations had revenues of $147.1 million, of which $130.2 million was related to sales within the segment, net margin of $89.5 million and operating income of $53.4 million.

(b) - The Natural Gas Pipelines segment has regulated and nonregulated operations. The Natural Gas Pipelines segment’s regulated operations had revenues of $57.5 million, net margin of $52.8 million and operating income of $22.6 million.

(c) - Other and Eliminations includes capital expenditures of discontinued operations of $83.8 million.

Nine Months Ended	Natural Gas Gathering and Processing			Natural Gas Liquids (a)			Natural Gas Pipelines (b)		Other and Eliminations (c)			Total
September 30, 2014
	(Thousands of dollars)
Sales to unaffiliated customers	$	1,095,531		$	7,950,930		$	247,420	$	2,916		$	9,296,797
Sales to affiliated customers	41,214			—			12,312		—			53,526
Intersegment revenues	1,126,547			160,712			6,206		(1,293,465		)	—
Total revenues	$	2,263,292		$	8,111,642		$	265,938	$	(1,290,549	)	$	9,350,323
Net margin	$	486,695		$	818,086		$	242,359	$	(4,092	)	$	1,543,048
Operating costs	188,489			218,129			82,747		4,263			493,628
Depreciation and amortization	89,612			89,848			32,623		2,046			214,129
Gain (loss) on sale of assets	277			(572		)	1,663		165			1,533
Operating income	$	208,871		$	509,537		$	128,652	$	(10,236	)	$	836,824
Equity earnings (loss) from investments	$	(60,484	)	$	13,574		$	53,657	$	—		$	6,747
Investments in unconsolidated affiliates	$	253,930		$	484,238		$	390,341	$	—		$	1,128,509
Total assets	$	4,415,814		$	7,337,688		$	1,832,368	$	726,326		$	14,312,196
Noncontrolling interests in consolidated subsidiaries	$	4,394		$	—		$	—	$	3,131,769		$	3,136,163
Capital expenditures	$	506,016		$	637,524		$	25,987	$	34,859		$	1,204,386

(a) - The Natural Gas Liquids segment has regulated and nonregulated operations. The Natural Gas Liquids segment’s regulated operations had revenues of $479.4 million, of which $417.0 million was related to sales within the segment, net margin of $263.4 million and operating income of $126.0 million.

(b) - The Natural Gas Pipelines segment has regulated and nonregulated operations. The Natural Gas Pipelines segment’s regulated operations had revenues of $214.8 million, net margin of $185.5 million and operating income of $84.6 million.

(c) - Other and Eliminations includes assets and capital expenditures of discontinued operations of $84.2 million and $23.9 million, respectively.

Nine Months Ended	Natural Gas Gathering and Processing		Natural Gas Liquids (a)		Natural Gas Pipelines (b)			Other and Eliminations (c)			Total
September 30, 2013
	(Thousands of dollars)
Sales to unaffiliated customers	$	466,631	$	7,539,470	$	158,960		$	1,961		$	8,167,022
Sales to affiliated customers	179,636		—		75,662			—			255,298
Intersegment revenues	806,523		91,161		2,327			(900,011		)	—
Total revenues	$	1,452,790	$	7,630,631	$	236,949		$	(898,050	)	$	8,422,320
Net margin	$	365,436	$	632,087	$	211,224		$	(660	)	$	1,208,087
Operating costs	141,737		171,076		75,608			9,480			397,901
Depreciation and amortization	76,366		65,033		32,687			1,930			176,016
Gain (loss) on sale of assets	344		10		(12		)	(1		)	341
Operating income	$	147,677	$	395,988	$	102,917		$	(12,071	)	$	634,511
Equity earnings from investments	$	16,228	$	15,383	$	48,133		$	—		$	79,744
Investments in unconsolidated affiliates	$	331,124	$	494,702	$	376,047		$	—		$	1,201,873
Total assets	$	3,808,135	$	6,610,205	$	1,786,413		$	5,405,590		$	17,610,343
Noncontrolling interests in consolidated subsidiaries	$	4,574	$	—	$	—		$	2,496,378		$	2,500,952
Capital expenditures	$	574,509	$	774,284	$	22,497		$	226,530		$	1,597,820

(a) - The Natural Gas Liquids segment has regulated and nonregulated operations. The Natural Gas Liquids segment’s regulated operations had revenues of $376.9 million, of which $321.3 million was related to sales within the segment, net margin of $227.8 million and operating income of $129.0 million.

(b) - The Natural Gas Pipelines segment has regulated and nonregulated operations. The Natural Gas Pipelines segment’s regulated operations had revenues of $182.0 million, net margin of $162.5 million and operating income of $67.0 million.

(c) - Other and Eliminations includes assets and capital expenditures of discontinued operations of $4.0 billion and $206.4 million, respectively.