Index Changes - S&P 500 will add Interactive Brokers Group (IBKR) and remove Walgreens Boots Alliance (WBA) effective August 28, 2025 [1] - S&P MidCap 400 will add Talen Energy (TLN) and remove Interactive Brokers Group (IBKR) effective August 28, 2025 [1] - S&P SmallCap 600 will add Kinetik Holdings (KNTK) and remove Pacific Premier Bancorp (PPBI) effective September 2, 2025 [1] Acquisition Details - Walgreens Boots Alliance is being acquired by Sycamore Partners, with the deal expected to close soon [4] - Pacific Premier Bancorp is being acquired by Columbia Banking System, with the deal also expected to close soon [4]

Group 1 - The article emphasizes the focus on high-quality stocks with attractive valuations, specifically targeting companies with high return on equity and free cash flow [1] - Kinetik Holdings (NYSE: KNTK) is highlighted as a small-cap natural gas midstream company operating in the Permian Basin, which has been recently acquired by the company [1] - The presence of significant stakeholders such as Blackstone and ISQ Global in Kinetik Holdings indicates strong institutional support for the company [1] Group 2 - Thomas Lott, a seasoned financial professional with over 30 years of experience, advocates for Graham and Dodd/Buffett style investing, focusing on high-quality equities [2] - Lott's educational background includes a degree from Vanderbilt University and an MBA from Northwestern's Kellogg School of Management, enhancing his credibility in investment analysis [2]

[Glossary of Terms](index=3&type=section&id=GLOSSARY%20OF%20TERMS) The report includes a glossary defining key abbreviations and terms commonly used in the oil and natural gas industry - The report includes a glossary defining key abbreviations and terms commonly used in the oil and natural gas industry, such as **A/R Facility**, **ASC**, **ASU**, **Bbl**, **Bcf**, **Btu**, **CODM**, **Delaware Basin**, **EBITDA**, **Field**, **FASB**, **GAAP**, **MBbl**, **Mcf**, **MMBtu**, **MMcf**, **MVC**, **NGL**, **Throughput**, and **SEC**[9](index=9&type=chunk) [Forward-Looking Statements and Risk](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS%20AND%20RISK) This section outlines forward-looking statements and various risks, including acquisitions, market prices, competition, and regulatory changes, that could materially affect actual results - This section highlights that the report contains forward-looking statements regarding future financial position, business strategy, budgets, projected revenues, costs, and management objectives. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations[11](index=11&type=chunk) - Key risk factors include the ability to integrate acquisitions (**Barilla Draw** and **Durango**), market prices of oil, natural gas, and NGLs, competition, production rates, financial condition, access to capital, capital expenditures, risks associated with acquisitions/divestitures, construction risks, personnel retention, litigation, counterparty risk, regulatory and environmental developments, trade policy changes, extreme weather events, and the ability to achieve sustainability goals[11](index=11&type=chunk) - The Company disclaims any obligation to update or revise forward-looking statements, except as required by law, emphasizing that all such statements speak only as of the report's date[12](index=12&type=chunk) [Part I — Financial Information](index=6&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Kinetik Holdings Inc., including statements of operations, balance sheets, cash flows, and changes in equity and noncontrolling interests, along with detailed notes explaining significant accounting policies, business combinations, revenue recognition, debt, equity, and segment information [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This statement details Kinetik's operating revenues, costs, and net income, showing a significant increase in revenues but a decrease in net income attributable to Class A Common Stock for H1 2025 [Metric (In thousands, except per share data)](index=6&type=section&id=Metric%20(In%20thousands%2C%20except%20per%20share%20data)) | Metric (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total operating revenues | $426,738 | $359,457 | $870,001 | $700,851 | | Total operating costs and expenses | $349,283 | $302,869 | $773,266 | $618,162 | | Operating income | $77,455 | $56,588 | $96,735 | $82,689 | | Income before income taxes | $81,743 | $118,162 | $103,572 | $157,356 | | Net income including noncontrolling interest| $74,416 | $108,948 | $93,678 | $144,355 | | Net income attributable to Class A Common Stock | $23,645 | $37,192 | $29,775 | $48,742 | | Basic EPS | $0.33 | $0.54 | $0.38 | $0.68 | | Diluted EPS | $0.33 | $0.54 | $0.38 | $0.67 | - Total operating revenues increased by **19%** for the three months