Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2009

___ 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 001-13643

ONEOK, Inc.

(Exact name of registrant as specified in its charter)

Oklahoma	73-1520922
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 West Fifth Street, Tulsa, OK	74103
(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 check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every

Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X No __

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer X Accelerated filer __ Non-accelerated filer __ Smaller reporting company__

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

Yes __ No X

On October 30, 2009, the Company had 105,490,566 shares of common stock outstanding.

Table of Contents

ONEOK, Inc.

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, 2009 and 2008	5
	Consolidated Balance Sheets - September 30, 2009 and December 31, 2008	6-7
	Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2009 and 2008	9
	Consolidated Statement of Shareholders’ Equity - Nine Months Ended September 30, 2009	10-11
	Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2009 and 2008	12
	Notes to Consolidated Financial Statements	13-33
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34-56
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57
Item 4.	Controls and Procedures	58
Part II.	Other Information
Item 1.	Legal Proceedings	58-59
Item 1A.	Risk Factors	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Submission of Matters to a Vote of Security Holders	60
Item 5.	Other Information	60
Item 6.	Exhibits	60-61
Signature		62

As used in this Quarterly Report, references to “we,” “our” or “us” refer to ONEOK, Inc., an Oklahoma corporation, and its predecessors and subsidiaries, unless the context indicates otherwise.

The statements in this Quarterly Report 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,” “could,” “may,” “continue,” “might,” “potential,” “scheduled” 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 such expectations and assumptions 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 and under Part I, Item 1A, “Risk Factors,” in our Annual Report.

INFORMATION AVAILABLE ON OUR WEB SITE

We make available on our Web site copies of our Annual Report, Quarterly Reports, Current Reports on Form 8-K, amendments to those reports filed or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act and reports of holdings of our securities filed by our officers and directors under Section 16 of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC. Our Web site and any contents thereof are not incorporated by reference into this report.

We also make available on our Web site the Interactive Data Files required to be submitted and posted pursuant to Rule 405 of Regulation S-T. In accordance with Rule 402 of Regulation S-T, the Interactive Data Files shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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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

Annual Report

Annual Report on Form 10-K for the year ended December 31, 2008

Bbl

Barrels, 1 barrel is 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(s)

British thermal units, a measure of the amount of heat required to raise the

temperature of one pound of water one degree Fahrenheit

Bushton Plant

Bushton Gas Processing Plant

EBITDA

Earnings before interest, taxes, depreciation and amortization

Exchange Act

Securities Exchange Act of 1934, as amended

FASB

Financial Accounting Standards Board

FERC

Federal Energy Regulatory Commission

GAAP

Accounting principles generally accepted in the United States of America

Guardian Pipeline

Guardian Pipeline, L.L.C.

Intermediate Partnership

ONEOK Partners Intermediate Limited Partnership, a wholly owned

subsidiary of ONEOK Partners, L.P.

KCC

Kansas Corporation Commission

KDHE

Kansas Department of Health and Environment

LDC

Local Distribution Company

LIBOR

London Interbank Offered Rate

MBbl

Thousand barrels

MBbl/d

Thousand barrels per day

Mcf

Thousand cubic feet

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, Inc.

NGL products

Marketable natural gas liquid purity products, such as ethane, ethane/propane

mix, propane, iso-butane, normal butane and natural gasoline

NGL(s)

Natural gas liquid(s)

Northern Border Pipeline

Northern Border Pipeline Company

NYMEX

New York Mercantile Exchange

OBPI

ONEOK Bushton Processing Inc.

OCC

Oklahoma Corporation Commission

ONEOK

ONEOK, Inc.

ONEOK Partners

ONEOK Partners, L.P.

ONEOK Partners GP

ONEOK Partners GP, L.L.C., a wholly owned subsidiary of ONEOK and the

sole general partner of ONEOK Partners, L.P.

OPIS

Oil Price Information Service

Overland Pass Pipeline Company

Overland Pass Pipeline Company LLC

Quarterly Report(s)

Quarterly Report(s) on Form 10-Q

S&P

Standard & Poor’s Rating Group

SEC

Securities and Exchange Commission

Securities Act

Securities Act of 1933, as amended

XBRL

eXtensible Business Reporting Language

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
		Three Months Ended						Nine Months Ended
		September 30,						September 30,
(Unaudited)		2009			2008			2009			2008
	(Thousands of dollars, except per share amounts)

Revenues		$	2,364,736		$	4,239,246		$	7,382,190		$	13,314,188
Cost of sales and fuel			1,912,882			3,784,220			5,946,499			11,852,422
Net margin			451,854			455,026			1,435,691			1,461,766
Operating expenses
Operations and maintenance			179,678			179,840			526,271			519,263
Depreciation and amortization			72,318			60,249			215,693			179,429
General taxes			24,900			24,068			75,388			66,079
Total operating expenses			276,896			264,157			817,352			764,771
Gain (loss) on sale of assets			(1,180	)		1,310			3,246			1,319
Operating income			173,778			192,179			621,585			698,314
Equity earnings from investments (Note L)			20,054			29,412			55,464			74,805
Allowance for equity funds used during construction			7,290			15,616			25,761			35,788
Other income			8,950			12,723			18,554			16,659
Other expense			(995	)		(11,332	)		(6,338	)		(16,347	)
Interest expense			(72,689	)		(61,180	)		(224,042	)		(183,100	)
Income before income taxes			136,388			177,418			490,984			626,119
Income taxes			(34,080	)		(24,031	)		(143,777	)		(146,973	)
Net income			102,308			153,387			347,207			479,146
Less: Net income attributable to noncontrolling interests			54,266			95,354			135,201			235,411
Net income attributable to ONEOK		$	48,042		$	58,033		$	212,006		$	243,735

