Capacity and Acquisitions - The company has approximately 2.2 Bcf/d cryogenic natural gas processing capacity, which will increase to 2.4 Bcf/d upon completion of the Kings Landing Project in mid-2025[22]. - The company entered into a definitive agreement to acquire natural gas and crude oil gathering systems assets from Permian Resources for $178.4 million, closing in early January 2025[23]. - The company acquired a 12.5% equity interest in EPIC, increasing its total ownership to 27.5%, with EPIC having a pipeline capacity of 625 MBbl/d[24]. - The Company completed the acquisition of Durango Permian LLC for an adjusted purchase price of approximately $785.7 million, significantly expanding its footprint into New Mexico and the Northern Delaware Basin[25]. - The Durango Acquisition increased processing capacity by over 200 MMcf/d and doubled existing gathering pipeline mileage, with an additional 200 MMcf/d capacity expected from the Kings Landing Project[26]. - The Company sold its 16% equity interest in the Gulf Coast Express Pipeline for an adjusted purchase price of $524.4 million, including a $30 million earn-out contingent on capital project approvals[27]. Operations and Infrastructure - The company is the fourth largest natural gas processor in the Delaware Basin and across the entire Permian Basin by processing capacity[22]. - The company provides a multi-stream opportunity for natural gas gathering, compression, and processing, as well as crude gathering services[23]. - The Midstream Logistics segment operates over 3,900 miles of pipeline in the Delaware Basin, including over 2,300 miles acquired through the Durango Acquisition[34]. - The Company has a total cryogenic processing capacity of approximately 2.2 Bcf/d across seven processing complexes[34]. - The Pipeline Transportation segment includes three equity method investment pipelines with a total capacity of 2.65 Bcf/d for the Permian Highway Pipeline, 600 MBbl/d for Shin Oak, and 625 MBbl/d for EPIC[45]. - The Delaware Link Pipeline, which provides additional transportation capacity to Waha, reached commercial in-service in October 2023 with a capacity of approximately 1.0 Bcf/d[43]. Financial Performance and Risks - The company’s success depends on maintaining or increasing hydrocarbon throughput volumes on its midstream systems[18]. - The company’s ability to return capital to stockholders through dividends and stock repurchases depends on generating sufficient cash flows[20]. - The Company may face challenges in controlling cash flows from joint ventures, potentially impacting its financial condition and results of operations[103]. - The costs of producing crude oil, natural gas, and NGLs, as well as the availability of drilling rigs and transportation facilities, are critical factors affecting revenue[104]. - The Company relies on third-party pipelines for transportation, and any disruptions could materially affect its ability to operate efficiently and generate revenue[105]. - Customers may suspend or terminate agreements under certain circumstances, which could adversely impact the Company's financial condition and cash flows[107]. Regulatory and Compliance - The Company’s intrastate natural gas operations are regulated by the Railroad Commission of Texas (TRRC), ensuring that rates and services are just and reasonable[56]. - The Company is subject to the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) regulations, which include mandatory inspections for pipelines in high consequence areas[61]. - The Company has incurred and will continue to incur significant operating and capital expenditures to comply with environmental and occupational health and safety laws[65]. - The Company’s operations are subject to various environmental laws, including the Clean Air Act and the Clean Water Act, which may result in increased compliance costs[67]. - The Company is committed to conducting business in accordance with high ethical standards, with oversight from the Audit Committee on business ethics issues[77]. Sustainability and Environmental Impact - The Company’s sustainability strategy ties 20% of all salaried employees' at-risk pay to the achievement of specific sustainability goals, including methane emissions reduction[74]. - 100% of the Company’s debt capital structure is linked to sustainability performance, including targets related to GHG and methane emission intensity[78]. - The company aims to reduce Scope 2 GHG emissions through energy efficiency measures and sourcing renewable energy[79]. - In 2023, the company converted 3,742 natural gas-driven pneumatics and pumps to instrument air, reducing annual methane emissions by approximately 50%[79]. - The company received approval from the US EPA for the Monitoring, Reporting and Verification Plan for three Class II Acid Gas Injection wells, enabling economic benefits from sequestered CO2 through 45Q tax credits[79]. - The company is in the process of gathering 2024 GHG emission data, indicating a commitment to transparency in environmental impact reporting[78]. Safety and Risk Management - As of December 31, 2024, the Company had approximately 460 employees, with a Total Recordable Incident Rate of 0.75 and a Motor Vehicle Incident Rate of 1.36 in 2024[49][50]. - The Company emphasizes a strong safety culture, with over 18,000 hours of EHS-related training completed by employees in 2024[52]. - The company underwent 13 pipeline integrity and safety audits and three process safety inspections in 2024, resulting in one immaterial regulatory penalty[83]. - The Company’s