Actuals vs. estimates

Highlights & what matters

• Revenues of $17.95 billion beat the $14.98 billion estimate by 19.9%, and GAAP earnings of $0.75 per common unit edged the $0.75 expected.
• Capital guidance held rather than moved: 2026 growth capital of $2.9-3.4 billion net of about $600 million of asset-sale proceeds, sustaining capital of about $650 million, and 2027 growth capital in the $3 billion area pending the budget cycle.
• Volumes set records across the chain: 14.8 million barrels per day equivalent through the pipeline system, 8.5 Bcf a day of processing inlet, and Permian plant inlet up 12% to 4.6 Bcf per day.
• The Permian production forecast was revised: wet natural gas and NGL growth through 2030 goes to 34% from the 23% forecast in April, while the crude forecast moved only 100,000 barrels per day by 2030.
• The one thing that matters: the gas-to-oil ratio revision, not the quarter, is the news - it raises the volume that feeds the NGL chain Enterprise already owns, and the two projects finishing this quarter put the capacity in place just as it arrives.

Guidance & KPIs

Management commentary

• This was Jim Teague's final quarterly call as co-chief executive; Randy Fowler becomes sole chief executive in January.
• Fowler attributed the quarter to Permian natural gas and NGL growth across the whole value chain, Haynesville pipeline volumes, demand for motor gasoline additives, and assets placed in service over the past 12 months.
• Corey Johnson said the higher gas-to-oil ratio forecast reflects both shallower gas decline curves on the producing base and a shift to drier, higher-ratio benches: 'Some of these benches typically will reach as high as 8, 9 GOR on IP, and these are the Woodfords and the Barnetts.'
• Management framed capital allocation as targeted organic growth instead of acquisitions at top-of-cycle multiples, citing higher and more consistent historical returns with fewer surprises.
• The debt book is long and fixed: about 17 years weighted average life, a 4.7% weighted average cost, and roughly 96% fixed rate on $33.7 billion outstanding.

Quality of earnings

• Cash is outrunning earnings. Distributable cash flow rose 27% against 16% adjusted EBITDA growth, leaving 1.9 times distribution coverage and $1.1 billion of retained cash flow reinvested in the partnership.
• The growth is organic rather than bought. $6.3 billion of sanctioned projects are under construction, with management explicitly declining acquisitions at top-of-cycle multiples; assets placed in service over the past 12 months include the 11th Delaware Basin plant, the Bahia NGL pipeline, Frac 14 and the second phase of Neches River.
• The payout is funded from inside the band. Consolidated leverage of 2.9 times sits within the 2.7-3.25 times target, liquidity is $4.8 billion, and $5.3 billion of capital returned over 12 months equals a 54% payout of adjusted cash flow from operations.

Gotchas & watch items

• The capital figure is a net number: 2026 growth capital of $2.9-3.4 billion is struck after roughly $600 million of asset-sale proceeds already received, so gross spend runs above the headline range.
• The 2027 capital plan is a placeholder at about $3 billion until the annual budget and producer plan review are done - the spend that serves the raised gas forecast is not yet committed.
• Two completions land in the fourth quarter rather than next year: a 300,000 barrel per day LPG export expansion taking Houston Ship Channel loading to about 1.1 million barrels per day, and Athena, a 300 million cubic feet per day Midland plant taking Permian processing to nearly 5 Bcf per day.
• Buybacks are running well below the distribution: $112 million of units repurchased in the quarter and $387 million year to date against $4.8 billion of distributions over 12 months, with the $5 billion authorisation only 36% used.

Last quarter's watch items: what happened

• No watch items on file from a prior quarter - this is the first tracked quarter for this company.

Next quarter: the 2-3 things that matter

• Permian plant inlet volumes against the raised gas forecast Baseline: Record 4.6 Bcf per day in Q3 2026, up 12% year over year, with a three-year CAGR of 19% Confirms: Q4 inlet above 4.8 Bcf per day with Athena in service and total Permian capacity near 5 Bcf per day Breaks: Inlet flat or below 4.5 Bcf per day Check in: Q4 2026. Source: Fowler remarks on processing volumes and page nine of the third quarter supplemental deck
• 2027 growth capital once the budget cycle closes Baseline: In the $3 billion area, against 2026 growth capital of $2.9-3.4 billion net of asset-sale proceeds Confirms: A 2027 figure at or above $3 billion with named projects attached Breaks: A 2027 figure below $2.5 billion, which would signal the gas forecast is not being built for Check in: Q4 2026. Source: Fowler capital expenditure remarks
• Distribution coverage as capital spending stays elevated Baseline: 1.9 times coverage in Q3 2026 with $1.1 billion retained and a 54% payout of adjusted cash flow from operations Confirms: Coverage at or above 1.7 times with the payout ratio under 60% Breaks: Coverage below 1.5 times or a payout above 70% Check in: Q4 2026. Source: Fowler remarks on distributions, buybacks and the 12-month payout ratio