Earnings per share of common stock (Note M)
Net earnings per share, basic		$	0.46		$	0.56		$	2.01		$	2.34
Net earnings per share, diluted		$	0.45		$	0.55		$	2.00		$	2.30

Average shares of common stock (thousands)
Basic			105,420			104,446			105,306			104,319
Diluted			106,488			105,636			106,061			105,843

Dividends declared per share of common stock		$	0.42		$	0.40		$	1.22		$	1.16
See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
	September 30,		December 31,
(Unaudited)	2009		2008
Assets	(Thousands of dollars)
Current assets
Cash and cash equivalents	$	52,180	$	510,058
Accounts receivable, net		726,719		1,265,300
Gas and natural gas liquids in storage		657,403		858,966
Commodity exchanges and imbalances		84,268		56,248
Energy marketing and risk management assets (Notes B and C)		127,877		362,808
Other current assets		208,515		324,222
Total current assets		1,856,962		3,377,602

Property, plant and equipment
Property, plant and equipment		10,010,406		9,476,619
Accumulated depreciation and amortization		2,311,810		2,212,850
Net property, plant and equipment (Note J)		7,698,596		7,263,769

Investments and other assets
Goodwill and intangible assets		1,032,476		1,038,226
Energy marketing and risk management assets (Notes B and C)		32,191		45,900
Investments in unconsolidated affiliates (Note L)		774,347		755,492
Other assets		634,898		645,073
Total investments and other assets		2,473,912		2,484,691
Total assets	$	12,029,470	$	13,126,062
See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
	September 30,			December 31,
(Unaudited)	2009			2008
Liabilities and shareholders’ equity	(Thousands of dollars)
Current liabilities
Current maturities of long-term debt	$	268,210		$	118,195
Notes payable (Note F)		824,000			2,270,000
Accounts payable		766,580			1,122,761
Commodity exchanges and imbalances		205,662			188,030
Energy marketing and risk management liabilities (Notes B and C)		49,234			175,006
Other current liabilities		530,775			319,772
Total current liabilities		2,644,461			4,193,764

Long-term debt, excluding current maturities (Note G)		4,340,211			4,112,581

Deferred credits and other liabilities
Deferred income taxes		893,213			890,815
Energy marketing and risk management liabilities (Notes B and C)		12,995			46,311
Other deferred credits		738,815			715,052
Total deferred credits and other liabilities		1,645,023			1,652,178

Commitments and contingencies (Note I)

Shareholders’ equity

ONEOK shareholders’ equity
Common stock, $0.01 par value:
authorized 300,000,000 shares; issued 122,274,466 shares and outstanding
105,465,408 shares at September 30, 2009; issued 121,647,007 shares and
outstanding 104,845,231 shares at December 31, 2008		1,223			1,216
Paid in capital		1,317,167			1,301,153
Accumulated other comprehensive loss (Note D)		(118,540	)		(70,616	)
Retained earnings		1,636,572			1,553,033
Treasury stock, at cost: 16,809,058 shares at September 30, 2009 and
16,801,776 shares at December 31, 2008		(696,807	)		(696,616	)
Total ONEOK shareholders’ equity		2,139,615			2,088,170

Noncontrolling interests in consolidated subsidiaries		1,260,160			1,079,369

Total shareholders’ equity		3,399,775			3,167,539
Total liabilities and shareholders’ equity	$	12,029,470		$	13,126,062
See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
	Nine Months Ended
	September 30,
(Unaudited)	2009			2008
	(Thousands of dollars)
Operating activities
Net income	$	347,207		$	479,146
Depreciation and amortization		215,693			179,429
Allowance for equity funds used during construction		(25,761	)		(35,788	)
Gain on sale of assets		(3,246	)		(1,319	)
Equity earnings from investments		(55,464	)		(74,805	)
Distributions received from unconsolidated affiliates		56,896			67,812
Deferred income taxes		72,199			72,884
Stock-based compensation expense		15,233			26,776
Allowance for doubtful accounts		3,062			11,668
Inventory adjustment, net		-			9,659
Investment securities gains		(2,361	)		(11,142	)
Changes in assets and liabilities:
Accounts receivable		532,950			634,361
Gas and natural gas liquids in storage		192,398			(482,360	)
Accounts payable		(347,374	)		(210,768	)
Commodity exchanges and imbalances, net		(10,388	)		(3,137	)
Accrued interest		34,649			48,736
Energy marketing and risk management assets and liabilities		84,379			49,904
Unrecovered purchased gas costs		11,244			(51,959	)
Fair value of firm commitments		198,516			(135,826	)
Other assets and liabilities		(48,895	)		(94,873	)
Cash provided by operating activities		1,270,937			478,398

Investing activities
Changes in investments in unconsolidated affiliates		(19,878	)		3,063
Capital expenditures (less allowance for equity funds used during construction)		(614,757	)		(1,033,063	)
Proceeds from sale of assets		10,507			1,774
Proceeds from insurance		2,569			9,792
Acquisitions		-			2,450
Cash used in investing activities		(621,559	)		(1,015,984	)

