Revenues of $17,948 million came in 19.9% above the $14,975 million estimate, but the gap is commodity-price pass-through: operating costs and expenses rose to $15,985 million from $10,366 million alongside it.
Earnings per common unit of $0.75 landed on the $0.746 estimate, 0.5% ahead, and up 21% year over year.
Total gross operating margin rose 15% to $2,735 million with three of the four segments higher; NGL Pipelines & Services led at $1,535 million against $1,303 million.
Volumes set records across the system: Permian processing inlet of 4.6 Bcf/d, total inlet of 8,543 MMcf/d, equivalent pipeline volumes of 14,837 MBPD and marine terminal volumes of 2,535 MBPD, up 28%.
The one thing that matters: the 49% revenue jump is price moving through the marketing book rather than growth, and the release says as much. The figure that carries the quarter is gross operating margin at $2,735 million on record volumes, while earnings per unit landed essentially on the estimate.
Key metrics
Metric
Reported
Prior year
Change
Adjusted EBITDA
$2.8 billion
—
up 16%
Total gross operating margin
$2.7 billion
—
increased 15 percent
Operational DCF
$2.3 billion
—
up 27%
Distribution coverage
1.9x coverage of distributions declared for 3Q 2026
—
—
Permian natural gas processing inlet volumes
4.6 Bcf/d
—
up 12%
Equivalent pipeline volumes
14.8 MMBPD
—
up 7%
Guidance changes
Item
New guidance
Prior guidance
2026 growth capital spending, net of $600 million of proceeds from asset sales
in the range of $2.9 to $3.4 billion
—
2026 sustaining capital expenditures
$650 million
—
Growth capital projects under construction
$6.3 billion, beginning commercial operations between now and 2028
—
Quality of earnings
Net income grew faster than the operating business. Net income attributable to common unitholders rose 21% to $1,624 million against 16% Adjusted EBITDA growth to $2,789 million, helped by Other, net of $50 million against $11 million a year ago.
Distribution coverage leans on a one-off collection. Operational DCF of $2,311 million gave 1.9 times coverage, and the footnote shows $100 million of that came from collecting trade receivables tied to income recognised in a prior period.
Cash conversion is genuinely strong. Operating cash flow of $2,185 million exceeded $1,624 million of net income to common unitholders, and Adjusted FCF reached $1,365 million against $96 million a year ago.
Gotchas & watch items
The revenue beat is price, not throughput: WTI averaged $85.79 per barrel in the quarter against $64.93 a year ago and Mont Belvieu NGLs $0.69 per gallon against $0.56, which is why revenues and cost of sales moved together.
Free cash flow is better than the release lets on: total capital investments fell to $1,064 million from $1,962 million, and that drop rather than earnings growth is what took Adjusted FCF to $1,365 million from $96 million.
One segment went backwards: Crude Oil Pipelines & Services gross operating margin slipped to $367 million from $371 million despite pipeline volumes up 48 MBPD, with Texas crude pipelines and marketing down $14 million on higher operating costs.
Natural gas marketing is carrying an unhelpful mark: mark-to-market losses in Natural Gas Pipelines & Services gross operating margin were $26 million in the quarter, so the segment's rise to $411 million from $339 million understates the underlying improvement.