Magellan Midstream (MMP) Risk Analysis

The Merger Agreement contains certain provisions that restrict our ability to directly or indirectly solicit competing acquisition proposals or to enter into discussions concerning, or provide confidential information in connection with, any proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal, and we have agreed to certain terms and conditions relating to our ability to engage in, continue or otherwise participate in any discussions with respect to, provide a third party confidential information with respect to or enter into any acquisition agreement with respect to certain unsolicited proposals that constitute or are reasonably likely to lead to a competing proposal. Further, even if our board changes, withdraws, modifies or qualifies its recommendation with respect to the Merger, unless the Merger Agreement has been terminated in accordance with its terms, we will still be required to submit the Merger proposal to a vote at our special meeting. The Merger Agreement further provides that, under specified circumstances, including in the event that we terminate the Merger Agreement in response to an acquisition proposal from a third party that our board determines constitutes a superior offer, we may be required to pay ONEOK a breakup fee of $275.0 million less any ONEOK expenses paid or up to $125.0 million of ONEOK's expenses. These provisions could discourage a potential third-party acquirer that might have an interest in us from considering or pursuing an alternative transaction with us or proposing such a transaction, even if it were prepared to pay consideration with a higher per share value than the total value proposed to be paid or received in the merger. These provisions might also result in a potential third-party acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.

ONEOK and Magellan are dependent on the experience and industry knowledge of their respective officers and other key employees to execute their business plans. The combined company's success after the Merger will depend in part upon its ability to retain key management personnel and other key employees of both ONEOK and Magellan. Current and prospective employees of ONEOK and Magellan may experience uncertainty about their roles within the combined company following the Merger or other concerns regarding the timing and completion of the Merger or the operations of the combined company following the Merger, any of which may have an adverse effect on the ability of ONEOK and Magellan to retain or attract key management and other key personnel. If ONEOK and Magellan are unable to retain personnel, including key management, who are critical to the future operations of the companies, ONEOK and Magellan could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment and training costs. In addition, the loss of key personnel could diminish the anticipated benefits of the Merger.

ONEOK or Magellan may elect to terminate the Merger Agreement in accordance with its terms in certain circumstances. If the Merger is not completed for any reason, including if the ONEOK shareholders or Magellan unitholders fail to approve the applicable proposals, the ongoing businesses of Magellan may be materially adversely affected and, without realizing any of the benefits of having completed the Merger, we would be subject to a number of risks, including the following: - Magellan may experience negative reactions from the financial markets, including negative impacts on our unit price;- Magellan and our subsidiaries may experience negative reactions from our respective customers, suppliers, vendors, landlords, joint venture co-members and other business relationships;- We will still be required to pay certain significant costs relating to the Merger, such as legal, accounting, financial advisor and printing fees;- We may be required to pay a termination fee as required by the Merger Agreement;- The Merger Agreement places certain restrictions on the conduct of the business pursuant to the terms of the Merger Agreement, which may delay or prevent us from undertaking business opportunities that, absent the Merger Agreement, may have been pursued;- Matters relating to the Merger (including integration planning) require substantial commitments of time and resources by our management, which may have resulted in the distraction of our management from ongoing business operations and pursuing other opportunities that could have been beneficial to us; and - Litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against Magellan to perform our obligations pursuant to the Merger Agreement.

We have incurred and are expected to continue to incur a number of non-recurring costs associated with negotiating and completing the Merger, combining the operations of the two companies and achieving desired synergies. These costs have been, and will continue to be, substantial and, in many cases, will be borne by us whether or not the Merger is completed. A substantial majority of non-recurring expenses will consist of transaction costs and include, among others, fees paid to financial, legal, accounting and other advisors, employee retention, severance and benefit costs, and filing fees. We will continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in connection with the Merger and the integration of the two companies' businesses. While we have assumed that a certain level of expenses would be incurred, there are many factors beyond our control that could affect the total amount or the timing of the expenses. The elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may not offset integration-related costs and achieve a net benefit in the near term, or at all.

Upon termination of the Merger Agreement under certain circumstances, Magellan may be required to reimburse ONEOK's expenses up to $125.0 million or pay ONEOK a termination fee equal to $275.0 million, less any expenses previously paid. If the Merger Agreement is terminated, the breakup fee required to be paid, if any, by us under the Merger Agreement may require us to seek loans to enable us to pay these amounts to ONEOK.