Financing activities
Borrowing (repayment) of notes payable, net		(576,000	)		1,119,614
Repayment of notes payable with maturities over 90 days		(870,000	)		-
Issuance of debt, net of discounts		498,325			-
Long-term debt financing costs		(4,000	)		-
Payment of debt		(111,506	)		(412,219	)
Repurchase of common stock		(252	)		(29	)
Issuance of common stock		6,739			7,249
Issuance of common units to noncontrolling interests, net of discounts		241,643			146,969
Dividends paid		(128,467	)		(120,986	)
Distributions to noncontrolling interests		(163,738	)		(149,173	)
Cash provided by (used in) financing activities		(1,107,256	)		591,425
Change in cash and cash equivalents		(457,878	)		53,839
Cash and cash equivalents at beginning of period		510,058			19,105
Cash and cash equivalents at end of period	$	52,180		$	72,944
See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY


	ONEOK Shareholders’ Equity
								Accumulated
	Common							Other
	Stock			Common		Paid-in		Comprehensive
(Unaudited)	Issued			Stock		Capital		Loss
	(Shares)		(Thousands of dollars)

December 31, 2008		121,647,007		$	1,216	$	1,301,153	$	(70,616	)
Net income		-			-		-		-
Other comprehensive loss (Note D)		-			-		-		(47,924	)
Repurchase of common stock		-			-		-		-
Common stock issued		627,459			7		16,014		-
Common stock dividends -
$1.22 per share		-			-		-		-
Issuance of common units to noncontrolling interests		-			-		-		-
Distributions to noncontrolling interests		-			-		-		-
September 30, 2009		122,274,466		$	1,223	$	1,317,167	$	(118,540	)
See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(Continued)

	ONEOK Shareholders’ Equity
								Noncontrolling
								Interests in			Total
		Retained			Treasury			Consolidated			Shareholders’
(Unaudited)		Earnings			Stock			Subsidiaries			Equity
	(Thousands of dollars)

December 31, 2008		$	1,553,033		$	(696,616	)	$	1,079,369		$	3,167,539
Net income			212,006			-			135,201			347,207
Other comprehensive loss (Note D)			-			-			(32,315	)		(80,239	)
Repurchase of common stock			-			(252	)		-			(252	)
Common stock issued			-			61			-			16,082
Common stock dividends -
$1.22 per share			(128,467	)		-			-			(128,467	)
Issuance of common units to noncontrolling interests			-			-			241,643			241,643
Distributions to noncontrolling interests			-			-			(163,738	)		(163,738	)
September 30, 2009		$	1,636,572		$	(696,807	)	$	1,260,160		$	3,399,775

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ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Unaudited)	2009			2008			2009			2008
	(Thousands of dollars)

Net income	$	102,308		$	153,387		$	347,207		$	479,146
Other comprehensive income (loss), net of tax
Unrealized gains (losses) on energy marketing and risk management
assets/liabilities, net of tax		(19,464	)		182,347			19,004			63,777
Realized (gains) losses in net income, net of tax		(20,193	)		(86,333	)		(90,907	)		(82,333	)
Unrealized holding gains (losses) arising during the period, net of tax		(14	)		216			491			(5,230	)
Gains in investment securities recognized in net income		-			(6,832	)		-			(6,832	)
Change in pension and postretirement benefit plan liability, net of tax		(3,260	)		(2,468	)		(9,055	)		(7,405	)
Other		18			-			228			-
Total other comprehensive income (loss), net of tax (Note D)		(42,913	)		86,930			(80,239	)		(38,023	)
Comprehensive income		59,395			240,317			266,968			441,123
Less: Comprehensive income attributable to noncontrolling interests		46,933			137,650			102,886			259,082
Comprehensive income attributable to ONEOK	$	12,462		$	102,667		$	164,082		$	182,041
See accompanying Notes to Consolidated Financial Statements.

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ONEOK, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A. S UMM ARY 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. The 2008 year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements in our Annual Report. Due to the seasonal nature of our business, the results of operations for the three and nine months ended September 30, 2009, are not necessarily indicative of the results that may be expected for a 12-month period.

Our accounting policies are consistent with those disclosed in Note A of the Notes to Consolidated Financial Statements in our Annual Report.

Goodwill and Indefinite-lived Intangible Assets Impairment Test - We assess our goodwill and indefinite-lived intangible assets for impairment at least annually. There were no impairment charges resulting from our July 1, 2009, impairment test.

Recently Issued Accounting Updates

The following recently issued accounting updates affect our consolidated financial statements during 2009:

FASB Accounting Standards Codification - In June 2009, the FASB established the FASB Accounting Standards Codification (Codification) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. While the Codification does not change GAAP, it does change the manner in which we reference authoritative accounting principles in our consolidated financial statements. The Codification is effective for and has been implemented in this Quarterly Report.

Noncontrolling Interests - Effective for our year beginning January 1, 2009, we retroactively adopted new presentation and disclosure requirements for existing noncontrolling interests (previously referred to as minority interests). We report noncontrolling interests as a component of equity in our Consolidated Balance Sheets and the amounts of consolidated net income attributable to noncontrolling interests and to us in our Consolidated Statements of Income.

Derivative Instruments and Hedging Activities - Effective for our year beginning January 1, 2009, we provide enhanced disclosures about how derivative and hedging activities affect our financial position, financial performance and cash flows. These additional disclosures have been applied prospectively. See Note C for applicable disclosures.

Fair Value Measurements - As of January 1, 2009, we began measuring our assets and liabilities that are measured at fair value on a nonrecurring basis subsequent to initial recognition based upon a revised definition of fair value. The impact of these measurement changes was not material. See Note B for disclosures of our fair value measurements.

