2001 ANNUAL REPORT (FORM 10-K)

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(We learn from their examples. We celebrate success.)

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2 Shareholders Letter

6 The Market SwingLearn how ONEOK softens the blows of a volatile market.

10 Bragging RightsExamine the story of ONEOK’s 2001 victories.

16 Desire and PerformanceUnderstand where ONEOK is headed and why.

20 Officers and Directors

21 Form 10-K

2001 Financial HighlightsPercent

Incr. Year Ended December 31 2001 2000 (Decr.)

Consolidated Financial Information ($000)Operating revenues $ 6,803,146 $ 6,642,858 2%Operating income $ 295,232 $ 333,933 (12%)Net income $ 101,565 $ 145,607 (30%)Capital expenditures $ 341,567 $ 311,403 10%Number of employees at year end 3,657 3,664 —

Common Stock DataShares outstanding at year end 60,002,218 59,176,550 1%Data per common share

Earnings - diluted $ 0.85 $ 1.23 (31%)Dividends paid $ 0.62 $ 0.62 —Book value at year end $ 12.65 $ 12.32 3%Market price range

High $ 24.34 $ 25.28 (4%)Low $ 14.17 $ 10.88 30%

Market price at year end $ 17.84 $ 24.07 (26%)Return on common equity 14.9% 23.3% (36%)

Business Segments ($000)Operating income

Marketing and trading $ 71,344 $ 51,274 39%Gathering and processing 43,567 110,819 (61%)Transportation and storage 57,657 62,158 (7%)Distribution 54,097 97,931 (45%)Production 57,939 15,243 280%Power 3,486 — 100%Other 7,142 (3,492) 305%

Total $ 295,232 $ 333,933 (12%)

Forward-looking Statements. Certain matters discussed in this report, excluding historical information, include forward-looking statements. Although ONEOK, Inc. believes suchforward-looking statements are based on reasonable assumptions, no assurance can be given that each statement about the future will be realized. Such statements are made in relianceon the “safe harbor” protections provided under the Private Securities Litigation Reform Act of 1995. For more detail, see page 33 of the Form 10-K.

CO N T E N T S

ONEOK is a diversified energy company. • Founded in 1906 as an intrastate pipeline business.• Markets and trades energy commodities, including wholesale electricity.• Involved in all aspects of the natural gas industry.• Listed on the New York Stock Exchange under the symbol OKE.

Enthusiasm was high when I wrote to you one year ago. ONEOK’s earnings wereimpressive, new midstream assets were in place and prospects for 2001 were very bright.Now a full 12 months later, it would be fair to say that the year didn’t exactly goaccording to plan. ONEOK remains strong and profitable, but 2001 certainly was not a bell ringer. Our diluted earnings per share were 85 cents, down 30.9 percent fromone year ago.

What happened? A frustrating assortment of extraordinary events — someindustry driven — nipped away at ONEOK’s earnings potential. Natural gas pricesdropped to $1.83 per MMBtu, compared with a high of $9.98 per MMBtu in January2001. The U.S. settled into its first broad-reaching economic recession in more than a decade. Oklahoma Natural Gas was denied recovery of $34.6 million for gas costsincurred during winter 2000-2001. Enron, the world’s largest buyer and seller of natural gas, collapsed, leaving ONEOK and other energy marketers dangling.

Several of these situations, such as gas pricing and the recession, are cyclical in nature and already are improving. The Enron demise, however, is a black eye forthe energy industry.

“Enron-itis”In 15 years, Enron grew into the seventh-largest company in America. Now the worldis learning that the innovative powerhouse was built upon an elaborate scheme ofpyramid-like transactions. Every company in the nation with natural gas marketingoperations, including ONEOK, was hit by fallout from Enron’s failure.

We believe that our company’s total exposure to Enron’s bankruptcy is lessthan $40 million. To date, Enron has failed to pay ONEOK’s energy trading business$14 million for commodity transactions that were scheduled for settlement in lateNovember and early December 2001. These transactions were primarily for storage

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management and natural gas hedging. Enron’s bankruptcy also created an event oftechnical default related to financing leases tied to ONEOK’s Bushton gas processingplant. ONEOK, however, continues to make all payments due under the leases, andwe have received a waiver of the technical default.

The situation has also caused what Wall Street analysts are calling “Enron-itis,”a fear that all energy companies’ financial disclosures are less than honest. How doesONEOK differ from Enron? Our approaches tell the story.

