Kinetik Holdings (NYSE: KNTK) lifts 2026 EBITDA view after record Q2
Rhea-AI Filing Summary
Kinetik Holdings Inc. reported record results for the quarter ended June 30, 2026, with net income including noncontrolling interest of $123.1 million and Adjusted EBITDA of $280.8 million. Distributable Cash Flow was $194.9 million and Free Cash Flow was $105.2 million, supporting a quarterly dividend of $0.81 per share and a 1.47x dividend coverage ratio.
The company raised full‑year 2026 Adjusted EBITDA guidance to $1.04–$1.1 billion, with the revised midpoint 7% above the original 2026 outlook and about 15% higher year‑over‑year pro forma the EPIC Crude divestiture. 2026 capital expenditure guidance increased to approximately $560 million, reflecting the Kings Landing II processing expansion, ECCC Pipeline expansion plans, optimization projects, and long‑lead equipment for further capacity.
Midstream Logistics Adjusted EBITDA rose 35% year‑over‑year in the quarter, while Pipeline Transportation Adjusted EBITDA declined 14% due to the prior EPIC Crude sale. Net leverage metrics remained moderate, with strong liquidity and ongoing investment in Permian‑to‑Gulf Coast growth projects.
Positive
- Raised 2026 Adjusted EBITDA guidance to $1.04–$1.1 billion, with the midpoint 7% above the original outlook and about 15% higher year-over-year pro forma the EPIC Crude divestiture.
- Record Q2 2026 performance with net income including noncontrolling interest of $123.1 million, Adjusted EBITDA of $280.8 million, and Free Cash Flow of $105.2 million, all supporting a 1.47x dividend coverage ratio on a $0.81 per-share payout.
- Midstream Logistics strength demonstrated by a 35% year-over-year increase in segment Adjusted EBITDA in Q2 2026, reflecting improved recoveries, optimization, and favorable commodity pricing while volumes were stable despite curtailments.
Negative
- None.
Insights
Analyzing...
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net income including noncontrolling interest Q2 2026: $123.1 million
Adjusted EBITDA Q2 2026: $280.8 million
Distributable Cash Flow Q2 2026: $194.9 million
+5 more
8 metrics
Net income including noncontrolling interest Q2 2026
$123.1 million
Three months ended June 30, 2026
Adjusted EBITDA Q2 2026
$280.8 million
Three months ended June 30, 2026
Distributable Cash Flow Q2 2026
$194.9 million
Three months ended June 30, 2026
Free Cash Flow Q2 2026
$105.2 million
Three months ended June 30, 2026
2026 Adjusted EBITDA guidance
$1.04–$1.1 billion
Full-year 2026 guidance range
2026 capital expenditures guidance
approximately $560 million
Full-year 2026 capex including maintenance
Dividend per share
$0.81
Dividend per share of issued and outstanding common stock
Dividend coverage ratio Q2 2026
1.47x
Distributable Cash Flow divided by total declared dividends
Key Terms
Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, Dividend Coverage Ratio, +2 more
6 terms
Adjusted EBITDA financial
"Kinetik generated Adjusted EBITDA1 of $280.8 million and $532.0 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Distributable Cash Flow financial
"Distributable Cash Flow1 of $194.9 million and $375.8 million"
Distributable cash flow is the amount of money a business generates from its operations that management considers available to pay dividends, buy back shares, or make other distributions to owners after setting aside what’s needed to keep the business running and meet routine obligations. Investors care because it shows how much real cash can be returned to them—like a household’s leftover paycheck after paying rent and groceries—and helps judge whether payouts are sustainable and backed by operations rather than accounting entries.
Free Cash Flow financial
"Free Cash Flow1 of $105.2 million and $206.6 million"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
Dividend Coverage Ratio financial
"Dividend Coverage Ratio 1,3 was 1.47x for the quarter"
Dividend coverage ratio measures how many times a company’s earnings can pay for its dividend — calculated by dividing profits (or earnings per share) by the dividend paid per share. It tells investors whether a dividend is comfortably covered or at risk, similar to checking whether your monthly paycheck is big enough to cover a recurring allowance; a higher ratio suggests the dividend is safer and leaves room for growth or downturns.
Net Debt financial
"Net Debt 1,4 was $3,940,170 as of June 30, 2026"
Net debt is the total amount a company owes after subtracting the cash and assets it has that can be used to pay off that debt. It shows how much debt is truly a burden, helping investors understand if a company is financially healthy or heavily borrowed. Think of it like calculating how much money you owe after using your savings to pay part of it.
Final investment decision financial
"reached final investment decision for Kings Landing II ("KLII")"
A final investment decision is the point at which a person or organization chooses to move forward with a particular project or purchase after reviewing all the necessary information and options. It is like deciding to buy a house after considering all the costs, benefits, and alternatives. This decision is important because it determines whether and when the investment will be made, impacting future financial plans and outcomes.
Earnings Snapshot
Total operating revenues Q2 2026: $581.4 million · Guidance included
Three and six months ended June 30, 2026
Total operating revenues Q2 2026
$581.4 million
up from $426.7 million in Q2 2025
Net income including noncontrolling interest Q2 2026
$123.1 million
up from $74.4 million in Q2 2025
Adjusted EBITDA Q2 2026
$280.8 million
up from $242.9 million in Q2 2025
Distributable Cash Flow Q2 2026
$194.9 million
up from $153.3 million in Q2 2025
Free Cash Flow Q2 2026
$105.2 million
up from $34.9 million in Q2 2025
2026 Adjusted EBITDA guidance
$1.04–$1.1 billion
midpoint 7% above original 2026 guidance and ~15% higher year-over-year pro forma EPIC Crude
Guidance
Kinetik expects 2026 Adjusted EBITDA between $1.04 and $1.1 billion, Capital Expenditures of approximately $560 million, Q3 2026 Adjusted EBITDA of $260–$270 million, and Q4 2026 Adjusted EBITDA of $270–$280 million, based on modest curtailments and higher processed gas volumes.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What were Kinetik Holdings (KNTK) key financial results for Q2 2026?