Measuring Liabilities at Fair Value - In August 2009, the FASB provided clarification for measuring liabilities at fair value. When a quoted price in an active market for an identical liability is not available, we will be required to measure fair value using a valuation technique that uses quoted prices of similar liabilities, quoted prices of identical or similar liabilities when traded as assets, or another valuation technique that is consistent with GAAP, such as the income or market approach. Additionally, when estimating the fair value of a liability, we will not be required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. We will consider liabilities measured using an unadjusted quoted price in an active market for either an identical liability or an identical liability when traded as an asset as a Level 1 fair value measurement. We will apply this guidance when measuring liabilities at fair value beginning in the fourth quarter of 2009 and do not expect the impact on those measurements to be material.

Interim Disclosures about Fair Value - Effective for our quarter ended June 30, 2009, we provide disclosures of fair value of financial instruments for interim reporting periods. These disclosures are included in Note B.

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Postretirement Benefit Plan Assets - Effective for our fiscal year ending December 31, 2009, we will provide enhanced disclosures about our plan assets, including our investment policies, major categories of plan assets, significant concentrations of risk within plan assets and inputs and valuation techniques used to measure the fair value of plan assets. These additional disclosure requirements will be applied prospectively.

Subsequent Events - Effective for our quarter ended June 30, 2009, the FASB established standards related to the accounting for and disclosure of events that occur after the balance sheet date but before consolidated financial statements are issued. We have evaluated subsequent events through November 5, 2009, the date our consolidated financial statements were issued, and all required disclosures have been made.

B. FAIR VALUE MEASUREMENTS

Refer to Notes A and C of the Notes to Consolidated Financial Statements in our Annual Report for a discussion of our fair value measurements and the fair value hierarchy.

Recurring Fair Value Measurements - The following tables set forth our recurring fair value measurements for the periods indicated:

	September 30, 2009
	Level 1			Level 2			Level 3			Netting (a)			Total
	(Thousands of dollars)
Assets
Derivatives	$	188,255		$	28,437		$	736,131		$	(792,755	)	$	160,068
Trading securities		7,271			-			-			-			7,271
Available-for-sale investment securities		2,466			-			-			-			2,466
Total assets	$	197,992		$	28,437		$	736,131		$	(792,755	)	$	169,805

Liabilities
Derivatives	$	(147,567	)	$	(11,894	)	$	(564,092	)	$	661,324		$	(62,229	)
Fair value of firm commitments		-			-			(156,337	)		-			(156,337	)
Total liabilities	$	(147,567	)	$	(11,894	)	$	(720,429	)	$	661,324		$	(218,566	)
(a) - Our derivative assets and liabilities are presented in our Consolidated Balance Sheet on a net basis. We net derivative assets and liabilities, including cash collateral, when a legally enforceable master netting arrangement exists between us and the counterparty to a derivative contract. At September 30, 2009, we held $149.1 million of cash collateral and had posted $17.7 million of cash collateral with various counterparties.

	December 31, 2008
	Level 1			Level 2			Level 3			Netting (a)			Total
	(Thousands of dollars)
Assets
Derivatives	$	580,029		$	215,116		$	454,377		$	(840,814	)	$	408,708
Trading securities		4,910			-			-			-			4,910
Available-for-sale investment securities		1,665			-			-			-			1,665
Fair value of firm commitments		-			-			42,179			-			42,179
Total assets	$	586,604		$	215,116		$	496,556		$	(840,814	)	$	457,462

Liabilities
Derivatives	$	(501,726	)	$	(55,705	)	$	(412,022	)	$	748,136		$	(221,317	)
Long-term debt swapped to floating		-			-			(171,455	)		-			(171,455	)
Total liabilities	$	(501,726	)	$	(55,705	)	$	(583,477	)	$	748,136		$	(392,772	)
(a) - Our derivative assets and liabilities are presented in our Consolidated Balance Sheet on a net basis. We net derivative assets and liabilities, including cash collateral, when a legally enforceable master netting arrangement exists between us and the counterparty to a derivative contract. At December 31, 2008, we held $92.7 million of cash collateral.

We categorize derivatives for which fair value is determined based on multiple inputs within a single level, based on the lowest level input that is significant to the fair value measurement in its entirety.

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Our Level 1 fair value measurements are based on NYMEX-settled prices, actively quoted prices for equity securities and foreign currency forward exchange rates. These balances are predominantly comprised of exchange-traded derivative contracts, including futures and certain options for natural gas and crude oil, which are valued based on unadjusted quoted prices in active markets. Also included in Level 1 are equity securities and foreign currency forwards.

Our Level 2 fair value inputs are based on NYMEX-settled prices for natural gas and crude oil that are utilized to determine the fair value of certain non-exchange traded financial instruments, including natural gas and crude oil swaps, respectively.

Our Level 3 inputs include internally developed basis curves incorporating observable and unobservable market data, NGL price curves from a pricing service, historical correlations of NGL product prices to published NYMEX crude oil prices, market volatilities derived from the most recent NYMEX close spot prices and forward LIBOR curves, and adjustments for the credit risk of our counterparties. We corroborate the data on which our fair value estimates are based using our market knowledge of recent transactions, analysis of historical correlations and validation with independent broker quotes or a pricing service. The derivatives categorized as Level 3 include natural gas basis swaps, swing swaps, options and physical forward contracts, NGL swaps and interest-rate swaps. Also included in Level 3 are the fair values of firm commitments and long-term debt that have been hedged. We do not believe that our Level 3 fair value estimates have a material impact on our results of operations, as the majority of our derivatives are accounted for as hedges for which ineffectiveness is not material.

