EQUITY
Sep. 30, 2026
Noncontrolling Interests - As of September 30, 2026, noncontrolling interests within total equity in our Consolidated Balance Sheets related to Ascension, MBTC Pipeline and the Class B Units discussed below.
ONEOK Holdings Transaction - On September 10, 2026, we announced the closing of the ONEOK Holdings Transaction. In connection with the ONEOK Holdings Transaction, we completed a Reorganization whereby a newly formed company, Falcon TopCo, became the successor to Legacy ONEOK and was renamed ONEOK, Inc. As part of the Reorganization, Legacy ONEOK merged with and into Falcon Merger Sub, with Falcon Merger Sub surviving the merger as ONEOK, L.L.C. Upon completion of the Reorganization, each outstanding share of Legacy ONEOK common stock automatically converted into an equivalent corresponding share of ONEOK common stock. The Reorganization was accounted for as a common control transaction and does not represent a change in the reporting entity.
Subsequent to the Reorganization and pursuant to the Contribution Agreement, (i) Apollo made a $9 billion cash contribution to ONEOK Holdings in exchange for Class B Units and became the sole Class B Member of ONEOK Holdings and (ii) ONEOK contributed the equity interests in ONEOK, L.L.C., which holds all of ONEOK’s operating entities, to ONEOK Holdings in exchange for Class A Units and became the sole Class A Member of ONEOK Holdings. All debt is held at ONEOK, L.L.C. and the Class B investment is structurally subordinated to the debt.
After the Reorganization and the ONEOK Holdings Transaction, ONEOK’s structure is as follows:
The Class A Units entitle ONEOK to receive total cash available for distribution after the payment of quarterly distributions to the Class B Member. The Class A Units also provide us with the right to appoint and remove all members of the board of managers of ONEOK Holdings. We also control quarterly distributions, subject to required distributions if we declare a common dividend, repurchase common stock, or otherwise return capital to public shareholders, or if a special distribution is declared by ONEOK Holdings. ONEOK, L.L.C. can at any time distribute cash to ONEOK for the payment of taxes. ONEOK Holdings is a consolidated subsidiary of ONEOK, and the Class B Units are presented as noncontrolling interests within total equity in our Consolidated Balance Sheets because we, through ownership of the Class A Units, retain control over ONEOK Holdings and there are no redemption rights that require settlement in cash outside of our control.
Subject to our right to approve a distribution, the Class B Units provide the Class B Member with certain quarterly distributions equal to a percentage of CFFO, payable no later than the third business day following February 15, May 15, August 15 and November 15 of each year. During the Initial Period, the Class B Member distributions are equal to 15% (or up to 20%, at our discretion) of CFFO, with the remainder distributed to us. The distribution percentage is equal to 20% of CFFO during the periods in which our leverage ratio, as defined in the Operating Agreement, exceeds 4.5 to 1. The Class B Units also provide the Class B Member with certain protective consent rights over specified actions outside the ordinary course of business of ONEOK Holdings. Such rights are limited to ONEOK Holdings and do not extend to ONEOK or ONEOK, L.L.C. The Class B Units do not provide the Class B Member with a stated liquidation preference in ONEOK Holdings.
The Class B Units limit the Class B Member to the applicable Base Return on the $9 billion initial investment. Income is attributed to the Class B Units consistent with the contractual terms specified within the Operating Agreement, which includes the Class B Units sharing in earnings up to the stated Base Return. Income is attributed to the Class B Units as the then-applicable Base Return is earned on the outstanding investment balance and is recorded as income attributable to noncontrolling interests in our Consolidated Statements of Income. Distributions received by the Class B Member in excess of the income attribution are treated as a return of capital and reduce the carrying amount of its investment.
Following the ONEOK Holdings Transaction, we recorded a one-time noncash income tax benefit of $336 million during the quarter ended September 30, 2026, due primarily to the remeasurement of deferred tax balances and the release of valuation allowances on certain state net operating losses and tax credit carryforwards that are more likely than not to be utilized prior to their expiration. The tax benefit was recorded as a discrete event in the quarter. Our estimated annualized effective tax rate before the discrete event did not have a material change. As a result of the discrete event, the annual effective tax rate for the nine months ended September 30, 2026, decreased to 14.2%.
The Operating Agreement provides us with the right to purchase all outstanding Class B Units. Prior to the 15th anniversary of the investment, the purchase price equals the amount necessary for the Class B Member to achieve the then-applicable Base Return (the Buyout Amount); provided that, prior to the eighth anniversary of the investment, we may exercise this right only after the Class B investment balance has been reduced to $200 million. From the 15th anniversary through the 20th anniversary, the purchase price equals 115% of the Buyout Amount. Thereafter, we may purchase the Class B Units during specified buyout periods pursuant to the Operating Agreement.
The Operating Agreement provides the Class B Member with certain rights upon a change of control. Upon (i) a change of control of ONEOK that is approved by the board of directors and (ii) a ratings downgrade of an acquiring company’s or ONEOK’s senior unsecured long-term indebtedness to below investment grade or such ratings being withdrawn or otherwise no longer rated by the applicable rating agency or certain other actions of an acquiring company, the Class B Member may require the Class A Member to purchase all Class B Units at the then-applicable Buyout Amount, if on or before the 15th anniversary, or 115% of the Buyout Amount if thereafter.
The Operating Agreement also provides the Class B Member with an equity conversion right. Following the 20th anniversary of the investment and once the outstanding Class B investment balance has been reduced to $200 million, the Class B Member may elect to convert all outstanding Class B Units into a variable number of shares of publicly traded common equity of ONEOK subject to an explicit limit on the number of shares issued.
Common Dividends - Holders of our common stock share equally in any common stock dividends declared by our Board of Directors. Dividends paid on our common stock in February, May and August 2026 were $1.07 per share. We declared a quarterly common stock dividend of $1.07 per share in October 2026. The quarterly common stock dividend will be paid on November 16, 2026, to shareholders of record at the close of business on November 2, 2026.