OKE 10-Q filed 2026-10-28 | Key takeaways
OKE filed its 10-Q; the most relevant disclosure change is added Business combinations: The Brazos Midland Acquisition was completed on October 6, 2026, for total cash consideration of approximately $4.6 billion; acquisition in Natural Gas Gathering and Processing segment expected to more than double Midland Basin natural gas processing capacity.
Key takeaways
ONEOK Holdings Transaction: Apollo invested $9B for Class B Units in ONEOK Holdings, with distributions to Class B Member equal to 15% of CFFO during the Initial Period; company used $5B to repay existing indebtedness.
Brazos Midland Acquisition: Closed October 6, 2026 for $4.6B total cash consideration ($4.425B announced price plus ~$135M closing adjustments), more than doubling Midland Basin natural gas processing capacity to ~2.3 Bcf/d.
Debt extinguishment: In September 2026, the company completed $5.5B of debt extinguishments, including $2.5B of senior notes repurchased in tender offers for $2.0B and repayment of $1.2B Term Loan and $800M commercial paper.
Tax benefit: One-time noncash income tax benefit of $336M recorded due to remeasurement of deferred tax balances and release of valuation allowances following the ONEOK Holdings Transaction; effective tax rate for nine months ended September 30, 2026 decreased to 14.2%.
Segment performance: Q3 2026 adjusted EBITDA - Natural Gas Gathering and Processing $563M (-$3M YoY), Natural Gas Liquids $718M (-$30M YoY), Natural Gas Pipelines $231M (+$31M YoY), Refined Products and Crude $685M (+$103M YoY).
Impairment charge: $60M noncash impairment recorded in Q1 2026 related to 50% investment in Powder Springs in Refined Products and Crude segment.
Dividend: Quarterly common stock dividend of $1.07 per share declared in October 2026, payable November 16, 2026 to shareholders of record November 2, 2026.
Key metrics
Disclosure changes
- Business combinations
The Brazos Midland Acquisition was completed on October 6, 2026, for total cash consideration of approximately $4.6 billion; acquisition in Natural Gas Gathering and Processing segment expected to more than double Midland Basin natural gas processing capacity to approximately 2.3 Bcf/d.
Major acquisition expanding Permian Basin presence with significant processing capacity addition. - Noncontrolling interests
Following the September 10, 2026 closing of the ONEOK Holdings Transaction, Apollo made a $9B cash contribution to ONEOK Holdings for Class B Units; noncontrolling interests increased to $9.144B as of September 30, 2026.
Significant structural change creating Class B Units with distributions equal to 15% of CFFO during Initial Period. - Debt extinguishments
In September 2026, the company extinguished $5.5B of debt including $1.2B Term Loan, $800M commercial paper, $750M due November 2026, $250M due September 2027, and $2.5B of senior notes through tender offers.
Significant debt reduction using Apollo transaction proceeds; leverage ratio improved to 3.4x. - Income taxes
One-time noncash income tax benefit of $336M recorded due to remeasurement of deferred tax balances and release of valuation allowances following the ONEOK Holdings Transaction; effective tax rate for nine months decreased to 14.2%.
Discrete tax benefit positively impacted Q3 and nine-month net income; normalized effective tax rate not materially changed. - Impairment of equity investments
$60M noncash impairment charge recorded in Q1 2026 related to 50% investment in Powder Springs in Refined Products and Crude segment.
Impairment related to equity-method investment in Powder Springs logistics joint venture. - Equity
Reorganization completed where Legacy ONEOK merged into Falcon Merger Sub (renamed ONEOK L.L.C.) and Falcon TopCo became successor ONEOK Inc.; total equity increased to $32.460B as of September 30, 2026.
Structural reorganization as part of ONEOK Holdings Transaction; significant increase in total equity due to $9B contribution from Apollo.
Primary source
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