Kinetik reported Q2 2026 net income including noncontrolling interest of $123.1 million and Adjusted EBITDA of $280.8 million. Distributable Cash Flow was $194.9 million and Free Cash Flow was $105.2 million for the quarter, supporting its common dividend.
How did Kinetik Holdings (KNTK) change its full-year 2026 guidance?
Kinetik increased its 2026 Adjusted EBITDA guidance to $1.04–$1.1 billion. The revised midpoint is a 7% increase over the original 2026 guidance and about a 15% year-over-year increase pro forma the EPIC Crude divestiture, reflecting stronger volumes and margins.
What is Kinetik Holdings (KNTK) 2026 capital expenditure outlook?
Kinetik now expects approximately $560 million of 2026 capital expenditures, including maintenance. Spending is driven by the Kings Landing II processing expansion, ECCC Pipeline expansion work, system optimization projects, and long-lead equipment for the next processing capacity expansion.
How strong is Kinetik Holdings (KNTK) dividend coverage and payout?
For Q2 2026, Kinetik generated Distributable Cash Flow of $194.9 million and paid a $0.81 per-share dividend, resulting in a dividend coverage ratio of 1.47x. For the first half of 2026, coverage was 1.41x, indicating solid cash support for the dividend.
What major growth projects is Kinetik Holdings (KNTK) advancing?
Kinetik reached final investment decision on Kings Landing II, a sour gas processing expansion with total capital of about $260 million and expected completion in mid-2028. It also placed the ECCC Pipeline in service and continues the Diamond Volt 40 MW power project.
How did Kinetik Holdings (KNTK) operating segments perform in Q2 2026?
In Q2 2026, Midstream Logistics Adjusted EBITDA rose 35% year-over-year to $204.8 million. Pipeline Transportation Adjusted EBITDA declined 14% to $83.0 million, primarily due to the late-2025 divestiture of Kinetik’s equity interest in EPIC Crude.
What are Kinetik Holdings (KNTK) leverage and liquidity levels?
As of June 30, 2026, Kinetik reported Net Debt of $3,940,170 (in thousands), a Leverage Ratio of 3.85x, and total liquidity of $1,072,230 (in thousands) combining cash and Revolving Credit Facility availability, supporting its ongoing capital program and dividend.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
___________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging growth company | ||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On August 5, 2026, Kinetik Holdings Inc. issued a press release announcing financial and operating results for the fiscal quarter ended June 30, 2026. The full text of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information in this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of Section 18, and shall not be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibits are being filed herewith.
Exhibit No. | Description of Exhibit | |||||||
99.1 | Press Release of Kinetik Holdings Inc. dated August 5, 2026 | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Kinetik Holdings Inc. | |||||||||||
Dated: | /s/ Steven Stellato | ||||||||||
Steven Stellato | |||||||||||
Executive Vice President, Chief Accounting and Chief Administrative Officer | |||||||||||
Kinetik Reports Record Second Quarter 2026 Results and Raises Full Year 2026 Guidance
HOUSTON and MIDLAND, Texas, August 5, 2026 – Kinetik Holdings Inc. (NYSE: KNTK) (“Kinetik” or the “Company”) today reported record results for the quarter ended June 30, 2026 and increased its full year 2026 Adjusted EBITDA1 guidance.
Kinetik reported net income including noncontrolling interest of $123.1 million and $118.0 million for the three and six months ended June 30, 2026, respectively. Kinetik generated Adjusted EBITDA1 of $280.8 million and $532.0 million, Distributable Cash Flow1 of $194.9 million and $375.8 million, and Free Cash Flow1 of $105.2 million and $206.6 million for the three and six months ended June 30, 2026, respectively.
Highlights
•Record financial results in the second quarter of 2026, supported by outstanding operational execution, robust system performance, and commodity margin outperformance
•Final investment decision for Kings Landing II (“KLII”), expanding system processing capacity to 2.7 Bcf/d in 2028
•ECCC Pipeline placed into service, enhancing north-to-south system connectivity, with right-of-way procurement now underway to support an anticipated expansion in 2027
•Secured incremental firm Gulf Coast market access for residue gas, commencing in 2027 and providing producer customers with premium pricing options
•Executed new residue and natural gas liquids transport agreements, strengthening egress capacity portfolio and netback pricing for Delaware North processing complexes
•Board authorization of long-lead equipment procurement for the next processing capacity expansion beyond KLII, proactively aligning supply chain with accelerating customer development plans
•Increasing full year 2026 Financial Guidance:
◦Adjusted EBITDA1 guidance of $1.04 billion to $1.1 billion, reflecting stronger volumes, improved margins, and operational performance
◦Capital Expenditures2 guidance of approximately $560 million (including maintenance), driven by KLII, accelerated producer development into late 2026 and early 2027, optimization projects across operations, procurement of long-lead equipment for Kinetik’s next processing capacity expansion, and right-of-way procurement for an expansion of ECCC Pipeline
CEO Commentary
“Kinetik delivered exceptional second quarter 2026 results, significantly exceeding expectations,” said Jamie Welch, Kinetik’s President & Chief Executive Officer. “Our performance during the quarter demonstrates the strength and resilience of our integrated business model, the quality and diversification of our asset footprint, and our continued strong operational performance, which enabled Kinetik to deliver the strongest financial results in Company history.”
“We advanced numerous initiatives this quarter, including reaching final investment decision (“FID”) on KLII, completing the ECCC Pipeline with right-of-way procurement beginning for an anticipated 2027 expansion, and commencing drilling operations at the Kings Landing acid gas injection (“AGI”) well. Furthermore, we have initiated procurement of long-lead equipment for the next processing plant after KLII given updated development plans and new customer commitments.”
Welch added, “The increase to our 2026 Adjusted EBITDA1 guidance reflects not only outperformance in the first half of the year, but also an increase relative to original expectations for the remainder of the year. We now anticipate Adjusted EBITDA1 to be between $260 million and $270 million in the third quarter and $270 million to $280 million in the fourth quarter.”
