Kinetik (KNTK) - 2025 Q2 - Quarterly Report

Glossary of Terms 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] Forward-Looking Statements and Risk 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] - 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] - 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] Part I — Financial Information Item 1. Financial Statements (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 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) | 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] - 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] Condensed Consolidated Balance Sheets 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) | 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] - Total liabilities increased by approximately $504 million, driven by increases in long-term debt and accrued expenses[20] - Total equity improved significantly, reducing the accumulated deficit from $(2,976,596) thousand to $(1,565,658) thousand[20] Condensed Consolidated Statements of Cash Flows 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) | 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] - 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] - 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] Condensed Consolidated Statements of Changes in Equity and Noncontrolling Interests 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] - 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] - Net income attributable to Class A Common Stock for the six months ended June 30, 2025, was $29,775 thousand[27] - Dividends on Class A Common Stock totaled $95,663 thousand for the six months ended June 30