GAAP diluted EPS of $2.13 beat the $1.46 consensus by $0.67 (46%), and was up from $1.49 a year ago; adjusted EBITDA rose 6% to $2.24 billion.
Full-year guidance raised again: adjusted EBITDA now $8.5 billion to $8.6 billion, net income $4.09 billion to $4.27 billion and diluted EPS at a $6.30 midpoint, now including the closed Brazos Permian Midland acquisition (about $50 million of adjusted EBITDA net of transaction costs).
Volume is the operating story: NGL raw feed throughput up 6% with Gulf Coast/Permian up 16%, refined products shipped 1,615 MBbl/d from 1,526, and Permian gas processed up 4%. Refined Products and Crude segment EBITDA rose to $685 million from $582 million.
The balance sheet changed shape in the quarter: the $9 billion minority equity investment closed, nearly $5.5 billion of debt principal was extinguished in September, and S&P and Fitch upgraded the credit to BBB+.
The one thing that matters: most of the EPS beat is a one-time $0.53 per share noncash tax benefit; without it EPS is $1.60, still ahead of the $1.46 consensus, on 6% EBITDA growth that itself carries a $53 million net one-time gain.
Key metrics
Metric
Reported
Prior year
Change
Diluted EPS
$2.13
$1.49
—
Adjusted EBITDA
$2.24 billion
—
up 6%
Net income attributable to ONEOK
$1.35 billion
$939 million
—
Gulf Coast/Permian NGL raw feed throughput
16% increase
—
+16%
Natural Gas Liquids segment adjusted EBITDA
$718 million
$748 million
—
Refined Products and Crude segment adjusted EBITDA
$685 million
$582 million
—
Guidance changes
Item
New guidance
Prior guidance
2026 adjusted EBITDA
$8.5 billion to $8.6 billion
—
2026 net income
$4.09 billion to $4.27 billion (midpoint $4.18 billion)
—
2026 earnings per diluted share
midpoint of $6.30
—
2026 total capital expenditures
approximately $3.5 billion
—
2026 expected Brazos Permian Midland contribution
approximately $75 million, with approximately $50 million in adjusted EBITDA net of transaction costs
—
Quality of earnings
The headline earnings growth is tax-driven. Net income rose 47% to $1,384 million from $940 million, but pre-tax income rose only 10% to $1,358 million from $1,237 million; the tax line swung to a $26 million benefit from $297 million of expense on the one-time reorganization benefit worth $0.53 per diluted share.
Adjusted EBITDA growth is a little flattered. Q3 includes a $53 million net benefit from the minority equity and Brazos Midland transactions, mainly gains on debt extinguishment, which lifted the Other line to $41 million from $23 million; underlying growth is closer to 3-4% than the reported 6%.
Share count is not doing the work: diluted shares were 632.6 million against 631.5 million a year ago, so per-share growth tracks the earnings, one-time items included.
Gotchas & watch items
Earnings now leak to minority holders: net income attributable to noncontrolling interests jumped to $34 million from $1 million after the $9 billion minority equity deal, a drag that runs every quarter from here.
NGLs went backwards despite record volume: Natural Gas Liquids segment EBITDA fell to $718 million from $748 million, with exchange services down $27 million including a $45 million hit from higher unfractionated NGL inventory.
Refined Products and Crude growth leans on marketing: $87 million of the segment's gain came from optimization and marketing, including $67 million of higher liquids blending earnings, a less recurring source than fee volumes.
Deleveraging is already in the run rate: interest expense fell to $415 million from $450 million even before a full quarter without the nearly $5.5 billion of debt retired in September.