risk management processes are overseen by the Audit Committee, which reviews ongoing assessments of the company's risk management[76]. Market and Competitive Landscape - Increased competition from other midstream service providers and alternative energy sources could negatively affect demand for the Company's services[108]. - The Company has limited direct exposure to commodity price risk, but its customers are exposed, which could impact future service volumes[112]. - The influence of major shareholders, Blackstone and I Squared Capital, may not align with the interests of other stockholders, impacting corporate actions[146][147]. Economic and Operational Challenges - The Company faces risks from natural or human causes, including severe weather, geopolitical conflicts, and pandemics, which could disrupt operations[161]. - Cybersecurity breaches pose a significant risk, potentially leading to information theft, operational disruption, and financial loss, as the Company increasingly relies on digital technologies[164]. - Changes in tax laws and regulations could adversely affect the Company's operating results and cash flows[123]. - Rate regulation and challenges to the Company's pricing could lead to increased operating expenses and reduced cash flows[126]. - The Company may experience shortages of equipment and skilled labor, which could increase costs and reduce productivity[119].

Financial Data and Key Metrics Changes - In Q4 2024, adjusted EBITDA was reported at $237 million, with distributable cash flow of $155 million and free cash flow of $32 million [19] - For the full year 2024, adjusted EBITDA reached $971 million, representing a 16% year-over-year increase, and capital expenditures totaled $265 million, which was $15 million below the midpoint of guidance [12][24] - The company exited 2024 with a leverage ratio of 3.4 times, down 0.6 times year-over-year [25] Business Line Data and Key Metrics Changes - The Midstream Logistics segment generated adjusted EBITDA of $150 million in Q4, up 3% year-over-year but down 14% sequentially due to negative Waha gas prices impacting volumes [20] - The pipeline transportation segment reported adjusted EBITDA of $92 million, up nearly 9% year-over-year, driven by volume growth and contributions from recent expansions [23] Market Data and Key Metrics Changes - Average gas processed volumes for 2024 were 1.64 billion cubic feet per day, up 13% year-over-year [11] - The company anticipates a 20% growth in gas processed volumes across the system in 2025, outpacing broader Permian growth [26] Company Strategy and Development Direction - The company aims to become a market leader in the Northern Delaware Basin, with strategic M&A and organic growth as key components of its strategy [6] - Kinetik is exploring a large-scale gas-fired power generation facility to manage electricity costs and capitalize on natural gas price volatility [15][16] - The company has set an internal target of achieving $2 billion in EBITDA by 2030, with a focus on organic growth and disciplined capital deployment [54][56] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 was transformational, with significant milestones in capital allocation and operational performance rebounding by late December [5][11] - The company expects continued growth driven by the Permian supply and US Gulf Coast demand, with LNG exports projected to double by 2030 [13][14] - Management expressed confidence in executing growth strategies and maintaining financial flexibility to pursue both organic and inorganic opportunities [97][98] Other Important Information - The company increased its cash dividend by 4%, marking the first return of capital to shareholders [9] - Kinetik was placed on a positive outlook by S&P, reflecting confidence in its growth trajectory [9] Q&A Session Summary Question: What is the execution risk associated with achieving the 10% EBITDA CAGR target? - Management indicated that they have a strong market share performance and are confident in their ability to execute on growth opportunities, particularly with the King's Landing project [38][39] Question: Are there opportunities for M&A in 2025? - Management acknowledged that while there are opportunities, they maintain a high bar for attractiveness in potential transactions [45][46] Question: How does the company plan to achieve its long-term growth targets? - Management emphasized a focus on organic growth and internal capabilities, with King's Landing being a key project for future growth [56][57] Question: What is the outlook for producer customer activity in 2025? - Management noted robust activity levels among producers, particularly in New Mexico, and highlighted the potential for increased drilling activity if gas prices improve [64][66] Question: How does the company view the competitive landscape for sour gas opportunities? - Management sees significant opportunities in sour gas processing in Northern Delaware and is focused on capitalizing on existing capacity [119] Question: What is the relationship between EBITDA growth and dividend growth? - Management stated that they are prioritizing financial flexibility and retaining cash for growth opportunities, which may result in slower dividend growth [97][98]

2024 Results & 2025 Guidance February 26, 2025 Forward looking statements This presentation 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 or other characterizations of future events or circumstances, including any underlying assumptions. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," " ...