“Momentum is building across our system and is expected to be a strong tailwind into 2027. Curtailments have eased, customer activity is pulling forward, and the market increasingly recognizes the critical role the Permian Basin plays in meeting growing U.S. natural gas demand, anchored by LNG exports and data center developments. Kinetik is exceptionally well positioned to capitalize on this structural growth, reinforcing our tremendous confidence in 2027 and beyond.”
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Financial Highlights
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2026 | 2026 | |||||||||||||
| (In thousands, except ratios) | ||||||||||||||
| Net income including noncontrolling interest | $ | 123,113 | $ | 117,988 | ||||||||||
Adjusted EBITDA1 | $ | 280,784 | $ | 531,984 | ||||||||||
Midstream Logistics Adjusted EBITDA1 | $ | 204,766 | $ | 383,687 | ||||||||||
Pipeline Transportation Adjusted EBITDA1 | $ | 83,001 | $ | 160,978 | ||||||||||
Corporate and Other Adjusted EBITDA1 | $ | (6,983) | $ | (12,681) | ||||||||||
Distributable Cash Flow1 | $ | 194,924 | $ | 375,755 | ||||||||||
Dividend Coverage Ratio1,3 | 1.47x | 1.41x | ||||||||||||
Capital Expenditures2 | $ | 106,019 | $ | 197,352 | ||||||||||
Free Cash Flow1 | $ | 105,203 | $ | 206,584 | ||||||||||
Net Debt1,4 | $ | 3,940,170 | ||||||||||||
Liquidity (Cash and Revolver Availability)5 | $ | 1,072,230 | ||||||||||||
Leverage Ratio1,6 | 3.85x | |||||||||||||
Net Debt to Adjusted EBITDA Ratio1,7 | 3.84x | |||||||||||||
Common stock issued and outstanding8 | 162,375 | |||||||||||||
Dividend per share of issued and outstanding Common stock | $ | 0.81 | ||||||||||||
Segment Insights
The Midstream Logistics segment generated Adjusted EBITDA1 of $204.8 million, a 35% increase year-over-year for the three months ended June 30, 2026. Kinetik processed natural gas volumes of 1.74 Bcf/d in the second quarter of 2026, flat year-over-year despite an estimated 250 MMcf/d of Waha price-related processed gas volume shut-ins. Second quarter 2026 results benefited from strong system operating performance, improved natural gas liquid (“NGL”) recoveries and condensate yields, optimization opportunities, and favorable commodity prices and spreads.
The Pipeline Transportation segment generated Adjusted EBITDA1 of $83.0 million, a 14% decrease year-over-year for the three months ended June 30, 2026, due to the Company’s divestiture in late 2025 of its equity interest in EPIC Crude Holdings, LP (“EPIC Crude”). Permian Highway Pipeline outperformed year-over-year on lower fuel costs and higher gross margin. Additionally, Shin Oak outperformed expectations due to more robust throughput volumes.
Raising 2026 Outlook and Guidance
Kinetik is increasing its full year 2026 Adjusted EBITDA1 guidance to be between $1.04 billion and $1.1 billion. The revised midpoint represents a 7% increase from the original 2026 guidance issued in February and an approximately 15% increase year-over-year pro forma the EPIC Crude divestiture.9
Updated Adjusted EBITDA1 guidance assumes:
•Approximately 25 MMcf/d of curtailments on average for the second half of 2026;
•2026 processed gas volume exit rate10 of nearly 2.2 Bcf/d, an increase of approximately 20% exit-to-exit; and
•Updated full year 2026 average commodity prices11 of $78.65 per barrel for WTI, $2.83 per MMBtu for Houston Ship Channel natural gas, ($0.26) per MMBtu for Waha Hub natural gas, and $0.62 per gallon for composite NGLs.
Kinetik is also increasing its 2026 Capital Expenditures2 guidance (including maintenance) to approximately $560 million to reflect:
•FID of KLII;
•Acceleration of customer development plans into late 2026 and early 2027;
•Optimization projects across operations;
•Purchase of long-lead equipment items relating to the next processing capacity expansion; and
•Right-of-way procurement for an expansion of ECCC Pipeline.
2
Strategic Projects & Commercial Activity
In May 2026, Kinetik reached FID on KLII. Upon completion, total Delaware North sour gas processing capacity will exceed 700 MMcf/d. Processing, amine, and residue compression equipment has been purchased. Total capital is expected to be approximately $260 million. KLII is now expected to be completed in mid-2028, earlier than previously communicated.
The ECCC Pipeline was placed into service, establishing a north-to-south connection across the western portion of Kinetik's system between Eddy and Culberson Counties. Rich gas throughput volumes on the pipeline are expected to increase throughout the balance of the year as Kings Landing I reaches full utilization. Given ECCC Pipeline utilization expectations and continued customer growth in New Mexico, Kinetik has initiated right-of-way procurement to support an expansion.
Following approval of all permitting earlier this year, the Company's acid gas injection and sour conversion project remains on schedule with site construction activities and drilling operations underway. Project in-service is expected by year-end 2026.
Kinetik continues to make progress on Diamond Volt, its 40 MW behind-the-meter power generation project at the Diamond Cryo Complex, with in-service anticipated in the second quarter of 2027.
Kinetik’s Board of Directors has also approved the purchase of long-lead equipment for a processing expansion beyond KLII, positioning the Company to keep pace with its customer growth as overall activity has continued to increase. These investments reinforce Kinetik's confidence in the long-term growth of its business.
Several commercial initiatives were recently executed that further strengthen Kinetik’s integrated Permian-to-Gulf Coast platform, address demand needs, and expand market optionality.
The Company secured firm access to additional Gulf Coast netback residue gas pricing in 2027, enhancing its integrated residue gas offering and providing its customers with premium price assurance.
Kinetik also signed residue gas and NGL transportation agreements for its Delaware North processing complexes, providing diversified market access, improving customer netbacks, and increasing operational flexibility. These agreements support continued customer growth and strengthen the outlook for Kinetik’s existing and expanding Delaware North processing capacity.
Conference Call & Webcast
Kinetik will host its second quarter 2026 results conference call on Thursday, August 6, 2026 at 8:00 am Central Time (9:00 am Eastern Time). To access a live webcast of the conference call, please visit the Investors section of Kinetik’s website at www.ir.kinetik.com. A replay of the conference call will be available on the website following the call.