The following tables set forth the reconciliation of our Level 3 fair value measurements for the periods indicated:

	Derivative Assets (Liabilities)					Fair Value of Firm Commitments					Long-Term Debt		Total
		(Thousands of dollars)
July 1, 2009		$	170,414				$	(137,403	)		$	-	$	33,011
Total realized/unrealized gains (losses):
Included in earnings			(1,815	)	(a)			(18,934	)	(a)		-		(20,749	)
Included in other comprehensive income (loss)			(13,137	)				-				-		(13,137	)
Transfers in and/or out of Level 3			16,577					-				-		16,577
September 30, 2009		$	172,039				$	(156,337	)		$	-	$	15,702

Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held as of September 30, 2009		$	59,180		(a)		$	(43,737	)	(a)		-	$	15,443
(a) - Reported in revenues and cost of sales and fuel in our Consolidated Statements of Income.

	Derivative Assets (Liabilities)					Fair Value of Firm Commitments					Long-Term Debt				Total
		(Thousands of dollars)
July 1, 2008		$	(410,361	)			$	393,310			$	(340,208	)		$	(357,259	)
Total realized/unrealized gains (losses):
Included in earnings			193,256		(a)			(214,801	)	(a)		(3,304	)	(b)		(24,849	)
Included in other comprehensive income (loss)			49,429					-				-				49,429
Transfers in and/or out of Level 3			(7,862	)				-				-				(7,862	)
September 30, 2008		$	(175,538	)			$	178,509			$	(343,512	)		$	(340,541	)

Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held as of September 30, 2008		$	116,031		(a)		$	(134,270	)	(a)	$	(3,304	)	(b)	$	(21,543	)
(a) - Reported in revenues and cost of sales and fuel in our Consolidated Statements of Income.
(b) - Reported in interest expense in our Consolidated Statements of Income.

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	Derivative Assets (Liabilities)				Fair Value of Firm Commitments				Long-Term Debt				Total
	(Thousands of dollars)
January 1, 2009	$	42,355			$	42,179			$	(171,455	)		$	(86,921	)
Total realized/unrealized gains (losses):
Included in earnings		194,085		(a)		(198,516	)	(a)		1,455		(b)		(2,976	)
Included in other comprehensive income (loss)		(73,197	)			-				-				(73,197	)
Maturities		-				-				100,000				100,000
Terminations prior to maturity		-				-				70,000				70,000
Transfers in and/or out of Level 3		8,796				-				-				8,796
September 30, 2009	$	172,039			$	(156,337	)		$	-			$	15,702

Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held as of September 30, 2009	$	212,621		(a)	$	(182,093	)	(a)	$	-			$	30,528
(a) - Reported in revenues and cost of sales and fuel in our Consolidated Statements of Income.
(b) - Reported in interest expense in our Consolidated Statements of Income.

	Derivative Assets (Liabilities)				Fair Value of Firm Commitments			Long-Term Debt				Total
	(Thousands of dollars)
January 1, 2008	$	(54,582	)		$	42,684		$	(338,538	)		$	(350,436	)
Total realized/unrealized gains (losses):
Included in earnings		(164,397	)	(a)		135,825	(a)		(4,974	)	(b)		(33,546	)
Included in other comprehensive income (loss)		45,423				-			-				45,423
Transfers in and/or out of Level 3		(1,982	)			-			-				(1,982	)
September 30, 2008	$	(175,538	)		$	178,509		$	(343,512	)		$	(340,541	)

Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held as of September 30, 2008	$	(138,518	)	(a)	$	142,751	(a)	$	(4,974	)	(b)	$	(741	)
(a) - Reported in revenues and cost of sales and fuel in our Consolidated Statements of Income.
(b) - Reported in interest expense in our Consolidated Statements of Income.

Realized/unrealized gains (losses) include the realization of our derivative contracts through maturity and changes in fair value of our hedged firm commitments and fixed-rate debt swapped to a floating rate. Maturities represent the long-term debt associated with an interest-rate swap that matured during the period. Terminations prior to maturity represent the long-term debt associated with an interest rate swap that was terminated during the period. Transfers into Level 3 represent existing assets or liabilities that were previously categorized at a higher level for which the inputs to our fair value estimates became unobservable. Transfers out of Level 3 represent existing assets and liabilities that were previously classified as Level 3 for which the inputs became observable in accordance with our hierarchy policy discussed in Note A of the Notes to Consolidated Financial Statements in our Annual Report.

Investment Securities - Net unrealized holding gains, net of tax, for our investment securities classified as available for sale and reported in accumulated other comprehensive income (loss) were immaterial as of December 31, 2008. Net unrealized holding gains, net of tax, for our investment securities classified as available for sale and reported in accumulated other comprehensive income (loss) were $1.3 million as of September 30, 2009. For the three and nine months ended September 30, 2009, net unrealized holding gains (losses) on available-for-sale securities included in other comprehensive income were immaterial. For the nine months ended September 30, 2009, we recorded a net gain of $2.4 million, which represents the total mark-to-market effect of trading securities still held as of September 30, 2009. The net gain (loss) recorded for the three months ended September 30, 2009, was immaterial.

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Other Financial Instruments - The approximate fair value of cash and cash equivalents, accounts receivable and accounts payable is equal to book value, due to its short-term nature. The fair value of notes payable approximates the carrying value since the interest rates, prescribed by each borrowing’s respective credit agreement, are periodically adjusted to reflect current market conditions.

The estimated fair value of long-term debt, including current maturities, was $4.9 billion at September 30, 2009. The book value of long-term debt, including current maturities, was $4.6 billion at September 30, 2009. The estimated fair value of long-term debt has been determined using quoted market prices of the same or similar issues with similar terms and maturities.