Financial Performance - Kinetik reported Q4 2024 net income of $16.2 million and full year net income of $244.2 million[3]. - Adjusted EBITDA for Q4 2024 was $237.5 million, with a full year total of $971.1 million, reflecting a 16% year-over-year growth[5]. - Total operating revenues for Q4 2024 reached $385.7 million, a 10.6% increase from $348.9 million in Q4 2023[23]. - Product revenue for the full year 2024 was $1.063 billion, up 29.2% from $822.4 million in 2023[23]. - Adjusted EBITDA for Q4 2024 was $237.5 million, compared to $228.0 million in Q4 2023, reflecting a 4.9% increase[25]. - Distributable cash flow for the full year 2024 was $657.0 million, a 15.6% increase from $568.5 million in 2023[25]. - Operating income for Q4 2024 was $23.7 million, down from $56.1 million in Q4 2023, indicating a decrease of 57.8%[23]. - Total operating costs and expenses for Q4 2024 were $362.0 million, compared to $292.7 million in Q4 2023, representing a 23.7% increase[23]. Capital Expenditures and Guidance - Kinetik's capital expenditures for 2024 were $264.5 million, below the low end of the guidance range[5]. - The company announced 2025 guidance for Adjusted EBITDA between $1.09 billion and $1.15 billion, indicating a 15% growth year-over-year[7]. - Kinetik's 2025 capital guidance is set between $450 million and $540 million, including $75 million of contingent consideration[7]. Debt and Leverage - The company achieved a leverage ratio of 3.4x and a net debt to Adjusted EBITDA ratio of 3.6x by the end of Q4 2024[10]. - Total debt as of December 31, 2024, was $3,530,370,000, compared to $3,457,000,000 in the previous quarter, showing an increase of 2.1%[28]. - Net debt (non-GAAP) stood at $3,526,594,000 as of December 31, 2024, up from $3,436,562,000 in the previous quarter, reflecting an increase of 2.6%[28]. - Interest expense for the twelve months ended December 31, 2024, was $217,235,000, compared to $205,854,000 in 2023, representing an increase of 5.5%[26]. - The net debt to adjusted EBITDA ratio is calculated as net debt divided by last twelve months adjusted EBITDA, reflecting the company's leverage position[5]. Cash Flow and Investments - Net cash provided by operating activities for the twelve months ended December 31, 2024, was $637,346,000, an increase from $584,480,000 in 2023, representing an increase of 9%[26]. - Adjusted EBITDA (non-GAAP) for the twelve months ended December 31, 2024, was $971,118,000, compared to $838,830,000 in 2023, reflecting a growth of 15.7%[26]. - Distributable Cash Flow (non-GAAP) increased to $657,014,000 in 2024 from $568,507,000 in 2023, marking a rise of 15.6%[26]. - Free Cash Flow (non-GAAP) significantly improved to $410,133,000 in 2024, up from $59,931,000 in 2023, indicating a substantial increase of 585.5%[26]. Strategic Initiatives - Kinetik completed the acquisition of Barilla Draw assets in January 2025, enhancing its natural gas and crude oil gathering systems[5]. - The company is advancing construction on the Kings Landing Complex, expected to start processing services in June 2025[13]. - Kinetik plans to explore a joint venture for a large-scale gas-fired power generation facility in Reeves County, Texas, with a potential Final Investment Decision in 2025[13]. Shareholder Information - The company has 157,712,645 issued and outstanding shares, including 59,929,611 Class A common stock and 97,783,034 Class C common stock[8]. - The company reported a Dividend Coverage Ratio of 1.26 for Q4 2024, based on total declared dividends of $123.1 million[7]. Performance of Affiliates - Proportionate EBITDA from unconsolidated affiliates was $346,666,000 in 2024, up from $306,072,000 in 2023, indicating a growth of 13.3%[26]. - Returns on invested capital from unconsolidated affiliates increased to $289,992,000 in 2024 from $272,490,000 in 2023, a rise of 6.4%[26]. Integration Costs - Integration costs for the twelve months ended December 31, 2024, were $5,826,000, compared to $1,015,000 in 2023, showing a significant increase of 474.5%[26].