ended June 30, 2025, and by **24%** for the six months ended June 30, 2025, compared to the respective prior periods[15](index=15&type=chunk) - Net income attributable to Class A Common Stock decreased by **36.4%** for the three months and **38.8%** for the six months ended June 30, 2025, compared to the same periods in 2024[15](index=15&type=chunk) [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This statement provides a snapshot of Kinetik's financial position, showing increases in total assets and liabilities, alongside a significant improvement in total equity as of June 30, 2025 [Metric (In thousands)](index=7&type=section&id=Metric%20(In%20thousands)) | Metric (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total assets | $7,150,997 | $6,814,937 | | Total liabilities | $4,340,551 | $3,835,871 | | Total equity | $(1,565,658) | $(2,976,596) | - Total assets increased by approximately **$336 million** from December 31, 2024, to June 30, 2025, primarily due to increases in property, plant and equipment, and deferred tax assets[20](index=20&type=chunk) - Total liabilities increased by approximately **$504 million**, driven by increases in long-term debt and accrued expenses[20](index=20&type=chunk) - Total equity improved significantly, reducing the accumulated deficit from **$(2,976,596) thousand** to **$(1,565,658) thousand**[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This statement details Kinetik's cash flows from operating, investing, and financing activities, highlighting increased operating cash flow, significant cash used in investing, and a shift to cash provided by financing in H1 2025 [Metric (In thousands)](index=8&type=section&id=Metric%20(In%20thousands)) | Metric (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $305,907 | $279,222 | | Net cash (used in) provided by investing activities | $(391,604) | $43,302 | | Net cash provided by (used in) financing activities | $92,824 | $(314,485) | | Net change in cash | $7,127 | $8,039 | | Cash, end of period | $10,733 | $12,549 | - Net cash provided by operating activities increased by **$26.7 million**, or **9.6%**, for the six months ended June 30, 2025, compared to the same period in 2024[22](index=22&type=chunk) - Net cash used in investing activities significantly increased to **$(391.6) million** in 2025 from **$43.3 million** provided in 2024, primarily due to higher property, plant and equipment expenditures and net cash paid for acquisitions[22](index=22&type=chunk) - Net cash provided by financing activities shifted from a net use of **$(314.5) million** in 2024 to a net provision of **$92.8 million** in 2025, driven by net proceeds from long-term debt and revolving credit facilities, partially offset by increased dividends and share repurchases[22](index=22&type=chunk) [Condensed Consolidated Statements of Changes in Equity and Noncontrolling Interests](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY%20AND%20NONCONTROLLING%20INTERESTS) This statement outlines changes in Kinetik's equity, including a decrease in redeemable noncontrolling interest, share repurchases, net income attribution, and dividend payments during H1 2025 - The balance of Redeemable Noncontrolling Interest — Common Unit Limited Partners decreased from **$5,955,662 thousand** at December 31, 2024, to **$4,376,104 thousand** at June 30, 2025[27](index=27&type=chunk) - The Company repurchased **1,653 thousand shares** of Class A Common Stock for **$72,554 thousand** during the six months ended June 30, 2025[27](index=27&type=chunk) - Net income attributable to Class A Common Stock for the six months ended June 30, 2025, was **$29,775 thousand**[27](index=27&type=chunk) - Dividends on Class A Common Stock totaled **$95,663 thousand** for the six months ended June 30

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $243 million for the second quarter, with distributable cash flow of $153 million and free cash flow of $8 million [15] - Adjusted EBITDA guidance for 2025 has been revised to a range of $1,030 million to $1,090 million, reflecting a 5% decrease from previous estimates [16][20] - The company expects to achieve an annualized adjusted EBITDA of approximately $1,200 million in the fourth quarter of 2025, representing a 24% year-over-year growth [14] Business Line Data and Key Metrics Changes - The Midstream Logistics segment generated adjusted EBITDA of $151 million, up 3% year-over-year, primarily due to increased processed gas volumes from Northern Delaware assets [15] - The Pipeline Transportation segment also saw adjusted EBITDA of $97 million, up 3% year-over-year, benefiting from increased ownership in EPIC and modest outperformance at PHP [15] Market Data and Key Metrics Changes - The company has revised its full-year processed gas volume growth assumption from 20% to