C. RISK MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES

Energy Marketing and Risk Management Activities

Our Energy Services and ONEOK Partners segments are exposed to various risks that we manage by periodically entering into derivative instruments. These risks include the following:

Commodity price risk - We are exposed to the risk of loss in cash flows and future earnings arising from adverse changes in the price of natural gas, NGLs and crude oil. We use commodity derivative instruments such as futures, physical forward contracts, swaps and options to mitigate the commodity price risk associated with a portion of the forecasted purchases and sales of commodities and natural gas and natural gas liquids in storage.

Basis risk - We are exposed to the risk of loss in cash flows and future earnings arising from adverse changes in the price differentials between pipeline receipt and delivery locations. Our firm transportation capacity allows us to purchase gas at a pipeline receipt point and sell gas at a pipeline delivery point. Our Energy Services segment periodically enters into basis swaps between the transportation receipt and delivery points in order to protect the fair value of these location price differentials related to our firm commitments.

Currency exchange rate risk - As a result of our Energy Services segment’s activities in Canada, we are exposed to the risk of loss in cash flows and future earnings from adverse changes in currency exchange rates on our commodity purchases and sales primarily related to our firm transportation and storage contracts that are transacted in a currency other than our functional currency, the U.S. dollar. To reduce our exposure to exchange-rate fluctuations, we use physical forward transactions, which result in an actual two-way flow of currency on the settlement date in which we exchange U.S. dollars for Canadian dollars with another party.

The following derivative instruments are used to manage our exposure to these risks:

·	Futures contracts - Standardized exchange-traded contracts to purchase or sell natural gas and crude oil at a specified price, requiring delivery on or settlement through the sale or purchase of an offsetting contract by a specified future date under the provisions of exchange regulations.

·	Forward contracts - Commitments to purchase or sell natural gas, crude oil or NGLs for delivery at some specified time in the future. Forward contracts are different from futures in that forwards are customized and non-exchange traded.

Swaps - Financial trades involving the exchange of payments based on two different pricing structures for a commodity. In a typical commodity swap, parties exchange payments based on changes in the price of a commodity or a market index, while fixing the price they effectively pay or receive for the physical commodity. As a result, one party assumes the risks and benefits of movements in market prices, while the other party assumes the risks and benefits of a fixed price for the commodity.

·	Options - Contractual agreements that give the holder the right, but not the obligation, to buy or sell a fixed quantity of a commodity, at a fixed price, within a specified period of time. Options may either be standardized, exchange traded or customized and non-exchange traded.

Our objectives for entering into such contracts include, but are not limited to:

·	reducing the variability of cash flows by locking in the price for all or a portion of anticipated index-based physical purchases and sales, transportation fuel requirements, asset management transactions and customer-related business activities;

·	locking in a price differential to protect the fair value between transportation receipt and delivery points and to protect the fair value of natural gas or NGLs that are purchased in one month and sold in a later month; and

·	reducing our exposure to fluctuations in foreign currency exchange rates.

Our Energy Services segment also enters into derivative contracts for financial trading purposes primarily to capitalize on opportunities created by market volatility, weather-related events, supply-demand imbalances and market liquidity

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inefficiency, which allows us to capture additional margin. Financial trading activities are executed generally using financially settled derivatives and are normally short term in nature.

With respect to the net open positions that exist within our marketing and financial trading operations, fluctuating commodity prices can impact our financial position and results of operations. The net open positions are actively managed, and the impact of the changing prices on our financial condition at a point in time is not necessarily indicative of the impact of price movements throughout the year.

Our Distribution segment also uses derivative instruments to hedge the cost of anticipated natural gas purchases during the winter heating months to protect our customers from upward volatility in the market price of natural gas. The use of these derivative instruments and the associated recovery of these costs have been approved by the OCC, KCC and regulatory authorities in certain of our Texas jurisdictions.

We are also subject to fluctuation in interest rates. We manage interest-rate risk through the use of fixed-rate debt, floating-rate debt and interest-rate swaps. Interest-rate swaps are agreements to exchange an interest payment at some future point based on the differential between two interest rates.

Accounting Treatment

We record derivative instruments at fair value, with the exception of normal purchases and normal sales that are expected to result in physical delivery. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it.

If certain conditions are met, we may elect to designate a derivative instrument as a hedge of exposure to changes in fair values, cash flows or foreign currency. Certain non-trading derivative transactions, which are economic hedges of our accrual transactions, such as our storage and transportation contracts, do not qualify for hedge accounting treatment.

The table below summarizes the various ways in which we account for our derivative instruments and the impact on our consolidated financial statements:

Accounting Treatment		Recognition and Measurement
Accounting Treatment		Balance Sheet		Income Statement
Normal purchases and normal sales	-	Fair value not recorded	-	Change in fair value not recognized in earnings
Mark-to-market	-	Recorded at fair value	-	Change in fair value recognized in earnings
Cash flow hedge	-	Recorded at fair value	-	Ineffective portion of the gain or loss on the derivative instrument is recognized in earnings
	-	Effective portion of the gain or loss on the derivative instrument is reported initially as a component of accumulated other comprehensive income (loss)	-	Effective portion of the gain or loss on the derivative instrument is reclassified out of accumulated other comprehensive income (loss) into earnings when the forecasted transaction affects earnings
Fair value hedge	-	Recorded at fair value	-	The gain or loss on the derivative instrument is recognized in earnings
	-	Change in fair value of the hedged item is recorded as an adjustment to book value	-	Change in fair value of the hedged item is recognized in earnings

Gains or losses associated with the fair value of derivative instruments entered into by our Distribution segment are included in, and recoverable through, the monthly purchased-gas cost mechanism.