Mark-to-market accounting (MTM) — This is the required accounting methodfor all trading organizations, and it involves reporting assets on the balance sheet attheir estimated fair market value rather than their original acquisition cost. Because it is difficult to assign a true future value to trade contracts, ONEOK believes it ismore conservative in MTM reporting than Enron. Enron assumed values for multiplevariables that lasted as much as 20 years into the future. That created greatly inflatedassets on Enron’s balance sheet. Congress has called for more controls on MTM aswell as revisions in the laws that regulate energy markets. We applaud those actions.

Special purpose financing entities with the debt secured by company stock —This is an aggressive approach that has never been used by ONEOK. We tradearound real company assets, never stock. Enron had multiple partnerships, financeddirectly or indirectly with company stock. Each had been formed to keep losses offcompany books.

ONEOK’s culture also is dramatically different from Enron’s. Our companywas founded almost 100 years ago on core values that revere high integrity in businessethics. Through the years, our reputation has validated those values time and again.

Earnings ChargeThe confusion that accompanies the unbundling of the natural gas industry put one ofour distribution companies in a difficult and costly position this year. The OklahomaCorporation Commission denied Oklahoma Natural Gas Company (ONG) recoveryof an estimated $34.6 million for gas costs incurred during winter 2000-2001. Inresponse, ONG petitioned the Oklahoma Supreme Court to overturn the order, andONEOK announced a charge of 18 cents per diluted common share.

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Stock SplitAt the May 17, 2001, annualmeeting, shareholdersapproved a two-for-one stocksplit. The split, effective forstockholders of record May 23, increased the number of shares outstandingto approximately 59.2 millionas of that date.

DividendsONEOK declared quarterly dividends on its common stock throughout the year.The dividend amount of 15.5 cents per share of common stock reflects thetwo-for-one split. The payoutis 72.9 percent of earnings.

ONG received word during December that it had been granted a requestedstay. That action allows ONG to continue collecting gas charges while the OklahomaSupreme Court reviews the company’s case. If the appeal fails, ONG will issue arefund to customers with interest. The appeal could take two years.

Clear FocusThis company has a focused objective: to render excellent service and deliver share-holder value. We are achieving this end through a strategy that blends the perfor-mance and profitability of all ONEOK business segments. That course proved to besound during 2001. Despite our gathering and processing segment’s lackluster perfor-mance, ONEOK was buoyed by the 39 percent and 280 percent increases in operat-ing income that were achieved, respectively, by ONEOK Energy Marketing & TradingCompany and ONEOK Resources Company.

We are convinced that a balanced business mix enables us to deliver sustain-able earnings growth. After reviewing ONEOK’s annual growth expectations, wedetermined that a 10 percent average increase is in line with the company’s longer-term annual growth rate. It is an attainable target and, in fact, is one we are meeting.I have tremendous confidence in our ability to meet this performance goal as we con-tinue forward.

Southwest LitigationDuring January 2002, we announced that ONEOK’s exposure to litigation related to our failed merger with Las Vegas-based Southwest Gas Corporation has beentrimmed from more than $1 billion to less than $7 million in actual damages. AFederal judge in Phoenix ruled that Southwest Gas cannot pursue claims againstONEOK. An earlier ruling limited claims by Southern Union Gas against ONEOKfor damages to out-of-pocket expenses of about $1 million. Also, racketeering claimsleveled by Southern Union against ONEOK were thrown out in U.S. District Courton May 21, 2001.

9-11 TragedyThe evil that terrorists inflicted upon America on September 11 stole our innocenceand broke our hearts. It also united our country and reminded us why we cherish the

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Credit RatingMoody’s Investors Service isreviewing ONEOK’s A2 creditrating. It cited ONEOK’s 65percent total debt-to-capitalratio as a possible limitingfactor.

Stock Repurchase During September, the ONEOKBoard of Directors approved a stock repurchase programfor up to 10 percent of thecompany’s capital stock. Any purchases made will befinanced with short-term debt or available funds.

MidCap 400 ListStandard & Poor’s switchedONEOK from its S&P 500 listto its MidCap 400 list onAugust 29, 2001. The marketcapitalization criteria for theS&P 500 changed during 2001to $4 billion. ONEOK’s marketcapitalization is about $1 bil-lion. ONEOK had been part ofthe S&P 500 since May 1985.

Board TransitionsPattye L. Moore, president ofSonic Corporation (NASDAQ:SONC), was elected to theONEOK Board of Directors onFebruary 21, 2002. DuringMoore’s tenure with Sonic, shehas managed significant strate-gic initiatives that helped thedrive-in restaurant businessreach nearly $2 billion in annual sales. We welcome her insight to our Board.