mid-teens due to delays in the commissioning of Kings Landing and producer development activities [16] - The company anticipates exiting 2025 with processed gas volumes at approximately 2 billion cubic feet per day [17] Company Strategy and Development Direction - The company is focused on expanding its footprint and volumes in Northern Delaware, with significant progress on capital growth projects [6][11] - The construction of the ECCC pipeline is expected to enhance the movement of sweet rich gas from New Mexico to Texas, with in-service anticipated in 2026 [10] - The company is pursuing both organic and inorganic growth opportunities, with a preference for organic growth at this time due to current market valuations [100] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance despite macroeconomic uncertainties and geopolitical pressures [6] - The company is optimistic about the potential for significant earnings growth and free cash flow generation through the end of the decade [14] - Management noted that while commodity price volatility has created headwinds, they expect to see a meaningful ramp in processed gas volumes as Kings Landing comes online [17][19] Other Important Information - The company has repurchased $173 million of its Class A common stock since May, representing nearly 2.5% of outstanding shares [21] - The company is experiencing significant cost inflation, particularly in electricity and leased compression, but expects unit costs to decrease as volumes ramp up [19] Q&A Session Summary Question: Can you walk through the building blocks to reach the $1,200 million run rate for Q4 2025? - Management explained that the building blocks include expected contributions from Kings Landing and other projects, with confidence in achieving the target despite some delays [28][30] Question: What is the expected cadence for share buybacks moving forward? - Management indicated that buybacks will depend on stock price and market conditions, with a focus on capital allocation based on fundamental value [34] Question: Can you provide insights on NGL recontracting and its potential timing? - Management noted that recontracting could occur earlier than expected due to increased interest from NGL pipeline operators [38][40] Question: What is the current status of Kings Landing 2 and its timeline for FID? - Management stated that they are midway through the process, with key components like acid gas injection and electricity being critical for progress [44] Question: How does the company view the macroeconomic environment and its impact on operations? - Management highlighted that while there are shifts in timing for producer activity, the overall quality of rock remains strong, and they expect to catch up with development plans [56][60] Question: How has the hedging strategy evolved in light of commodity price volatility? - Management indicated that they are more active in hedging and expect the impact of pricing to be relatively flat moving into 2026 [82] Question: What are the expectations for capital expenditures in the coming years? - Management emphasized the need to prioritize capital allocation carefully, focusing on high-return projects while managing overall spending [88][90]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported adjusted EBITDA of $243 million, distributable cash flow of $153 million, and free cash flow of $8 million [14] - The adjusted EBITDA guidance for 2025 has been revised to a range of $1.03 billion to $1.09 billion, reflecting a 5% decrease from previous estimates [15][19] - The company expects to achieve an annualized adjusted EBITDA of approximately $1.2 billion in Q4 2025, representing a 24% year-over-year growth [13] Business Line Data and Key Metrics Changes - The Midstream Logistics segment generated adjusted EBITDA of $151 million, up 3% year-over-year, driven by increased processed gas volumes from Northern Delaware assets [14] - The Pipeline Transportation segment also saw adjusted EBITDA of $97 million, up 3% year-over-year, benefiting from increased ownership in EPIC and modest outperformance at PHP [14] Market Data and Key Metrics Changes - The company has revised its full-year processed gas volume growth assumption from 20% to mid-teens due to delays in the commissioning of Kings Landing and producer development activities [15] - The company anticipates exiting 2025 with processed gas volumes at approximately 2 billion cubic feet per day [15] Company Strategy and Development Direction - The company is focused on expanding its footprint and volumes in Northern Delaware, with significant progress in capital growth projects [5][9] - The construction of the ECCC pipeline is critical for moving sweet rich gas from New Mexico to Texas, with expected in-service by 2026 [8] - The company is pursuing both organic and