Gathering, processing and marketing acquisitions in 1999 and2000 propelled ONEOK, Inc. to 36%, 42% and 44% increases in netincome, earnings per share and operating income respectively lastyear over 1999, the company said in announcing financial resultsTuesday.

Net income totaled $145.6 million; earnings per diluted sharewere $2.96 and operating income tallied $333.9 million in 2000.

“The Company’s strategy of growth through unregulatedacquisitions that strengthen and complement each other continued topay off this year for shareholders,” said David Kyle, chairman andCEO. “ONEOK’s operating results for fiscal 2000 were primarilyimpacted by two major acquisitions made in March and April of 2000valued at nearly $850 million. They included natural gas gathering,processing, transmission and storage assets and a natural gasmarketing and trading operation all located in the mid-continentarea,” said Kyle.

Operating income for Oneok’s marketing was up 112% to $51.3million, based primarily on the addition of Kinder Morgan’smarketing and trading operation last April, gas price volatilityand the company’s ability to successfully execute itstransportation and storage arbitrage strategy. Sales volumesaveraged 2.7 Bcf/d with margins of 6.4 cents per Mcf during fiscal2000.

Gathering and processing’s operating income increased to $110.8million from $21.7 million, which represents a 411% increase.

Transportation and storage’s operating income increased to $62.2million from $60.4 million. Transportation revenues improvedprimarily due to increased throughput and fees. The impact ofincreased volumes transported was offset by lower rates. Storagerevenues increased due in part to increased storage capacityacquired during the year.

Operating income for distribution units, Oklahoma Natural GasAnd Kansas Gas, decreased to $97.9 million from $103.3 million. Thedecrease is due in part to a rate decrease in Oklahoma followingunbundling and significantly warmer than normal weather in early2000 when Kansas did not have weather normalization.

Operating income for the production division decreased 16% to$15.2 million from $18 million. The favorable impact of slightlyhigher hedged natural gas and oil prices was offset by lowerproduction resulting from normal declines and the lack ofavailability of drilling rigs for developmental drilling. Operatingincome was also impacted by increased production taxes due tohigher prices. ONEOK’s hedged positions prevented productionoperations from benefiting from higher gas prices.

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