We formally document all relationships between hedging instruments and hedged items, as well as risk management objectives, strategies for undertaking various hedge transactions and methods for assessing and testing correlation and hedge ineffectiveness. We specifically identify the asset, liability, firm commitment or forecasted transaction that has been designated as the hedged item. We assess the effectiveness of hedging relationships quarterly by performing a regression analysis on our cash flow and fair value hedging relationships to determine whether the hedge relationships are highly effective on a retrospective and prospective basis. We also document our normal purchases and normal sales transactions that we expect to result in physical delivery and which we elect to exempt from derivative accounting treatment.

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The presentation of settled derivative instruments on either a gross or net basis in our Consolidated Statements of Income is dependent on the relevant facts and circumstances of our different types of activities rather than based solely on the terms of the individual contracts. All financially settled derivative instruments, as well as derivative instruments considered held for trading purposes that result in physical delivery, are reported on a net basis in revenues in our Consolidated Statements of Income. The realized revenues and purchase costs of derivative instruments that are not considered held for trading purposes and non-derivative contracts are reported on a gross basis. Derivatives that qualify as normal purchases or normal sales that are expected to result in physical delivery are also reported on a gross basis.

Revenues in our Consolidated Statements of Income include financial trading margins, as well as certain physical natural gas transactions with our trading counterparties. Revenues and cost of sales and fuel from such physical transactions are reported on a net basis.

Cash flows from futures, forwards, options and swaps that are accounted for as hedges are included in the same Consolidated Statements of Cash Flows category as the cash flows from the related hedged items.

Fair Values of Derivative Instruments

Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. See Note B for a discussion of the inputs associated with our fair value measurements and our fair value hierarchy disclosures.

The following table sets forth the fair values of our derivative instruments for the period indicated:

	September 30, 2009
	Fair Values of Derivatives (a)
	Assets		(Liabilities)
	(Thousands of dollars)
Derivative commodity contracts designated as hedging
instruments	$	739,304	$	(511,691	)

Derivatives not designated as hedging instruments
Commodity contracts		213,505		(211,667	)
Foreign exchange contracts		14		(195	)
Total derivatives not designated as hedging instruments		213,519		(211,862	)
Total derivatives	$	952,823	$	(723,553	)

(a) - Included on a net basis in energy marketing and risk management assets and liabilities on our Consolidated Balance Sheet.

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The following table sets forth the notional quantities for derivative instruments held for the period indicated:

	September 30, 2009
	Contract Type	Purchased/ Payor		Sold/ Receiver
Derivatives designated as hedging instruments:
Cash flow hedges
Fixed price
- Natural gas (Bcf)	Exchange futures		8.3		(27.1	)
	Swaps		15.3		(87.8	)
- Crude oil and NGLs (MMBbl)	Swaps		-		(1.5	)
Basis
- Natural gas (Bcf)	Swaps		22.2		(113.0	)
Fair value hedges
Basis
- Natural gas (Bcf)	Forwards and swaps		283.5		(283.5	)

Derivatives not designated as hedging instruments:
Fixed price
- Natural gas (Bcf)	Exchange futures		34.1		(17.1	)
	Forwards and swaps		74.2		(91.1	)
	Options		113.6		(89.2	)
- Foreign currency (Millions of dollars)	Swaps	$	6.1	$	-
Basis
- Natural gas (Bcf)	Forwards and swaps		937.5		(965.0	)
Index
- Natural gas (Bcf)	Forwards and swaps		70.7		(43.7	)

These notional amounts are used to summarize the volume of financial instruments. However, they do not reflect the extent to which the positions offset one another and consequently do not reflect our actual exposure to market or credit risk.

Cash Flow Hedges - Our Energy Services and ONEOK Partners segments use derivative instruments to hedge the cash flows associated with anticipated purchases and sales of natural gas, NGLs and condensate and cost of fuel used in the transportation of natural gas. Accumulated other comprehensive income (loss) at September 30, 2009, includes losses of approximately $9.2 million, net of tax, related to these hedges that will be realized within the next 25 months as the forecasted transactions affect earnings. If prices remain at current levels, we will recognize $5.4 million in net losses over the next 12 months, and we will recognize net losses of $3.8 million thereafter.

For the nine months ended September 30, 2009, cost of sales and fuel in our Consolidated Statements of Income includes $11.3 million reflecting an adjustment to inventory at the lower of cost or market. We reclassified $11.3 million of deferred gains, before income taxes, on associated cash flow hedges from accumulated other comprehensive income (loss) into earnings.

The following table sets forth the effect of cash flow hedges recognized in other comprehensive income (loss) for the periods indicated:

Derivatives in Cash Flow Hedging Relationships	Three Months Ended September 30, 2009				Nine Months Ended September 30, 2009
		(Thousands of dollars)
Commodity contracts		$	(32,603	)		$	33,642
Interest rate contracts			1,035				1,599
Total gain (loss) recognized in other comprehensive income (loss) on derivatives (effective portion)		$	(31,568	)		$	35,241

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The following tables set forth the effect of cash flow hedges on our Consolidated Statements of Income for the periods indicated:

	Location of Gain (Loss) Reclassified from
Derivatives in Cash Flow Hedging Relationships	Accumulated Other Comprehensive Income	Three Months Ended			Nine Months Ended
Derivatives in Cash Flow Hedging Relationships	(Loss) into Net Income (Effective Portion)	September 30, 2009			September 30, 2009
		(Thousands of dollars)
Commodity contracts	Revenues	$	37,640		$	151,512
Commodity contracts	Cost of sales and fuel		(9,529	)		(20,707	)
Interest rate contracts	Interest expense		365			1,237
Total gain (loss) reclassified from accumulated other comprehensive income (loss) into net income on derivatives (effective portion)		$	28,476		$	132,042