inorganic growth opportunities, emphasizing the importance of capital allocation towards high-return projects [12][96] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance despite macroeconomic uncertainties and geopolitical pressures [5] - The company is optimistic about the long-term growth potential, particularly with the commissioning of Kings Landing and the anticipated increase in processing capacity [12][19] - Management noted that while commodity price volatility has created headwinds, they expect to see a meaningful acceleration in adjusted EBITDA growth through the remainder of the year [19] Other Important Information - The company has repurchased $173 million of its Class A common stock since May, reflecting a commitment to delivering shareholder value [20] - The company is experiencing significant cost inflation, particularly in electricity and leased compression, but expects unit costs to decrease as volumes ramp up [17][18] Q&A Session Summary Question: Can you walk through the building blocks to reach the $1.2 billion run rate in Q4 2025? - Management detailed that the building blocks include expected contributions from Kings Landing and incremental volumes, with a high confidence level in achieving the target despite some delays [25][30] Question: What is the expected cadence for share buybacks? - Management indicated that buybacks will depend on stock price levels, with a focus on capital allocation based on fundamental value [32] Question: Can you provide insights on NGL recontracting and its potential timing? - Management noted that there is interest from NGL pipeline operators to negotiate early, which could lead to a tailwind for recontracting [36] Question: What is the current status of Kings Landing 2 and its FID? - Management stated that they are midway through the process, with key components like acid gas injection and electricity being critical for progress [40][41] Question: How does the company view the macro environment and its impact on operations? - Management highlighted that while there are shifts in timing for producer activity, the overall quality of rock remains strong, and they expect to catch up with development plans [50][54] Question: How has the hedging strategy evolved in light of commodity price volatility? - Management explained that they are more active in hedging and expect the impact to be relatively flat year-over-year moving into 2026 [79][80] Question: What are the expectations for CapEx in the coming years? - Management emphasized the need for careful capital allocation, focusing on high-return projects while balancing growth opportunities [86][87]

Financial Performance - Adjusted EBITDA for Q2 2025 was $243 million[8] - Free Cash Flow for Q2 2025 was $8 million[8] - Capital Expenditures for Q2 2025 were $126 million[8] - Leverage Ratio stood at 3.6x[8] - Midstream Logistics Adjusted EBITDA for Q2 2025 was $151 million, a 3% year-over-year increase, benefiting from an 11% year-over-year processed gas volume growth[12] - Pipeline Transportation Adjusted EBITDA for Q2 2025 was $97 million, a 3% year-over-year increase, benefiting from EPIC Crude ownership and PHP/Kinetik NGL outperformance[15] Guidance and Outlook - FY 2025 Adjusted EBITDA Guidance updated to a range of $1.03 billion to $1.09 billion[9] - FY 2025 Capital Guidance narrowed to a range of $460 million to $530 million[9] - The company maintains ~$1.2 billion annualized 4Q25E Adjusted EBITDA[23] Strategic Initiatives - The company repurchased $173 million of Class A common stock year-to-date, with $73 million repurchased in Q2 2025[9] - Commissioning at Kings Landing is underway, with full commercial in-service expected in late September 2025[9] - Construction began on the ECCC Pipeline, with expected in-service in the first half of 2026[9]

分组1 - Kinetik Holdings Inc. reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, but down from $0.54 per share a year ago, resulting in an earnings surprise of +135.71% [1] - The company posted revenues of $426.74 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 29.85%, compared to revenues of $359.46 million a year ago [2] - Kinetik Holdings has surpassed consensus EPS estimates only once in the last four quarters, indicating inconsistent performance [2] 分组2 - The stock has underperformed the market, losing about 25.7% since the beginning of the year, while the S&P 500 gained 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.34 on revenues of $689.08 million, and for the current fiscal year, it is $0.56 on revenues of $2.57 billion [7] - The Oil and Gas - Field Services industry, to which Kinetik belongs, is currently in the bottom 8% of the Zacks Industry Rank, suggesting a challenging environment for the stock [8]