Investor Presentation
An updated investor presentation will be available under Events and Presentations in the Investors section of the Company’s website at www.ir.kinetik.com. Information on the Company’s website does not constitute a portion of, and is not incorporated by reference into, this press release.
About Kinetik Holdings Inc.
Kinetik is a fully integrated, pure-play, Permian-to-Gulf Coast midstream C-corporation operating in the Delaware Basin. Kinetik is headquartered in Houston and Midland, Texas. Kinetik provides comprehensive gathering, transportation, compression, processing and treating services for companies that produce natural gas, natural gas liquids, crude oil and water. Kinetik posts announcements, operational updates, investor information and press releases on its website, www.kinetik.com.
Investor Contact
Alex Durkee
Shyam Patel
(713) 493-0900
3
investors@kinetik.com
Forward-looking statements
This news release includes certain statements that may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts, outlooks, guidance or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “seeks,” “possible,” “potential,” “predict,” “project,” “prospects,” “guidance,” “outlook,” “should,” “would,” “will,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements about the Company’s future business strategy and plans, expectations, and objectives for the Company’s operations, including statements about strategy, synergies, technology adoption, portfolio monetization opportunities, growth, expansion, cost reduction and other capital projects and the timing and cost thereof, future operations, financial guidance, growth opportunities, the amount and timing of future shareholder returns, the Company’s projected dividend amounts and the timing thereof, and the Company’s targeted leverage and financial profile. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 26, 2026. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement whether as a result of new information, future development, or otherwise, except as may be required by law.
Additional information
Additional information follows, including a reconciliation of Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, and Net Debt (non-GAAP financial measures) to the GAAP measures.
Non-GAAP financial measures
Kinetik’s financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP financial information. It is management’s intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, Dividend Coverage Ratio, Net Debt and Leverage Ratio are non-GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated. See “Reconciliation of GAAP to Non-GAAP Measures” elsewhere in this news release. This news release also includes certain forward-looking non-GAAP financial information. Reconciliations of these forward-looking non-GAAP measures to their most directly comparable GAAP measure are not available without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various reconciling items that would impact the most directly comparable forward-looking GAAP financial measure, that have not yet occurred, are out of Kinetik’s control and/or cannot be reasonably predicted. Accordingly, such reconciliation is excluded from this news release. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
1.A non-GAAP financial measure. See “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Measures” for further details.
2.Net of contributions in aid of construction, asset disposal proceeds, and returns of invested capital from unconsolidated affiliates.
3.Dividend Coverage Ratio is Distributable Cash Flow divided by total declared dividends.
4.Net Debt is defined as total current and long-term debt, excluding deferred financing costs, less cash and cash equivalents.
5.Liquidity is calculated as cash and cash equivalents of $7.8 million plus Revolving Credit Facility availability of $1,064.4 million as of June 30, 2026.
6.Leverage Ratio is total debt less cash and cash equivalents divided by last twelve months Adjusted EBITDA, calculated per the Company’s credit agreement. The calculation includes EBITDA Adjustments for Qualified Projects, Acquisitions and Divestitures.
7.Net Debt to Adjusted EBITDA Ratio is defined as Net Debt divided by last twelve months Adjusted EBITDA.
8.162.4 million shares, issued and outstanding shares as of June 30, 2026, is the sum of 78.9 million shares of Class A common stock and 83.4 million shares of Class C common stock.
4
9.2025 Adjusted EBITDA, excluding actual Adjusted EBITDA contributions from EPIC Crude.
10.Exit rate represents average processed gas volumes during the fourth quarter of 2026.
11.Market forward pricing as of July 28, 2026.
5
KINETIK HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||||||||
| Operating revenues: | ||||||||||||||||||||||||||
| Service revenue | $ | 86,891 | $ | 112,654 | $ | 180,663 | $ | 240,580 | ||||||||||||||||||
| Product revenue | 490,800 | 311,590 | 803,033 | 624,095 | ||||||||||||||||||||||
| Other revenue | 3,749 | 2,494 | 7,720 | 5,326 | ||||||||||||||||||||||
| Total operating revenues | 581,440 | 426,738 | 991,416 | 870,001 | ||||||||||||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||||||||
Costs of sales (excluding depreciation and amortization) (1) | 237,592 | 156,697 | 426,316 | 380,061 | ||||||||||||||||||||||
| Operating expenses | 71,922 | 68,045 | 142,223 | 131,648 | ||||||||||||||||||||||
| Ad valorem taxes | 8,393 | 6,559 | 17,168 | 13,350 | ||||||||||||||||||||||
| General and administrative expenses | 26,261 | 24,244 | 70,461 | 61,836 | ||||||||||||||||||||||
| Depreciation and amortization expenses | 103,331 | 93,763 | 205,164 | 186,436 | ||||||||||||||||||||||
| Gain on disposal of assets, net | (36) | (25) | (55) | (65) | ||||||||||||||||||||||
| Total operating costs and expenses | 447,463 | 349,283 | 861,277 | 773,266 | ||||||||||||||||||||||
| Operating income | 133,977 | 77,455 | 130,139 | 96,735 | ||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest and other income | 297 | 2,732 | 464 | 3,517 | ||||||||||||||||||||||
| Loss on debt extinguishment | — | (635) | — | (635) | ||||||||||||||||||||||
| Interest expense | (54,121) | (56,514) | (107,541) | (112,228) | ||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | 57,383 | 58,705 | 108,571 | 116,183 | ||||||||||||||||||||||
| Total other income, net | 3,559 | 4,288 | 1,494 | 6,837 | ||||||||||||||||||||||
| Income before income taxes | 137,536 | 81,743 | 131,633 | 103,572 | ||||||||||||||||||||||
| Income tax expense | 14,423 | 7,327 | 13,645 | 9,894 | ||||||||||||||||||||||
| Net income including noncontrolling interest | 123,113 | 74,416 | 117,988 | 93,678 | ||||||||||||||||||||||
| Net income attributable to Common Unit limited partners | 73,574 | 50,771 | 70,116 | 63,903 | ||||||||||||||||||||||
| Net income attributable to holders of Class A Common Stock | $ | 49,539 | $ | 23,645 | $ | 47,872 | $ | 29,775 | ||||||||||||||||||
| Net income attributable to holders of Class A Common Stock, per share | ||||||||||||||||||||||||||
| Basic | $ | 0.65 | $ | 0.33 | $ | 0.62 | $ | 0.38 | ||||||||||||||||||
| Diluted | $ | 0.64 | $ | 0.33 | $ | 0.61 | $ | 0.38 | ||||||||||||||||||
| Weighted-average shares | ||||||||||||||||||||||||||
| Basic | 75,138 | 61,721 | 70,550 | 60,946 | ||||||||||||||||||||||
| Diluted | 75,812 | 62,228 | 71,449 | 61,693 | ||||||||||||||||||||||
(1)Cost of sales (exclusive of depreciation and amortization) is net of gas service revenues totaling $110.6 million and $73.6 million for the three months ended June 30, 2026 and 2025, respectively, and $212.8 million and $135.8 million for the six months ended June 30, 2026 and 2025, respectively, for certain volumes where we act as principal.