Douglas R. Cummings,chairman of Cummings OilCompany, will retire fromour Board on May 16,2002. A director since1989, Cummings’ counseland wisdom have beenimmeasurable, especiallyin issues regarding naturalgas and oil production. Hispresence will be missed.

freedoms we enjoy. Many ONEOK employees and retirees made voluntary contribu-tions to the New York State World Trade Center Relief Fund. The compassion andgenerous spirit displayed by our employees never ceases to be amazing.

The events of September 11 also hastened the nation’s economic downturn,especially for travel-related industries. The reduced need for jet fuel made crude oilprices drop, which in turn drove down the relative prices of natural gas liquids.Although ONEOK got caught in the ripple effect, our situation is insignificant whencompared with the losses suffered by others.

ONEOK has always been vigilant about safety issues. Following September 11,we reviewed our policies and adjusted them where needed. The measures we have in place to protect employees, customers, facilities, pipelines, records and data are comprehensive and prudent.

Long HaulFor ONEOK, 2001 was a year that required us to roll up our sleeves and focus on thebasics of our business. I like what doing so revealed: bumps in the road make each ofus work a little harder. ONEOK employees remain committed to the high integrityand business ethics that have anchored this company for almost a century. They takenothing for granted and are willing to invest their talents and time in ONEOK. Thatbodes well for the future. ONEOK will be a competitive force in the energy industryfor the long haul. And our optimism is real.

David KyleChairman, President and Chief Executive OfficerTulsa, OklahomaMarch 15, 2002

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history and his career record of714 homers stood from 1935until 1974. The talented hitterworked hard to earn his recog-nition: Along the way he struckout 1,330 times and had 2,056bases on balls. His dedication,however, paid off. Ruth retiredwith a .342 lifetime battingaverage and was one of the firstfive players elected to theNational Baseball Hall of Fame.

Babe Ruth was the first greathome run hitter in baseball

Price ComparisonNatural Gas Liquids

6.00

5.00

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0.0091 92 93 94 95 96 97 98 99 00 01

NYMEX Natural Gas

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MB

tu)

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(Just 12 months later, many investors were scrambling in order to stay in the game.)

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S w i n gOur gathering and processing segment is

especially price-sensitive and complicated. About once every five years, the operations arelike gold. Cyclical demand, on the other hand,can create a tough business climate for the segment; but over time the segment produces attractive returns.

Clearly, the market did not favor gatheringand processing during 2001.

The operating income generated byONEOK’s gas gathering and processing segment during 2000 was $110.8 million, up411.2 percent from 1999 results. In 2001, lower prices for natural gas and natural gas liquids created an about-face. Operating incomedropped to $44 million. If the current price trend continues, operating income could dip further.

According to the Bureau of Labor Statistics, theraw energy products’ price index plummeted 53percent during 2001. That was after it hadincreased 85.6 percent in 2000. The U.S.Department of Energy notes that natural gasfutures took a 74 percent nosedive in 2001 as thedomestic economy slowed. And while Standard & Poor’s expects earnings for natural gas industryand electric companies to increase modestly in2002, it also believes the average spot price forgas will decline to about $2.91 per thousandcubic feet. Are energy prices volatile? You bet.

ONEOK’s distribution operating segmenttraditionally has limited volatility. The transporta-tion and storage segment also experiences mini-mal uncertainty. Production, marketing and trading, and gathering and processing segments, on the other hand, are sensitive to a myriad ofsituations and influences.

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Activities

ONEOK Field Services CompanyONEOK Gas Processing, L.L.C.

Results(For The Year Ended Dec. 31) 2001 2000

Natural gas liquids (NGL)and condensate sales ($000) $ 587,842 $ 536,470

NGL sales (MBbls) 27,719 23,984Gas sales ($000) $ 635,569 $ 426,364Gas sales (MMBtu) 142,828 115,180Capital expenditures ($000) $ 51,442 $ 32,383Operating income ($000) $ 43,567 $ 110,819

Conducts gas gatheringand processing. Also fractionates, stores andmarkets natural gas liquids (NGL) products.

Companies

Gathering andProcessing

ONEOK FIELD SERVICES

PROCESSING PLANTS

Activities

ONEOK Power Marketing Company

Results(For The Year Ended Dec. 31) 2001 2000

Power sales ($000) $ 28,092 $ —Power volumes (MMwh) 467 —Capital expenditures ($000) $ 42,302 $ 58,697Operating income ($000) $ 3,486 $ —

Conducts wholesale trading of electricity.