[Second Quarter 2025 Results and Commentary](index=1&type=section&id=Second%20Quarter%202025%20Results%20and%20Commentary) [1.1 Summary of Q2 2025 Performance](index=1&type=section&id=1.1%20Summary%20of%20Q2%202025%20Performance) Kinetik achieved **$74.4 million** net income and **$242.9 million** Adjusted EBITDA in Q2 2025, with natural gas throughput increasing **11%** year-over-year Metric | Metric | Q2 2025 (million USD) | H1 2025 (million USD) | | :----------------------------- | :-------------------------- | :------------------------ | | Net Income (incl. non-controlling interests) | 74.4 | 93.7 | | Adjusted EBITDA | 242.9 | 493.0 | | Distributable Cash Flow | 153.3 | 310.3 | | Free Cash Flow | 7.9 | 128.3 | - Natural gas throughput reached **1.75 Bcf/d** in Q2 2025, representing an **11% year-over-year increase**[4](index=4&type=chunk) [1.2 CEO's Strategic Outlook and Guidance Update](index=1&type=section&id=1.2%20CEO's%20Strategic%20Outlook%20and%20Guidance%20Update) CEO Jamie Welch noted natural gas throughput growth despite commodity price declines and rising costs, anticipating significant H2 2025 performance improvement with Kings Landing's September operation and updated full-year guidance - Q2 2025 Adjusted EBITDA was **$243 million**, with natural gas throughput increasing **11%** year-over-year[4](index=4&type=chunk) - The Kings Landing complex has begun commissioning and is expected to be fully in commercial operation by **late September 2025**, which will alleviate producer constraints and resume new development activity[4](index=4&type=chunk)[5](index=5&type=chunk) 2025 Full-Year Guidance Update | Metric | Original Guidance | Updated Guidance | | :-------------------- | :-------------------- | :-------------------- | | Adjusted EBITDA | Not mentioned | 1.03 billion to 1.09 billion USD | | Capital Expenditures | Not mentioned | 460 million to 530 million USD | - ECCC pipeline construction has commenced, anticipated to be in service in **H1 2026**, providing critical rich gas takeaway capacity for the Delaware North system[5](index=5&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) [2.1 Selected Key Metrics](index=2&type=section&id=2.1%20Selected%20Key%20Metrics) The company reported key financial metrics for Q2 and H1 2025, including net income, Adjusted EBITDA, distributable cash flow, free cash flow, leverage ratio, and net debt 2025 Q2 and H1 Key Financial Metrics | Metric | Q2 2025 (thousand USD) | H1 2025 (thousand USD) | | :-------------------------------- | :---------------------- | :-------------------- | | Net Income (incl. non-controlling interests) | 74,416 | 93,678 | | Adjusted EBITDA | 242,933 | 492,950 | | Distributable Cash Flow | 153,303 | 310,284 | | Dividend Coverage Ratio | 1.2x | 1.2x | | Capital Expenditures | 126,267 | 204,341 | | Free Cash Flow | 7,882 | 128,275 | | Leverage Ratio (as of June 30) | - | 3.6x | | Net Debt to Adjusted EBITDA Ratio (as of June 30) | - | 4.0x | | Net Debt (as of June 30) | 3,943,567 | - | [2.2 Key Financial Achievements](index=2&type=section&id=2.2%20Key%20Financial%20Achievements) Kinetik achieved robust net income and Adjusted EBITDA in Q2 2025, actively executed a share repurchase program, and optimized its capital structure through debt refinancing - Q2 net income was **$74.4 million**, and Adjusted EBITDA was **$242.9 million**[9](index=9&type=chunk) - To date, **$172.6 million** of Class A common stock has been repurchased under the existing program, with **$72.6 million** repurchased in Q2[9](index=9&type=chunk) - Refinanced the company's Term Loan A and Revolving Credit Facility, extending maturities to **May 30, 2028**, and **May 30, 2030**, respectively[9](index=9&type=chunk) - At quarter-end, the company's leverage ratio under its credit agreement was **3.6x**, and the Net Debt to Adjusted EBITDA ratio was **4.0x**[9](index=9&type=chunk) [Operational and Construction Updates](index=2&type=section&id=Operational%20and%20Construction%20Updates) [3.1 Project Development and Commissioning](index=2&type=section&id=3.1%20Project%20Development%20and%20Commissioning) Kinetik advanced key projects in Q2, including Kings Landing commissioning and ECCC pipeline construction, enhancing infrastructure and operational capabilities - Kings Landing has commenced commissioning and is expected to be fully in commercial operation by **late September 2025**[10](index=10&type=chunk) - ECCC pipeline construction has begun, with an anticipated in-service date in **H1 2026**[10](index=10&type=chunk) - An acid gas injection permit application for Kings Landing has been submitted, with approval expected by **year-end 2025**[10](index=10&type=chunk) [Governance and Sustainability](index=2&type=section&id=Governance%20and%20Sustainability) [4.1 Corporate Governance and ESG Initiatives](index=2&type=section&id=4.1%20Corporate%20Governance%20and%20ESG%20Initiatives) The