	Location of Gain (Loss) Recognized in Income on
Derivatives in Cash Flow Hedging Relationships	Derivatives (Ineffective Portion and Amount	Three Months Ended			Nine Months Ended
Derivatives in Cash Flow Hedging Relationships	Excluded from Effectiveness Testing)	September 30, 2009			September 30, 2009
		(Thousands of dollars)
Commodity contracts	Revenues	$	(1,597	)	$	1,223
Commodity contracts	Cost of sales and fuel		120			(627	)
Total gain (loss) recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)		$	(1,477	)	$	596

Ineffectiveness related to our cash flow hedges resulted in gains of approximately $1.2 million for the three months ended September 30, 2008. Ineffectiveness related to our cash flow hedges resulted in losses of approximately $0.6 million for the nine months ended September 30, 2008. In the event that it becomes probable that a forecasted transaction will not occur, we will discontinue cash flow hedge treatment, which will affect earnings. For the three and nine months ended September 30, 2009 and 2008, there were no gains or losses due to the discontinuance of cash flow hedge treatment since the underlying transactions were no longer probable.

Other Derivative Instruments - The following table sets forth the effect of our derivative instruments that are not part of a hedging relationship on our Consolidated Statements of Income for the periods indicated:

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss)	Three Months Ended September 30, 2009		Nine Months Ended September 30, 2009
		(Thousands of dollars)
Commodity contracts - trading	Revenues	$	46	$	3,455
Commodity contracts - non-trading (a)	Cost of gas and fuel		7,441		9,378
Foreign exchange contracts	Revenues		462		785
Total gain (loss) recognized in income on derivatives		$	7,949	$	13,618
(a) - For the three and nine months ended September 30, 2009, we recognized $1.8 million and $3.9 million, respectively, of losses associated with the fair value of derivative instruments entered into by our Distribution segment that were deferred as they are included in, and recoverable through, the monthly purchased-gas cost mechanism.

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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. Interest expense savings from the amortization of terminated swaps for the three months ended September 30, 2009 and 2008, were $2.5 million and $2.6 million, respectively. Interest expense savings from the amortization of terminated swaps for the nine months ended September 30, 2009 and 2008, were $7.7 million and $7.8 million, respectively, and the remaining amortization of terminated swaps will be recognized over the following periods:

			ONEOK
	ONEOK		Partners		Total
	(Millions of dollars)
Remainder of 2009	$	1.6	$	0.9	$	2.5
2010	$	6.4	$	3.7	$	10.1
2011	$	3.4	$	0.9	$	4.3
2012	$	1.7	$	-	$	1.7
2013	$	1.7	$	-	$	1.7
2014	$	1.7	$	-	$	1.7
Thereafter	$	23.6	$	-	$	23.6

ONEOK and ONEOK Partners had no interest-rate swap agreements at September 30, 2009.

Our Energy Services segment uses basis swaps to hedge the fair value of location price differentials related to certain firm transportation commitments. Net gains or losses from the fair value hedges and ineffectiveness are recorded to cost of sales and fuel. The ineffectiveness related to these hedges included gains of $1.2 million and losses of $3.6 million for the three months ended September 30, 2009 and 2008, respectively. The ineffectiveness related to these hedges included gains of $0.5 million and losses of $3.2 million for the nine months ended September 30, 2009 and 2008, respectively.

For the three and nine months ended September 30, 2009, cost of sales and fuel in our Consolidated Statements of Income include gains of $53.4 million and $231.7 million, respectively, related to the change in fair value of derivatives declared as fair value hedges. Revenues include losses of $52.2 million and $231.3 million for the three and nine months ended September 30, 2009, respectively, to recognize the change in fair value of the hedged firm commitments.

Credit Risk - We monitor the creditworthiness of our counterparties and compliance with management’s risk tolerance as determined by our Risk Oversight and Strategy Committee. We maintain credit policies with regard to our counterparties that we believe minimize overall credit risk. These policies include an evaluation of potential counterparties’ financial condition (including credit ratings, bond yields and credit default swap rates), collateral requirements under certain circumstances and the use of standardized master-netting agreements that allow us to net the positive and negative exposures associated with a single counterparty. We have counterparties whose credit is not rated and for those customers, we use internally developed credit ratings.

Some of our derivative instruments contain provisions that require us to maintain an investment grade credit rating from S&P and/or Moody’s. If our credit ratings on senior unsecured long-term debt were to decline below investment grade, we would be in violation of these provisions, and the counterparties to the derivative instruments could request collateralization on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with contingent features related to credit risk that were in a net liability position as of September 30, 2009, was $29.5 million for which we have posted collateral of $17.7 million in the normal course of business. If the contingent features underlying these agreements were triggered on September 30, 2009, we would have been required to post an additional $11.8 million of collateral to our counterparties.

The counterparties to our derivative contracts consist primarily of major energy companies, LDCs, electric utilities, financial institutions and commercial and industrial end-users. This concentration of counterparties may impact our overall exposure to credit risk, either positively or negatively, in that the counterparties may be similarly affected by changes in economic, regulatory or other conditions. Based on our policies, exposures, credit and other reserves, we do not anticipate a material adverse effect on our financial position or results of operations as a result of counterparty nonperformance.

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The following table sets forth the net credit exposure from our derivative assets for the period indicated:

	September 30, 2009
	Investment		Non-investment		Not
	Grade		Grade		Rated
Counterparty sector	(Thousands of dollars)
Gas and electric utilities	$	44,222	$	4,723	$	9,145
Oil and gas		62,036		358		5,982
Industrial		1,346		-		6