分组1 - Kinetik Holdings Inc. reported quarterly earnings of $0.01 per share, significantly missing the Zacks Consensus Estimate of $0.37 per share, and down from $1.70 per share a year ago, representing an earnings surprise of -97.30% [1] - The company posted revenues of $385.72 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 22.13%, compared to year-ago revenues of $348.87 million [2] - Kinetik Holdings has surpassed consensus EPS estimates only once in the last four quarters, while it has topped consensus revenue estimates three times during the same period [2] 分组2 - The stock has added about 0.3% since the beginning of the year, underperforming the S&P 500's gain of 1.3% [3] - The current consensus EPS estimate for the coming quarter is $0.40 on revenues of $567.27 million, and for the current fiscal year, it is $2.48 on revenues of $2.47 billion [7] - The Zacks Industry Rank for Oil and Gas - Field Services is currently in the bottom 32% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Company Overview - Kinetik Holdings Inc. (KNTK) currently holds a Momentum Style Score of B, indicating a positive momentum outlook [3] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [4] Price Performance - KNTK shares have increased by 21.36% over the past week, outperforming the Zacks Oil and Gas - Field Services industry, which rose by 10.53% during the same period [6] - Over the past quarter, KNTK shares have gained 30.65%, and over the last year, they have increased by 57.82%, while the S&P 500 has only moved 10.53% and 37.42%, respectively [7] Trading Volume - The average 20-day trading volume for KNTK is 515,665 shares, which serves as a useful baseline for assessing price movements [8] Earnings Outlook - In the past two months, one earnings estimate for KNTK has moved higher, while none have moved lower, resulting in an increase in the consensus estimate from $1.39 to $1.46 [10] - For the next fiscal year, two estimates have been revised upwards, with no downward revisions during the same period [10]

Core Viewpoint - Kinetik Holdings Inc. (KNTK) is experiencing solid improvement in earnings estimates, which is likely to positively impact its stock price momentum [1][2]. Current-Quarter Estimate Revisions - The earnings estimate for the current quarter is $0.46 per share, reflecting a year-over-year decrease of 72.94% - The Zacks Consensus Estimate for Kinetik Holdings has increased by 6.98% over the last 30 days, with one estimate rising and no negative revisions [4]. Current-Year Estimate Revisions - For the full year, Kinetik Holdings is expected to earn $1.46 per share, indicating a year-over-year decline of 38.66% - There has been a positive trend in estimate revisions for the current year, with one estimate moving up and no negative revisions, resulting in a 5.04% increase in the consensus estimate [5]. Favorable Zacks Rank - Kinetik Holdings currently holds a Zacks Rank 2 (Buy), indicating promising estimate revisions that can guide investment decisions - Research shows that stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) tend to significantly outperform the S&P 500 [6]. Stock Performance - Kinetik Holdings shares have increased by 16.6% over the past four weeks, suggesting strong investor confidence in its earnings growth prospects [7].