company implemented governance and sustainability initiatives, including NYSE Texas listing, publishing its 2024 Sustainability Report, and participating in an ultra-low carbon e-fuels project - Kinetik's common stock has been listed on NYSE Texas, while maintaining its primary listing on the New York Stock Exchange[10](index=10&type=chunk) - The **2024 Sustainability Report** has been published, highlighting the company's sustainability initiatives, progress, and achievements[10](index=10&type=chunk) - Infinium has begun construction of Project Roadrunner, an ultra-low carbon e-fuels production facility, with Kinetik becoming a long-term **CO2 feedstock supplier upon completion in 2027**[10](index=10&type=chunk) [Investor Relations and Company Information](index=3&type=section&id=Investor%20Relations%20and%20Company%20Information) [5.1 Upcoming Investor Events](index=3&type=section&id=5.1%20Upcoming%20Investor%20Events) Kinetik plans to attend several upcoming industry conferences and events, with updated investor presentations available online - Kinetik plans to attend the **Citi Natural Resources Conference (August 12-13)**, **Barclays CEO Energy-Power Conference (September 3)**, **PEP Energy Conference (September 29)**, and **Wolfe Utilities, Midstream & Clean Energy Conference (September 30)**[11](index=11&type=chunk)[15](index=15&type=chunk) - Updated investor presentations will be available in the investor section of the company's website[11](index=11&type=chunk) [5.2 Company Overview](index=3&type=section&id=5.2%20Company%20Overview) Kinetik Holdings Inc. is a fully integrated, pure-play midstream C-Corp operating in the Delaware Basin, providing comprehensive services for natural gas, NGLs, crude oil, and water - Kinetik is a fully integrated, pure-play midstream C-Corp operating from the Permian Basin to the Gulf Coast, headquartered in Houston and Midland, Texas[13](index=13&type=chunk) - The company provides comprehensive gathering, transportation, compression, processing, and treating services for companies producing natural gas, natural gas liquids, crude oil, and water[13](index=13&type=chunk) [5.3 Forward-Looking Statements Disclaimer](index=3&type=section&id=5.3%20Forward-Looking%20Statements%20Disclaimer) This press release contains forward-looking statements based on management's assumptions, where actual results may differ materially due to risks and uncertainties, and the company disclaims any obligation to update them unless legally required - Forward-looking statements include predictions, forecasts, or other descriptions of future events or circumstances, covering the company's future business strategies, plans, operational objectives, growth opportunities, shareholder returns, dividend amounts, and financial condition[14](index=14&type=chunk) - Actual results and developments may differ materially from expectations due to various risks and uncertainties, potentially causing significant discrepancies in actual results, performance, and financial condition compared to expectations[14](index=14&type=chunk) - The company undertakes no obligation to publicly update any forward-looking statements unless required by law[16](index=16&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) [6.1 Unaudited Financial Statements](index=6&type=section&id=6.1%20Unaudited%20Financial%20Statements) Kinetik released unaudited consolidated statements of operations for the three and six months ended June 30, 2025, detailing key financial data including revenue, costs, expenses, and net income Consolidated Statements of Operations Summary (Unaudited) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :----------------------------------- | :---------------------- | :---------------------- | :-------------------- | :-------------------- | | Total Operating Revenues | 426,738 | 359,457 | 870,001 | 700,851 | | Total Operating Costs and Expenses | 349,283 | 302,869 | 773,266 | 618,162 | | Operating Income | 77,455 | 56,588 | 96,735 | 82,689 | | Income Before Income Taxes | 81,743 | 118,162 | 103,572 | 157,356 | | Net Income (incl. non-controlling interests) | 74,416 | 108,948 | 93,678 | 144,355 | | Net Income Attributable to Class A Common Stockholders | 23,645 | 37,192 | 29,775 | 48,742 | | Basic Net Income Per Share Attributable to Class A Common Stockholders | 0.33 | 0.54 | 0.38 | 0.68 | | Diluted Net Income Per Share Attributable to Class A Common Stockholders | 0.33 | 0.54 | 0.38 | 0.67 | [Non-GAAP Financial Measures and Reconciliations](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [7.1 Explanation of Non-GAAP Measures](index=5&type=section&id=7.1%20Explanation%20of%20Non-GAAP%20Measures) Kinetik provides non-GAAP financial measures like Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, and Net Debt to enhance understanding of core operating