Companies

Power

SPRING CREEKPOWER PLANT

How do you neutralize market swing? You can’t when the swing is as dramatic as it was in 2001. But you can soften the blow by usingprudent tactics that help businesses prosper inbad times as well as good. A sampling of tacticsthat ONEOK puts into play follows.

Gathering and Processing — ONEOK’s exposure toprocessing spread volatility is limited to the volume ofgas purchased under the company’s “keep-whole” con-tracts. At 2001 year-end, 20 percent of our purchasedgas was under keep-whole contracts, down from 32 percent one year ago. We continue in our efforts to mitigate risk by amending our keep-whole contractsto include fee-based gathering and/or conditioningfees, while adding more volume under fee-based andpercent-of-proceeds type contracts.

Marketing and Trading — During 2001, we lever-aged our ability to capture market opportunities inCalifornia, the Rockies and Chicago by almost dou-bling our storage positions in these locations. Now, inaddition to our core storage capabilities in Oklahoma,Texas and Kansas, we have three new vital positionsthrough which we can capture volatility.

Production — ONEOK Resources focuses on operat-ing as efficiently as possible and drilling wells that fitour economic criteria. Corporately, a portion of thecompany’s 2002 production has hedged prices rang-ing from $3.15 to $3.22 per thousand cubic feet.That helps moderate market price volatility.

How does ONEOK prosper during extreme swings?We always keep one foot firmly planted in reality. We focus on what we do well.

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TH E MA R K E T SW I N GC O N T I N U E D

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B r a g g i n gR i g h t s

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(These striking results, produced in difficult times, are the product of employees who know how

to roll with the punches and execute critical business strategies.)

Production In light of higher commodity prices during most offiscal 2001, ONEOK Resources Company focusedon small, strategic acquisitions and avoided thehigher-priced and larger production packages.(Translation: There is no significant acquisition toreport.) As prices continue to fall, greater acquisi-tion opportunities are expected. ONEOKResources’ past acquisitions, when coupled with2001 prices, achieved $58 million in operatingincome, up 280 percent from one year ago.

Following its strategy to exploit acquired or legacyproperties, the production segment completed 155wells during the year. That number is almost a 20-year record and a hefty 50 percent bump over the103 wells completed in 2000. The completion suc-cess rate for the year was 94 percent.

ONEOK Resources’ financial results reflecthedges in place. During 2001, 74 percent of thecompany’s gas production was hedged at an averageprice of $3.60 per thousand cubic feet. For 2002,11 percent is hedged at an average price of $3.17.

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despite having only threemonths of formal schooling.Edison’s development of thephonograph in 1877 ranks asone of the world’s most originalinventions. Failure never dis-couraged Edison. When 10,000experiments with a storage battery did not produce resultsEdison said, “I have not failed.I’ve just found 10,000 ways that won’t work.”

Thomas Edison patented 1,093inventions during his lifetime,

150

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97 98 99 00 01

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6977

103

155

ONEOK ResourcesWell Completions

75,000

50,000

25,000

97 98 99 00 01

$7,848$12,342

$25,871

$51,274

$71,344

ONEOK EnergyMarketing & Trading Operating Income ($000)

3.0

2.0

1.0

97 98 99 00 01

0.91.0

1.1

2.7 2.7

ONEOK Energy Marketing & Trading Sales Volume (Bcf/d)

The group also took advantage of a veryattractive offer and sold its 40 percent equity investment in K. Stewart Petroleum Corp. In the process, ONEOK Resources booked a small gain and retained some potential upside shouldthe purchaser be successful in developing majorprospects owned by K. Stewart.

Marketing and TradingWe celebrated a milestone in 2000 when ONEOKEnergy Marketing & Trading (OEMT) exceeded$4.65 billion in gross revenue. OEMT broke itsown record in 2001 by closing the year with a grossrevenue totaling $4.91 billion. The marketing andtrading group’s $71.3 million in operating incomeis a 39 percent increase over the prior year.

OEMT has been successful in its strategy tocapture trading opportunities between supplybasins and market centers. The operation holdsmore than 1 billion cubic feet per day of firmtransportation capacity, moved 2.7 billion cubicfeet of gas per day during 2001 and has access

to more than 73 billion cubic feet of storagecapacity.

Oklahoma, Texas and Kansas hold the coreof OEMT’s physical assets — its storage facilitiesand pipelines. These assets link with hub-and-spoke systems in California, the Rockies andChicago. As a result, wholesale and retail growthopportunities have developed outside the coreholdings. Success in the hub-and-spoke strategydemonstrates that OEMT can lease both trans-portation and storage capacity to capture andcapitalize on price volatility in the marketplace.The company was especially pleased that severallong-term storage agreements were negotiatedeffectively through 2005. OEMT has a presencein 28 states, extending from California to Ohioand from Texas to Minnesota.

In the 2001 Mastio Natural Gas MarketingCustomer Satisfaction Study, OEMT moved upfrom the eighth to the sixth position. These survey results help confirm that OEMT listens to customers and makes every effort to under-stand their needs.

Mastio 2001 Top-10Ranked MEGA Marketers

BR A G G I N G RI G H T SC O N T I N U E D

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1. TXU Energy Trading

2. Conoco Inc.

3. Reliant Energy

4. Mirant Americas Energy

5. Entergy-Koch Trading

6. ONEOK Energy Marketing & Trading

7. BP Amoco

8. CMS Energy Corp.

9. Aquila Energy

10. Coral Energy

Activities

ONEOK Resources Company

Results(For The Year Ended Dec. 31) 2001 2000

Natural gas sales ($000) $ 107,846 $ 60,966Natural gas production (MMcf) 27,578 26,746Oil sales ($000) $ 12,262 $ 8,571Oil production (MBbls) 493 400Capital expenditures ($000) $ 55,974 $ 34,035Operating income ($000) $ 57,939 $ 15,243Proved reserves at year end

Gas (Bcf) 233.0 254.7Oil (MBbls) 4,511 4,339

Produces natural gas andoil. Participates as opera-tor of some projects andas a nonoperator, interestpartner in others.

Companies

Activities

ONEOK Energy Marketing & Trading Company

Results(For The Year Ended Dec. 31) 2001 2000

Natural gas sales ($000) $ 4,906,556 $ 4,658,787Natural gas volumes (MMcf) 977,602 990,033Capital expenditures ($000) $ 1,184 $ 815Operating income ($000) $ 71,344 $ 51,274

Markets natural gas towholesale and retail cus-tomers in the United States,leases gas storage fromothers with direct access tothe West Coast and to theTexas intrastate market.

Companies

Marketingand Trading

Production

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PRODUCTION AREAS

MARKETING PRESENCE

MAJOR MARKETING HUBS

Distribution

Activities

Oklahoma Natural Gas Company

Kansas Gas Service Company

Results(For The Year Ended Dec. 31) 2001 2000

Total throughput (MMcf) 315,690 346,330Capital expenditures ($000) $ 129,937 $ 124,983Number of customers (Average) 1,436,444 1,418,444Customers per employee (Average)

Oklahoma 639 586Kansas 579 555

Operating income ($000) $ 54,097 $ 97,931

Provides natural gas distribu-tion services to 80 percent ofOklahoma, including residen-tial, commercial and industri-al customers. Operations areregulated by the OklahomaCorporation Commission.

Companies

Provides natural gas distribu-tion services to approximatelytwo-thirds of Kansas, includ-ing residential, commercialand industrial customers.Operations are regulated bythe Kansas CorporationCommission.

KANSAS GAS SERVICE TERRITORY

OKLAHOMA NATURAL GAS TERRITORY

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Activities

ONEOK Gas Transportation, L.L.C.Mid Continent Market CenterMid Continent Transportation Company ONEOK WesTex Transmission CompanyONEOK Gas Gathering

ONEOK Gas Storage, L.L.C.

Results(For The Year Ended Dec. 31) 2001 2000

Volumes transported (MMcf) 538,221 557,052Capital expenditures ($000) $ 35,911 $ 37,701Operating income ($000) $ 57,657 $ 62,158

Provides affiliated and non-affiliated companies accessto key natural gas produc-ing areas through 9,700miles of integrated gather-ing and pipeline systems.

Companies

Owns 10 underground storage facilities and leasescapacity to third parties.

Transportation and Storage

ONEOK GAS TRANSPORTATION,L.L.C.

ONEOK GAS TRANSPORTATION — GATHERING

MID CONTINENT MARKET CENTER

MID CONTINENT TRANSPORTATION CO.

ONEOK WESTEX TRANSMISSION CO.