6
KINETIK HOLDINGS INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| Net Income Including Noncontrolling Interests to Adjusted EBITDA | ||||||||||||||||||||||||||
| Net income including noncontrolling interest (GAAP) | $ | 123,113 | $ | 74,416 | $ | 117,988 | $ | 93,678 | ||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||
| Interest expense | 54,121 | 56,514 | 107,541 | 112,228 | ||||||||||||||||||||||
| Income tax expense | 14,423 | 7,327 | 13,645 | 9,894 | ||||||||||||||||||||||
| Depreciation and amortization expenses | 103,331 | 93,763 | 205,164 | 186,436 | ||||||||||||||||||||||
| Amortization of contract costs | 2,054 | 1,655 | 4,004 | 3,310 | ||||||||||||||||||||||
| Proportionate EBITDA from unconsolidated affiliates | 74,878 | 88,100 | 144,907 | 175,630 | ||||||||||||||||||||||
| Share-based compensation | 9,064 | 9,695 | 29,727 | 30,348 | ||||||||||||||||||||||
| Loss on debt extinguishment | — | 635 | — | 635 | ||||||||||||||||||||||
| Integration costs | — | 2,433 | 368 | 5,971 | ||||||||||||||||||||||
| Litigation costs | 5,375 | 2,381 | 16,988 | 5,396 | ||||||||||||||||||||||
| Other one-time costs or amortization | 1,739 | 2,805 | 3,353 | 6,396 | ||||||||||||||||||||||
| Deduct: | ||||||||||||||||||||||||||
Interest income | 297 | 318 | 464 | 1,108 | ||||||||||||||||||||||
Gain on disposal of assets, net | 36 | 25 | 55 | 65 | ||||||||||||||||||||||
| Commodity hedging unrealized gain | 49,598 | 37,743 | 2,611 | 19,616 | ||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | 57,383 | 58,705 | 108,571 | 116,183 | ||||||||||||||||||||||
Adjusted EBITDA(1) (non-GAAP) | $ | 280,784 | $ | 242,933 | $ | 531,984 | $ | 492,950 | ||||||||||||||||||
Distributable Cash Flow(2) | ||||||||||||||||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 280,784 | $ | 242,933 | $ | 531,984 | $ | 492,950 | ||||||||||||||||||
| Proportionate EBITDA from unconsolidated affiliates | (74,878) | (88,100) | (144,907) | (175,630) | ||||||||||||||||||||||
| Returns on invested capital from unconsolidated affiliates | 61,913 | 63,604 | 130,222 | 126,941 | ||||||||||||||||||||||
| Interest expense | (54,121) | (56,514) | (107,541) | (112,228) | ||||||||||||||||||||||
| Unrealized gain on interest rate swaps | (2,476) | (741) | (5,822) | (1,411) | ||||||||||||||||||||||
| Maintenance capital expenditures | (16,298) | (7,879) | (28,181) | (20,338) | ||||||||||||||||||||||
Distributable cash flow (non-GAAP) | $ | 194,924 | $ | 153,303 | $ | 375,755 | $ | 310,284 | ||||||||||||||||||
Free Cash Flow(3) | ||||||||||||||||||||||||||
| Distributable cash flow (non-GAAP) | $ | 194,924 | $ | 153,303 | $ | 375,755 | $ | 310,284 | ||||||||||||||||||
| Growth capital expenditures | (91,088) | (123,498) | (171,315) | (189,210) | ||||||||||||||||||||||
| Investments in unconsolidated affiliates | — | (97) | — | (985) | ||||||||||||||||||||||
| Returns of invested capital from unconsolidated affiliates | — | 2,293 | — | 2,853 | ||||||||||||||||||||||
| Contributions in aid of construction | 1,367 | 2,914 | 2,144 | 3,339 | ||||||||||||||||||||||
Free cash flow (non-GAAP) | $ | 105,203 | $ | 34,915 | $ | 206,584 | $ | 126,281 | ||||||||||||||||||
7
KINETIK HOLDINGS INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)
| Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (In thousands) | ||||||||||||||
| Reconciliation of net cash provided by operating activities to Adjusted EBITDA | ||||||||||||||
| Net cash provided by operating activities | $ | 341,520 | $ | 305,907 | ||||||||||
| Net changes in operating assets and liabilities | 46,082 | 11,559 | ||||||||||||
| Interest expense | 107,541 | 112,228 | ||||||||||||
| Amortization of deferred financing costs | (3,913) | (3,984) | ||||||||||||
| Current income tax expense | 2 | 485 | ||||||||||||
| Returns on invested capital from unconsolidated affiliates | (130,222) | (126,941) | ||||||||||||
| Proportionate EBITDA from unconsolidated affiliates | 144,907 | 175,630 | ||||||||||||
| Derivative fair value adjustment and settlement | 8,433 | 21,027 | ||||||||||||
| Commodity hedging unrealized gain | (2,611) | (19,616) | ||||||||||||
| Interest income | (464) | (1,108) | ||||||||||||
| Integration costs | 368 | 5,971 | ||||||||||||
| Litigation costs | 16,988 | 5,396 | ||||||||||||
| Other one-time cost or amortization | 3,353 | 6,396 | ||||||||||||
Adjusted EBITDA(1) (non-GAAP) | $ | 531,984 | $ | 492,950 | ||||||||||
| June 30, | March 31, | December 31, | ||||||||||||||||||
| 2026 | 2026 | 2025 | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
Net Debt(4) | ||||||||||||||||||||
| Short-term debt | $ | 225,000 | $ | 187,100 | $ | 165,200 | ||||||||||||||
| Long-term debt, net | 3,700,562 | 3,644,128 | 3,627,720 | |||||||||||||||||
| Plus: Debt issuance costs, net | 22,438 | 23,872 | 25,280 | |||||||||||||||||
| Total debt | 3,948,000 | 3,855,100 | 3,818,200 | |||||||||||||||||
| Less: Cash and cash equivalents | 7,830 | 720 | 3,951 | |||||||||||||||||
Net debt (non-GAAP) | $ | 3,940,170 | $ | 3,854,380 | $ | 3,814,249 | ||||||||||||||
(1) Adjusted EBITDA is defined as net income including noncontrolling interest adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets and debt extinguishment, the proportionate EBITDA from our EMI pipelines, share-based compensation expense, noncash increases and decreases related to commodity hedging activities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges. Adjusted EBITDA provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance. Adjusted EBITDA should not be considered as an alternative to the GAAP measure of net income including non-controlling interest or any other measure of financial performance presented in accordance with GAAP.
(2) Distributable Cash Flow is defined as Adjusted EBITDA, adjusted for the proportionate EBITDA from unconsolidated affiliates, returns on invested capital from unconsolidated affiliates, interest expense, net of amounts capitalized, unrealized gains or losses on interest rate swaps and maintenance capital expenditures. Distributable Cash Flow should not be considered as an alternative to the GAAP measure of net income including non-controlling interest or any other measure of financial performance presented in accordance with GAAP. We believe that Distributable Cash Flow is a useful measure to compare cash generation performance from period to period and to compare the cash generation performance for specific periods to the amount of cash dividends we make.
(3) Free Cash Flow is defined as Distributable Cash Flow adjusted for growth capital expenditures, investments in unconsolidated affiliates, returns of invested capital from unconsolidated affiliates and contributions in aid of construction. Free Cash flow should not be considered as an alternative to the GAAP measure of net income including non-controlling interest or any other measure of financial performance presented in accordance with GAAP. We believe that Free Cash Flow is a useful performance measure to compare cash generation performance from period to period and to compare the cash generation performance for specific periods to the amount of cash dividends that we make.
(4) Net Debt is defined as total short-term and long-term debt, excluding deferred financing costs, premiums and discounts, less cash and cash equivalents. Net Debt illustrates our total debt position less cash on hand that could be utilized to pay down debt at the balance sheet date. Net Debt should not be considered as an alternative to the GAAP measure of total long-term debt, or any other measure of financial performance presented in accordance with GAAP.
8
KINETIK HOLDINGS INC.
RESULTS OF OPERATIONS BY SEGMENT
The following tables present the Segment Adjusted EBITDA of the Company’s reportable segments and reconciliations of the segment profits to consolidated income before income tax expenses for the three and six months ended June 30, 2026 and 2025:
| Midstream Logistics | Pipeline Transportation | Corporate and Other(1) | Elimination | Consolidated | ||||||||||||||||||||||||||||
| For the Three Months Ended June 30, 2026 | (In thousands) | |||||||||||||||||||||||||||||||
| Revenue | $ | 575,599 | $ | 2,092 | $ | — | $ | — | $ | 577,691 | ||||||||||||||||||||||
| Other revenue | 3,737 | 12 | — | — | 3,749 | |||||||||||||||||||||||||||
Intersegment revenue(2) | — | 6,556 | — | (6,556) | — | |||||||||||||||||||||||||||
| Total segment operating revenue | 579,336 | 8,660 | — | (6,556) | 581,440 | |||||||||||||||||||||||||||
| Costs of sales (excluding depreciation and amortization expense) | (238,087) | 495 | — | — | (237,592) | |||||||||||||||||||||||||||
| Intersegment costs of sales | (6,556) | — | — | 6,556 | — | |||||||||||||||||||||||||||
Operating expenses(3) | (79,512) | (803) | — | — | (80,315) | |||||||||||||||||||||||||||
| General and administrative expenses | (4,509) | (229) | (21,523) | — | (26,261) | |||||||||||||||||||||||||||
| Proportionate EMI EBITDA | — | 74,878 | — | — | 74,878 | |||||||||||||||||||||||||||
Other segment items(4) | (45,906) | — | 14,540 | — | (31,366) | |||||||||||||||||||||||||||
Segment Adjusted EBITDA(5) | $ | 204,766 | $ | 83,001 | $ | (6,983) | $ | — | $ | 280,784 | ||||||||||||||||||||||
| Reconciliation of Segment Adjusted EBITDA to income (loss) before income taxes | ||||||||||||||||||||||||||||||||
Segment Adjusted EBITDA(5) | $ | 204,766 | $ | 83,001 | $ | (6,983) | $ | — | $ | 280,784 | ||||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||||||
| Other interest income | — | — | 297 | — | 297 | |||||||||||||||||||||||||||
Gain on disposal of assets, net | 36 | — | — | — | 36 | |||||||||||||||||||||||||||
| Commodity hedging unrealized gain | 49,598 | — | — | — | 49,598 | |||||||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | — | 57,383 | — | — | 57,383 | |||||||||||||||||||||||||||
| Deduct: | ||||||||||||||||||||||||||||||||
| Interest expense | 55 | — | 54,066 | — | 54,121 | |||||||||||||||||||||||||||
| Depreciation and amortization expenses | 100,994 | 2,331 | 6 | — | 103,331 | |||||||||||||||||||||||||||
Contract assets amortization | 2,054 | — | — | — | 2,054 | |||||||||||||||||||||||||||
| Proportionate EMI EBITDA | — | 74,878 | — | — | 74,878 | |||||||||||||||||||||||||||
Share-based compensation | — | — | 9,064 | — | 9,064 | |||||||||||||||||||||||||||
| Litigation costs | — | — | 5,375 | — | 5,375 | |||||||||||||||||||||||||||
| Other one-time costs or amortization | 1,638 | — | 101 | — | 1,739 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 149,659 | $ | 63,175 | $ | (75,298) | $ | — | $ | 137,536 | ||||||||||||||||||||||
9
| Midstream Logistics | Pipeline Transportation | Corporate and Other(1) | Elimination | Consolidated | ||||||||||||||||||||||||||||
| For the Three Months Ended June 30, 2025 | (In thousands) | |||||||||||||||||||||||||||||||
| Revenue | $ | 421,813 | $ | 2,431 | $ | — | $ | — | $ | 424,244 | ||||||||||||||||||||||
| Other Revenue | 2,492 | 2 | — | — | 2,494 | |||||||||||||||||||||||||||
Intersegment revenue(2) | — | 7,674 | — | (7,674) | — | |||||||||||||||||||||||||||
| Total segment operating revenue | 424,305 | 10,107 | — | (7,674) | 426,738 | |||||||||||||||||||||||||||
| Costs of sales (excluding depreciation and amortization expense) | (156,263) | (434) | — | — | (156,697) | |||||||||||||||||||||||||||
| Intersegment costs of sales | (7,674) | — | — | 7,674 | — | |||||||||||||||||||||||||||
Operating expenses(3) | (73,888) | (716) | — | — | (74,604) | |||||||||||||||||||||||||||
| General and administrative expenses | (4,996) | (288) | (18,960) | — | (24,244) | |||||||||||||||||||||||||||
| Proportionate EMI EBITDA | — | 88,100 | — | — | 88,100 | |||||||||||||||||||||||||||
Other segment items(4) | (30,277) | — | 13,917 | — | (16,360) | |||||||||||||||||||||||||||
Segment Adjusted EBITDA(5) | $ | 151,207 | $ | 96,769 | $ | (5,043) | $ | — | $ | 242,933 | ||||||||||||||||||||||
| Reconciliation of Segment Adjusted EBITDA to income (loss) before income taxes | ||||||||||||||||||||||||||||||||
Segment adjusted EBITDA(5) | $ | 151,207 | $ | 96,769 | $ | (5,043) | $ | — | $ | 242,933 | ||||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||||||
| Other interest income | — | — | 318 | — | 318 | |||||||||||||||||||||||||||
| Gain on disposal of assets | 25 | — | — | — | 25 | |||||||||||||||||||||||||||
| Commodity hedging unrealized gain | 37,743 | — | — | — | 37,743 | |||||||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | — | 58,705 | — | — | 58,705 | |||||||||||||||||||||||||||
| Deduct: | ||||||||||||||||||||||||||||||||
| Interest expense | 32 | — | 56,482 | — | 56,514 | |||||||||||||||||||||||||||
| Depreciation and amortization expenses | 91,449 | 2,309 | 5 | — | 93,763 | |||||||||||||||||||||||||||
| Contract assets amortization | 1,655 | — | — | — | 1,655 | |||||||||||||||||||||||||||
| Proportionate EMI EBITDA | — | 88,100 | — | — | 88,100 | |||||||||||||||||||||||||||
| Share-based compensation | — | — | 9,695 | — | 9,695 | |||||||||||||||||||||||||||
| Loss on debt extinguishment | — | — | 635 | — | 635 | |||||||||||||||||||||||||||
| Integration costs | 1,972 | — | 461 | — | 2,433 | |||||||||||||||||||||||||||
| Litigation costs | — | — | 2,381 | — | 2,381 | |||||||||||||||||||||||||||
| Other one-time costs or amortization | 1,425 | — | 1,380 | — | 2,805 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 92,442 | $ | 65,065 | $ | (75,764) | $ | — | $ | 81,743 | ||||||||||||||||||||||
10
| Midstream Logistics | Pipeline Transportation | Corporate and Other(1) | Elimination | Consolidated | ||||||||||||||||||||||||||||
| For the Six Months Ended June 30, 2026 | (In thousands) | |||||||||||||||||||||||||||||||
| Revenue | $ | 979,319 | $ | 4,377 | $ | — | $ | — | $ | 983,696 | ||||||||||||||||||||||
| Other revenue | 7,698 | 22 | — | — | 7,720 | |||||||||||||||||||||||||||
Intersegment revenue(2) | — | 13,380 | — | (13,380) | — | |||||||||||||||||||||||||||
| Total segment operating revenue | 987,017 | 17,779 | — | (13,380) | 991,416 | |||||||||||||||||||||||||||
| Costs of sales (excluding depreciation and amortization expense) | (426,674) | 358 | — | — | (426,316) | |||||||||||||||||||||||||||
| Intersegment costs of sales | (13,380) | — | — | 13,380 | — | |||||||||||||||||||||||||||
Operating expenses(3) | (157,814) | (1,577) | — | — | (159,391) | |||||||||||||||||||||||||||
| General and administrative expenses | (10,019) | (489) | (59,953) | — | (70,461) | |||||||||||||||||||||||||||
| Proportionate EMI EBITDA | — | 144,907 | — | — | 144,907 | |||||||||||||||||||||||||||
Other segment items(4) | 4,557 | — | 47,272 | — | 51,829 | |||||||||||||||||||||||||||
Segment Adjusted EBITDA(5) | $ | 383,687 | $ | 160,978 | $ | (12,681) | $ | — | $ | 531,984 | ||||||||||||||||||||||
| Reconciliation of Segment Adjusted EBITDA to income (loss) before income taxes | ||||||||||||||||||||||||||||||||
Segment adjusted EBITDA(5) | $ | 383,687 | $ | 160,978 | $ | (12,681) | $ | — | $ | 531,984 | ||||||||||||||||||||||
Add back: | ||||||||||||||||||||||||||||||||
| Other interest income | — | — | 464 | — | 464 | |||||||||||||||||||||||||||
| Gain on disposal of assets | 55 | — | — | — | 55 | |||||||||||||||||||||||||||
| Commodity hedging unrealized gain | 2,611 | — | — | — | 2,611 | |||||||||||||||||||||||||||
| Equity income from unconsolidated affiliates | — | 108,571 | — | — | 108,571 | |||||||||||||||||||||||||||
Deduct: | ||||||||||||||||||||||||||||||||
| Interest expense | 103 | — | 107,438 | — | 107,541 | |||||||||||||||||||||||||||
| Depreciation and amortization expenses | 200,492 | 4,660 | 12 | — | 205,164 | |||||||||||||||||||||||||||