performance, explaining their calculation and utility - Adjusted EBITDA is defined as Net Income (incl. non-controlling interests) adjusted for interest, taxes, depreciation and amortization, gains/losses on asset disposals and debt extinguishment, proportionate EBITDA from EMI pipelines, equity-based compensation, non-cash changes in commodity hedging activities, integration and transaction costs, and unusual or non-recurring losses and expenses[18](index=18&type=chunk)[26](index=26&type=chunk) - Distributable Cash Flow is defined as Adjusted EBITDA, adjusted for proportionate EBITDA from unconsolidated affiliates, distributions from unconsolidated affiliates, interest expense (net of capitalized amounts), unrealized gains/losses on interest rate swaps, and maintenance capital expenditures[18](index=18&type=chunk)[27](index=27&type=chunk) - Free Cash Flow is defined as Distributable Cash Flow, adjusted for growth capital expenditures, investments in unconsolidated affiliates, distributions from unconsolidated affiliates, cash interest, capitalized interest, realized gains/losses on interest rate swaps, and construction reimbursements[18](index=18&type=chunk)[28](index=28&type=chunk) - Net Debt is defined as total short-term and long-term debt (excluding deferred financing costs, premiums, and discounts), less cash and cash equivalents[19](index=19&type=chunk)[29](index=29&type=chunk) [7.2 Reconciliation Tables](index=7&type=section&id=7.2%20Reconciliation%20Tables) The company provides detailed tables reconciling GAAP financial metrics, such as net income and cash flow from operations, to non-GAAP measures like Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, and net debt Net Income (incl. non-controlling interests) to Adjusted EBITDA Reconciliation | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :----------------------------------- | :---------------------- | :---------------------- | :-------------------- | :-------------------- | | Net Income (incl. non-controlling interests) (GAAP) | 74,416 | 108,948 | 93,678 | 144,355 | | Add back: Interest expense | 56,514 | 54,049 | 112,228 | 101,516 | | Add back: Income tax expense | 7,327 | 9,214 | 9,894 | 13,001 | | Add back: Depreciation and amortization expense | 93,763 | 75,061 | 186,436 | 148,667 | | Add back: Proportionate EBITDA from unconsolidated affiliates | 88,100 | 85,922 | 175,630 | 174,324 | | Adjusted EBITDA (Non-GAAP) | 242,933 | 234,403 | 492,950 | 467,962 | Adjusted EBITDA to Distributable Cash Flow Reconciliation | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :----------------------------------- | :---------------------- | :---------------------- | :-------------------- | :-------------------- | | Adjusted EBITDA (Non-GAAP) | 242,933 | 234,403 | 492,950 | 467,962 | | Less: Proportionate EBITDA from unconsolidated affiliates | (88,100) | (85,922) | (175,630) | (174,324) | | Add back: Distributions from unconsolidated affiliates | 63,604 | 75,429 | 126,941 | 152,642 | | Less: Interest expense | (56,514) | (54,049) | (112,228) | (101,516) | | Less: Maintenance capital expenditures | (7,879) | (6,780) | (20,338) | (17,780) | | Distributable Cash Flow (Non-GAAP) | 153,303 | 162,892 | 310,284 | 317,418 | Net Debt Reconciliation | Metric | June 30, 2025 (thousand USD) | March 31, 2025 (thousand USD) | | :------------------- | :--------------------- | :--------------------- | | Short-term Debt | 189,300 | 148,800 | | Long-term Debt (net) | 3,736,972 | 3,568,457 | | Add: Debt Issuance Costs (net) | 28,028 | 26,543 | | Total Debt | 3,954,300 | 3,743,800 | | Less: Cash and Cash Equivalents | 10,733 | 8,845 | | Net Debt (Non-GAAP) | 3,943,567 | 3,734,955 |

Group 1 - Kinetik Holdings Inc. (NYSE: KNTK) is a mid-cap midstream provider based in the Delaware basin [1] - The company's stock price has faced significant pressure since Liberation Day, indicating potential market volatility [1] - The advantages of owning a highly contracted midstream company are being questioned in the current market environment [1] Group 2 - The author has a beneficial long position in KNTK shares, indicating a personal investment interest [2] - The article reflects the author's opinions and is not influenced by external compensation [2]

Core Insights - Kinetik Holdings Inc. operates in the midstream sector within the US Permian Basin, focusing on the collection, processing, and transportation of natural gas, oil, and NGL [1] - The company has demonstrated a stable financial situation, with rapid cash flow growth and dividends indicating maturity [1] Financial Performance - Recent months have shown significant cash flow growth for Kinetik Holdings Inc., reflecting the company's robust operational performance [1] - The stability in financial metrics suggests a mature business model capable of sustaining dividends [1]