STORAGE

BR A G G I N G RI G H T SC O N T I N U E D

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Transportation and StorageLooking to the future, ONEOK GasTransportation (OGT) signed a long-term agreement to provide natural gas transportationservice to the Redbud Energy Facility. The 1,100-megawatt, combined-cycle generating plantis under construction just northeast of OklahomaCity. OGT will provide firm gas transportationservice of up to 200 million cubic feet per day tothe plant. Co-developed by InterGen andEnergetix, the plant is expected to begin commer-cial operations by supplying wholesale electricpower during the second quarter of 2003.

DistributionThe 1.4 million customers served by Kansas GasService Company and Oklahoma Natural Gas

Company have seen significantly lower utilitybills this winter when compared with theunprecedented spikes in gas prices during 2000-2001. KGS and ONG purchase natural gas onbehalf of customers through competitive biddingprocesses. Ample natural gas supplies and declin-ing market prices have made residential bills 30to 40 percent less than one year ago.

Both companies also invested in initiativesduring 2001 that are resulting in improved customer services and increased efficiencies.Automated meter reading devices, for example,have been installed in more than 153,000 KGScustomer locations. Benefits to customers includesame-day reads, faster response to complaintsand elimination of inaccessible meters.

Desire andPerformance

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campaigns for U.S. Senate and one nomination for VicePresident. When Lincoln finallywon the 1860 presidential elec-tion, he received less than 40percent of the popular vote. YetLincoln is regarded as one ofthe greatest presidents of alltime because of his leadershipduring the Civil War, his effortsto end slavery and his promo-tion of democracy as a validform of government.

Abraham Lincoln failed in busi-ness and lost re-nomination forCongress. He also was defeatedin a run for state legislature, two

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David Kyle,chairman, president andCEO, ONEOK, Inc.

Gene Dubay, president,Kansas Gas ServiceCompany

Chris Skoog, president,ONEOK Energy Marketing &Trading Company

J.D. Holbird, president,ONEOK ResourcesCompany

John Gibson, president - energy,ONEOK, Inc.

Sam Combs, president,Oklahoma Natural GasCompany

Kyle: The impact on ONEOK is muchmore limited than it was for many others in the industry. Our exposure isunder $40 million, an amount basedon commodity transactions primarilyfor storage management and naturalgas production hedges with ONEOKEnergy Marketing & Trading andONEOK Resources. ONEOK’s strategyis very different from Enron’s. Ourcompany trades around actual physi-cal assets, such as the natural gasthat we have in storage. I believe ourstrategy puts us in a great position to expand in our core territories andto take advantage of opportunitiesresulting from this difficult situation.

A:

Q: The demise of Enron’s trading operation set the stage for 2002.

How is ONEOK affected?

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Marketing and Trading’s “hub-and-spoke”concept has worked well in California, theRockies and Chicago. What’s next?

Skoog: Our goal for 2002 is twofold. We hope toestablish a southeast leg and additional storageso we can get firm transportation to Louisiana,Georgia and Florida. By year-end, we also hope tohave a fully imbedded Canadian leg and storage.As a result, our marketing efforts should reach anadditional five or six states.

Can ONEOK sustain its desired 10 percentcompound annual growth?

Kyle: Internal growth alone won’t support ourstated goal. We have to be bigger. That meansmaking acquisitions that allow ONEOK to gaineconomies of scale. We also must take aggres-sive steps to manage the earnings volatility of our gathering and processing segment.

Gathering and Processing has a cyclicalhistory of volatility. What changes will make a difference?

Gibson: Most of the volatility in earnings that we experience is attributable to our keep-wholecontracts. From time to time, these margins canbe negative. That’s why our focus on amendingthose contracts is so important. We also need toprovide producers with more fee-based andprocess-sharing agreements. These agreementshave less exposure to margin risk and align ourinterest with those of the producers.

Will ONEOK Resources remain in its“acquire and exploit” mode?

Holbird: Absolutely. We’d like to be four or fivetimes bigger than we are now, and we have theinfrastructure in place to do that. Our challenge is to identify equity transactions that will beaccretive to corporate earnings. We also havespecific rate-of-return criteria. We pulled out ofseveral significant deals during 2001 because our assessment of the value was half the seller’sexpectations. We completed several small dealsaround the half-million dollar range in 2001. So,we’re not averse to going after crumbs. You giveus enough crumbs, and our team can put a loaftogether. That’s the nature of the beast.

ONG and the Oklahoma CorporationCommission were at odds last year. What are you doing to change that situation?

Combs: We believe it is vital that we redefine ourrelationship with the commission. ONG is in atransitional phase as an unbundled natural gasdistribution company. That creates a regulator’sdilemma: How do you regulate — which bespeaksof a high level of control — yet at the same timetry to embrace competition, which by its naturesays you relinquish control? The OklahomaCorporation Commission is struggling with that.We all are. Doing a better job communicating and telling our story will be an important step.

What challenge does Kansas Gas Serviceface in 2002?

Dubay: After a year of trauma because of anabnormally cold winter in 2000, Kansas Gas isgetting back to more normal business operations.We are focusing on service standards and onoperating as efficiently as possible. During 2002,Kansas Gas will file a rate request with theKansas Corporation Commission. It has been five years since we filed a rate case, and this one will be ONEOK’s first effort in Kansas.

Companies throughout the U.S. are reduc-ing their workforce. Will ONEOK follow suit?Kyle: Recession or not, I believe workforcereductions and early-outs are the wrong tools.The average company has a 10 percent annualattrition rate, and ONEOK’s rate is similar. Thereis no reason to go through the havoc of layoffswhen you can achieve the same results throughattrition. Across the board on all levels, ouremployees are sharing in sacrifices so ONEOKcan deliver solid financial performance.

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ONEOK, INC.

David L. Kyle, 49Chairman of the Board, Presidentand Chief Executive Officer

John A. Gaberino Jr., 60Senior Vice President, GeneralCounsel and Corporate Secretary

James C. Kneale, 50Senior Vice President, Treasurerand Chief Financial Officer

Edmund J. Farrell, 58Senior Vice President -Administration

James M. Fallon, 45Vice President - Corporate Services

P. Sue Griffin, 46Vice President, Associate GeneralCounsel and Assistant Secretary

D. Lamar Miller, 42Vice President - Risk Control

Beverly C. Monnet, 43Vice President, Controller andChief Accounting Officer

Charles O. Moore, 39Vice President - InformationTechnology

David E. Roth, 46Vice President - Human Resources

Weldon L. Watson, 54Vice President - Investor Relationsand Communications

DISTRIBUTIONKANSAS GAS SERVICE COMPANY

Eugene N. Dubay*, 53President

David D. Arnold, 43Vice President - Customer Service

Bradley O. Dixon, 48Vice President - Western Region

Joseph B. Diskin, 59Vice President - Eastern Region

William G. Eliason, 49Vice President - Gas Strategy

OKLAHOMA NATURAL GAS COMPANY

Samuel Combs III*, 44President

Roger N. Mitchell, 50Vice President - Eastern Region

Daniel C. Walker, 48Vice President - Western Region

Phyllis S. Worley, 51Vice President - Administration

ENERGYGATHERING AND PROCESSINGTRANSPORTATION AND STORAGE

John W. Gibson*, 49President - Energy

Larry L. Fischer, 58Vice President - Engineering andOperations, Kansas/Texas Regions

Stephan R. Guy, 47Vice President, Engineering andOperations - Oklahoma Region

Sam H. McVay Jr., 57Vice President - BusinessDevelopment

Greg A. Phillips, 39Vice President - Gas Supply

John L. Sommer, 46Vice President, Gathering,Transportation and Storage -Commercial

Sherman W. “Pete” Walker, 50Vice President - CommercialServices

MARKETINGONEOK ENERGY MARKETING ANDTRADING COMPANY

Christopher R. Skoog, 38President

William S. Maxwell, 41Vice President - Financial Trading

Patrick J. McDonie, 41Vice President - Trading

PRODUCTIONONEOK RESOURCES COMPANY

J. D. Holbird, 52President

George W. Drake, 52Vice President - Marketing

Kenneth D. Lovell, 47Vice President - Acquisitions andExploration

W. Clark Southmayd Jr., 43Vice President - Engineering andOperations

POWERONEOK POWER MARKETINGCOMPANY

William R. DeWare, 46Vice President - Marketing andBusiness Development

Officer Retirements

Donald T. Jacobsen, 53 ONEOK Producer Services, L.L.C.,Vice President - Gathering, retiredNovember 1, 2001, following sixyears of service.

Carl J. Holliday, 58Oklahoma Natural Gas CompanyVice President - Eastern Region,retired October 1, 2001, following 36 years of service.

*Also a ONEOK Corporate Officer

Edwyna G. AndersonRetired General CounselDuquesne Light CompanyPittsburgh, Pennsylvania

William M. BellVice Chairman - Trust andInvestment ManagementBancFirstOklahoma City, Oklahoma

Douglas R. Cummings*Chairman of the BoardCummings Oil CompanyOklahoma City, Oklahoma

John B. DicusPresident and Chief Operating OfficerCapitol Federal Savings BankTopeka, Kansas

William L. FordPresidentShawnee Milling CompanyShawnee, Oklahoma

David L. KyleChairman, President and Chief Executive OfficerONEOK, Inc.Tulsa, Oklahoma

Douglas T. LakeExecutive Vice President andChief Strategic OfficerWestern Resources, Inc.Topeka, Kansas

Bert H. MackiePresident and DirectorSecurity National BankEnid, Oklahoma

Pattye L. MoorePresidentSonic CorporationOklahoma City, Oklahoma

Douglas Ann Newsom, Ph.D.Professor, Department ofJournalismTexas Christian UniversityFort Worth, Texas

Gary D. ParkerPresidentMoffitt, Parker & Company, Inc.Muskogee, Oklahoma

J. D. ScottRetired Chairman of the BoardONEOK, Inc.Tulsa, Oklahoma

*Retiring from the Board May 16, 2002.

CHAIRMAN EMERITUSC. C. IngramONEOK, Inc.Tulsa, Oklahoma

Corporate Officers

Directors

Operations Officers

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Btu: British Thermal Unit(s). The amount of heat approxi-mately equivalent to that given off by a kitchen match. Onecubic foot of natural gas contains approximately 1,000Btu.

Exposure: Sensitivity to a source of risk.

Fee-Based Contract: Contract in which the processor ispaid a fee for the natural gas or natural gas liquids that areprocessed, stored, fractionated or transported.

Hedging: The process of reducing financial risk to adversenatural gas, oil or other commodity price movements byentering into offsetting transactions.

Keep-Whole Contract: Also referred to as “fuel and shrink.”Contract in which the processor replaces NGLs extractedwith natural gas to maintain the Btu content at the tailgateof the plant. It allows the owner of the gas to be “keptwhole” in terms of Btus and allows the processor to sell the recovered NGLs.

Natural Gas Liquids (NGL): Liquid hydrocarbons that are extracted and separated from the natural gas stream.NGL products include ethane, propane, iso butane, butaneand natural gasoline.

Percent-of-Proceeds Contract: Contract in which theprocessor is paid a percentage of the market value of the natural gas and NGLs that are processed.

Risk: Exposure to uncertainty.

UNITS OF MEASURE

Mcf: Thousand cubic feet

MMcf: Million cubic feet

Bcf: Billion cubic feet

Bbl: Barrels (42 U.S. gallons)

MBbls: Thousand barrels

MGal: Thousand gallons

MMBtu: Milion Btus

Annual MeetingThe annual meeting of shareholders will be held Thursday, May 16, 2002, at 10 a.m. at ONEOK Plaza, 100 West Fifth Street, Tulsa, Oklahoma.

AuditorsKPMG LLP100 West Fifth Street, Suite 310Tulsa, OK 74103-9919

Direct Stock Purchase and Dividend Reinvestment PlanThe company’s Direct Stock and Dividend ReinvestmentPlan provides investors the opportunity to purchase shares of common stock without payment of any brokerage fees or service charges.

Transfer Agent, Registrar and Dividend Disbursing AgentUMB Bank, N.A.Securities Transfer DivisionP.O. Box 410064Kansas City, MO 64141-0064Phone Toll Free: (866) 235-0232Hours: Weekdays, 8 a.m. - 4:30 p.m., CSTE-mail: stock.transfer@umb.comWeb Site: www.umb.com/business/shareholder/

Credit RatingStandard & Poor’s AMoody’s Investors Service A2

Stock TradingThe common stock is listed on the New York StockExchange. The ticker symbol for ONEOK common stock isOKE. The corporate name ONEOK is used in newspaperstock listings.

ONEOK Shareholder InformationA shareholder communication service is available by phone at (800) 653-8083.The following information may be accessed:• Faxed news releases• Transfer agent requests• Requests for mailed copies of:

(1) Annual report(2) News releases(3) 10-K(4) 10-Q(5) Proxy statement(6) Direct Stock Purchase and Dividend

Reinvestment Plan (7) Prospectus

Investor Relations ContactWeldon Watson, vice president — investor relations andcommunications, by phone at (918) 588-7158 or by e-mailat wwatson@oneok.com

Corporate Web SiteONEOK business and financial information is available at: www.oneok.com

Corporate Information

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ONEOK, Inc.100 West Fifth StreetPost Office Box 871

Tulsa, OK 74102-0871

www.oneok.com