| Contract assets amortization | 4,004 | — | — | — | 4,004 | |||||||||||||||||||||||||||
| Proportionate EMI EBITDA | — | 144,907 | — | — | 144,907 | |||||||||||||||||||||||||||
| Share-based compensation | — | — | 29,727 | — | 29,727 | |||||||||||||||||||||||||||
| Integration costs | — | — | 368 | — | 368 | |||||||||||||||||||||||||||
| Litigation costs | — | — | 16,988 | — | 16,988 | |||||||||||||||||||||||||||
| Other one-time costs or amortization | 3,164 | — | 189 | — | 3,353 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 178,590 | $ | 119,982 | $ | (166,939) | $ | — | $ | 131,633 | ||||||||||||||||||||||
11
| Midstream Logistics | Pipeline Transportation | Corporate and Other(1) | Elimination | Consolidated | ||||||||||||||||||||||||||||
| For the Six Months Ended June 30, 2025 | (In thousands) | |||||||||||||||||||||||||||||||
| Revenue | $ | 859,838 | $ | 4,837 | $ | — | $ | — | $ | 864,675 | ||||||||||||||||||||||
| Other revenue | 5,322 | 4 | — | — | 5,326 | |||||||||||||||||||||||||||
Intersegment revenue(2) | — | 12,478 | — | (12,478) | — | |||||||||||||||||||||||||||
| Total segment operating revenue | 865,160 | 17,319 | — | (12,478) | 870,001 | |||||||||||||||||||||||||||
| Costs of sales (excluding depreciation and amortization expense) | (379,623) | (438) | — | — | (380,061) | |||||||||||||||||||||||||||
| Intersegment costs of sales | (12,478) | — | — | 12,478 | — | |||||||||||||||||||||||||||
Operating expenses(3) | (143,797) | (1,201) | — | — | (144,998) | |||||||||||||||||||||||||||
| General and administrative expenses | (12,121) | (660) | (49,055) | — | (61,836) | |||||||||||||||||||||||||||
| Proportionate EMI EBITDA | — | 175,630 | — | — | 175,630 | |||||||||||||||||||||||||||
Other segment items(4) | (5,736) | — | 39,950 | — | 34,214 | |||||||||||||||||||||||||||
Segment Adjusted EBITDA(5) | $ | 311,405 | $ | 190,650 | $ | (9,105) | $ | — | $ | 492,950 | ||||||||||||||||||||||
| Reconciliation of Segment Adjusted EBITDA to income (loss) before income taxes | ||||||||||||||||||||||||||||||||
Segment adjusted EBITDA(5) | $ | 311,405 | $ | 190,650 | $ | (9,105) | $ | — | $ | 492,950 | ||||||||||||||||||||||
Add back: | ||||||||||||||||||||||||||||||||
| Other interest income | — | — | 1,108 | — | 1,108 | |||||||||||||||||||||||||||
| Gain on disposal of assets, net | 65 | — | — | — | 65 | |||||||||||||||||||||||||||
| Equity income from unconsolidated affiliates | — | 116,183 | — | — | 116,183 | |||||||||||||||||||||||||||
| Commodity hedging unrealized gain | 19,616 | — | — | — | 19,616 | |||||||||||||||||||||||||||
Deduct: | ||||||||||||||||||||||||||||||||
| Interest expense | 60 | — | 112,168 | — | 112,228 | |||||||||||||||||||||||||||
| Depreciation and amortization expenses | 181,808 | 4,616 | 12 | — | 186,436 | |||||||||||||||||||||||||||
| Contract assets amortization | 3,310 | — | — | — | 3,310 | |||||||||||||||||||||||||||
| Proportionate EMI EBITDA | — | 175,630 | — | — | 175,630 | |||||||||||||||||||||||||||
| Share-based compensation | — | — | 30,348 | — | 30,348 | |||||||||||||||||||||||||||
| Loss on debt extinguishment | — | — | 635 | — | 635 | |||||||||||||||||||||||||||
| Integration costs | 4,447 | — | 1,524 | — | 5,971 | |||||||||||||||||||||||||||
| Litigation costs | — | — | 5,396 | — | 5,396 | |||||||||||||||||||||||||||
| Other one-time costs or amortization | 3,714 | — | 2,682 | — | 6,396 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 137,747 | $ | 126,587 | $ | (160,762) | $ | — | $ | 103,572 | ||||||||||||||||||||||
(1)Corporate and Other represents those results that: (i) are not specifically attributable to an operating segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items. Items are included here to reconcile the operating segments’ profit and loss with the Company’s consolidated results.
(2)The Company accounts for intersegment sales at market prices, while it accounts for asset transfers at book value. Intersegment revenue is eliminated at consolidation.
(3)Operating expenses includes ad valorem taxes.
(4)Other segment items include certain other income items, share-based compensation, adjustments related to amortization of contract costs, commodity hedging unrealized gain or loss, integration costs, litigation costs and other one-time costs or amortization.
(5)Adjusted EBITDA is defined as net income or loss including noncontrolling interest adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets, the proportionate EBITDA from our EMI pipelines, share-based compensation expense, noncash increases and decreases related to commodity hedging activities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges. Adjusted EBITDA provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance. Adjusted EBITDA should not be considered as an alternative to the GAAP measure of net income including non-controlling interest or any other measure of financial performance presented in accordance with GAAP.
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