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Financial Performance - Total operating revenues for Q3 2024 were $396.4 million, a 20% increase from $330.3 million in Q3 2023[7] - Product revenue increased by 31.3% to $290.4 million in Q3 2024, compared to $221.3 million in Q3 2023[7] - Operating income for Q3 2024 was $72.9 million, up 89.5% from $38.4 million in Q3 2023[7] - Net income attributable to Class A Common Stock Shareholders was $25.8 million in Q3 2024, compared to $15.6 million in Q3 2023, representing a 65.5% increase[7] - Basic earnings per share for Q3 2024 was $0.35, up from $0.21 in Q3 2023, reflecting a 66.7% increase[7] - Net income for the nine months ended September 30, 2024, was $228,009 thousand, compared to $119,098 thousand for the same period in 2023, reflecting an increase of 91.6%[11] - Net income for the quarter ended September 30, 2024, was $25,763, a significant increase compared to the previous period[14] - For the nine months ended September 30, 2024, net income was $74,505, indicating strong performance year-to-date[15] - The company reported net income including noncontrolling interest of $83.6 million for the three months ended September 30, 2024, compared to $46.6 million for the same period in 2023, reflecting an increase of 79.5%[41] Operating Costs and Expenses - Total operating costs and expenses for Q3 2024 were $323.5 million, an increase of 10.8% from $291.9 million in Q3 2023[7] - Interest expense increased to $66.0 million in Q3 2024 from $45.0 million in Q3 2023[7] - General and administrative expenses increased by $21.7 million, or 30%, to $94.8 million for the nine months ended September 30, 2024, compared to $73.1 million for the same period in 2023[178] - Depreciation and amortization expense increased by $28.0 million, or 13%, to $236.3 million for the nine months ended September 30, 2024, compared to $208.3 million for the same period in 2023[179] - Cost of sales increased by $70.7 million, or 19%, to $444.8 million for the nine months ended September 30, 2024, compared to $374.1 million for the same period in 2023[175] - Operating expenses increased by $24.5 million, or 21%, to $143.3 million for the nine months ended September 30, 2024, compared to $118.8 million for the same period in 2023[176] Assets and Liabilities - Total assets increased to $6,860,461 thousand as of September 30, 2024, up from $6,496,873 thousand at December 31, 2023, representing a growth of 5.6%[8] - Total liabilities decreased to $3,797,986 thousand from $3,869,889 thousand, a decrease of 1.9%[8] - Long-term debt decreased to $3,279,689 thousand from $3,562,809 thousand, a reduction of 7.9%[8] - The company reported a significant increase in accounts receivable, net of allowance for credit losses, which decreased to $65,615 thousand from $215,721 thousand, a decline of 69.6%[8] - Cash and cash equivalents rose significantly to $20,438 thousand from $4,510 thousand, marking a substantial increase of 353.5%[8] Equity and Dividends - Cash dividends paid to Class A Common Stock shareholders increased to $128,428 thousand from $58,030 thousand, an increase of 121%[11] - The company declared a cash dividend of $0.78 per share on Class A Common Stock, payable on November 7, 2024[142] Acquisitions and Investments - The company completed the acquisition of Durango Permian LLC for an adjusted purchase price of approximately $845.2 million, which included $358.0 million in cash and approximately 3.8 million shares valued at $148.2 million[32] - The company made a net cash payment of $341,183 thousand for acquisitions during the nine months ended September 30, 2024[11] - The company has engaged in strategic acquisitions, including the Durango Acquisition valued at $423,200[15] - The company acquired an additional 12.5% equity interest in EPIC, increasing its total ownership to 27.5% as of September 30, 2024[153] Segment Performance - The Midstream Logistics segment accounted for over 97% of the Company's operating revenues for the three months ended September 30, 2024[131] - Midstream Logistics revenue for the three months ended September 30, 2024, was $391,331, up from $324,863 in the same period of 2023, marking an increase of approximately 20.5%[138] - For the nine months ended September 30, 2024, total segment operating revenue reached $1,097,213, an increase from $907,544 in the same period of 2023, representing a growth of approximately 21%[140] - For the nine months ended September 30, 2024, the Company reported total revenues of $380.4 million and net income of $245.0 million for the Permian Highway Pipeline LLC[64] Adjusted EBITDA - Adjusted EBITDA increased by $50.4 million, or 23%, to $265.7 million for the three months ended September 30, 2024, compared to $215.3 million for the same period in 2023[191] - For the nine months ended September 30, 2024, Adjusted EBITDA increased by $122.8 million, or 20%, to $733.6 million compared to $610.8 million for the same period in 2023[192] - The increase in nine-month Adjusted EBITDA was driven by a $189.7 million increase in total operating revenue, partially offset by increased costs of sales and operating expenses of $120.3 million[192] Tax and Legal Matters - The effective tax rate for the three months ended September 30, 2024, was 8.99%, significantly lower than the 2.93% rate for the same period in 2023[13] - The income tax expense for the nine months ended September 30, 2024, was $21,261,000, compared to $2,030,000 for the same period in 2023[13] - The Company has no accruals for loss contingencies as of September 30, 2024, indicating a stable legal and financial position[120] - The Company is awaiting settlement of $8.0 million in outstanding vendor credits related to prior litigation, with no allowance established due to the counterparties' creditworthiness[122]

KINETIK Third Quarter 2024 Results November 6, 2024 Forward looking statements This presentation 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 or other characterizations of future events or circumstances, including any underlying assumptions. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend ...