KNTK Kinetik Holdings Inc

• Generated fourth quarter 2024 net income of $16.2 million and Adjusted EBITDA1 of $237.5 million
• Reported full year 2024 net income of $244.2 million, Adjusted EBITDA1 of $971.1 million, and Capital Expenditures2 of $264.5 million
• Announced bolt-on acquisition of natural gas and crude oil gathering systems primarily located in Reeves County, Texas, which closed in January 2025 (“Barilla Draw”)
• Issuing full year 2025 Guidance (“2025 Guidance”):
  • Adjusted EBITDA1 guidance of $1.09 billion to $1.15 billion
  • Capital guidance of $450 million to $540 million, including growth and maintenance Capital Expenditures2 and the previously communicated $75 million of contingent consideration tied to the final cost of the Kings Landing Complex (“Kings Landing”)

Kinetik Holdings Inc. (NYSE: KNTK) (“Kinetik” or the “Company”) today reported financial results for the quarter and year ended December 31, 2024.

2024 Results and Commentary

For the three and twelve months ended December 31, 2024, Kinetik reported net income including non-controlling interest of $16.2 million and $244.2 million, respectively.

Kinetik generated Adjusted EBITDA1 of $237.5 million and $971.1 million, Distributable Cash Flow1 of $155.4 million and $657.0 million, and Free Cash Flow1 of $32.5 million and $410.1 million for the three and twelve months ended December 31, 2024, respectively. For the three and twelve months ended December 31, 2024, Kinetik processed natural gas volumes of 1.74 Bcf/d and 1.64 Bcf/d, respectively.

“2024 was another transformational year for Kinetik,” said Jamie Welch, President & Chief Executive Officer.

“We substantially expanded our footprint and capabilities across the Delaware Basin and enhanced our growth profile through highly strategic and accretive transactions and commercial agreements. This included our acquisition of Durango Permian, LLC (“Durango Permian”), a 15-year gas gathering and processing agreement in Eddy County, and the strategic connector pipeline (“ECCC pipeline”) between Kinetik’s Delaware North and Delaware South positions which all support significant future growth in New Mexico. We also acquired the compelling bolt-on Barilla Draw assets from Permian Resources and increased our equity interest in EPIC Crude Holdings, LP (“EPIC Crude”) to 27.5% ownership in a series of transactions that would support its continued growth and strengthen its financial profile.”

“We achieved significant milestones across our finance-related objectives. Apache exited its remaining ownership stake in the Company, nearly doubling Kinetik’s public float. And, we divested our 16% stake in the Gulf Coast Express pipeline to primarily fund the previously announced $1 billion of transactions that furthered our expansion into New Mexico. Upon closing, we reduced Leverage1,3 below our Leverage Target to 3.4x. With the backdrop of strength and visibility in our business in 2025 and beyond, we increased our cash dividend by 4%, accelerating our return of capital to shareholders for the first time as a company.”

“We reported record full year 2024 Adjusted EBITDA1 growth of 16% year-over-year to $971.1 million, while continuing our cost discipline with 2024 Capital Expenditures2 of $264.5 million, below the low end of the full year guidance range. In the fourth quarter, results were temporarily impacted by unexpected events in November that resulted in a $15 million headwind. In November, the average gas daily price at Waha was negative $1.40/Mmbtu for the first 15 days due to scheduled maintenance on several intrastate gas pipelines, including Permian Highway Pipeline. Negative prices led Apache to curtail Alpine High existing volumes in November before fully reinstating those volumes in the beginning of December. Unlike prior months in 2024, Kinetik was fully exposed to lost Gross Margin from production curtailments since we did not have marketing gains from our now balanced Gulf Coast transport capacity position which was previously a net long position. Additionally, several of our Texas processing plants were operating in ethane rejection for maintenance work and commissioning activities. This created equity residue gas exposure at Waha, further negatively impacting Gross Margin. We have since implemented additional new processes and measures to manage this risk going forward.”

Welch continued, “I am incredibly proud of what our team has accomplished. Since closing the merger in February 2022, we have a demonstrated track record of compound annual double-digit Adjusted EBITDA1 growth and expect to continue such growth levels in 2025.”

2025 Guidance

Kinetik estimates full year 2025 Adjusted EBITDA1 between $1.09 billion and $1.15 billion. The midpoint of the 2025 Guidance implies Adjusted EBITDA1 growth of 15% year-over-year.

Adjusted EBITDA1 Guidance assumptions include:

• Approximately 20% growth year-over-year in gas processed volumes across the system and the start-up of Kings Landing at the end of June 2025;
• Approximately 83% of gross profit from fixed-fee contracts;
• 2025 average annual commodity prices of approximately $71 per barrel for WTI, $3.77 per Mmbtu for Houston Ship Channel natural gas, and $0.65 per gallon for natural gas liquids (market forward prices as of February 20, 2025); and
• Gross profit directly sourced from unhedged commodity prices represents approximately 4% of total gross profit.

The Company also expects that its fourth quarter 2025 annualized Adjusted EBITDA1,4 will exceed $1.2 billion. That expected financial performance will position the Company well in 2026.

Kinetik estimates aggregate 2025 Capital to be between $450 million and $540 million, including up to $75 million of contingent consideration to Morgan Stanley Energy Partners, the previous owner of Durango Permian.

Capital guidance assumptions include:

• Remaining Capital Expenditures2 to complete Kings Landing, construction of the ECCC pipeline, continued build out of the low- and high-pressure gathering system in Eddy County, New Mexico, integration of the Barilla Draw assets, pre-FID work for Kings Landing Cryo II, and all other planned growth and maintenance capital across the existing Texas and New Mexico systems; and
• Reflects current market steel prices.

Financial

a.

Achieved 2024 annual net income of $244.2 million and record Adjusted EBITDA1 of $971.1 million.

b.

Reported full year and fourth quarter 2024 Capital Expenditures2 of $264.5 million and $107.2 million, respectively.

c.

Exited the fourth quarter with a Leverage Ratio1,3 per the Company’s Revolving Credit Agreement of 3.4x and a Net Debt to Adjusted EBITDA Ratio1,5 of 3.6x.

Selected Key 2024 Metrics:

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

 

2024

 

 

2024

 

 

 

 

 

 

 

(In thousands, except ratios and share data)

Net income including non-controlling interest6

 

$

16,224

 

$

244,233

Adjusted EBITDA1

 

$

237,474

 

$

971,118

Distributable Cash Flow1

 

$

155,440

 

$

657,014

Dividend Coverage Ratio1,7

 

1.3x

 

1.4x

Capital Expenditures2

 

$

107,185

 

$

264,535

Free Cash Flow1

 

$

32,479

 

$

410,133

Leverage Ratio1,3

 

 

 

3.4x

Net Debt to Adjusted EBITDA Ratio1,5

 

 

 

3.6x

Common stock issued and outstanding8

 

 

 

 

157,712,645

 

 

December 31, 2024

 

September 30, 2024

 

June 30, 2024

 

March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Net Debt1,9

$

3,526,594

 

$

3,436,562

 

$

3,423,251

 

$

3,537,244

Operational and Construction

a.

Integration of the Barilla Draw assets is underway following the close of the acquisition.

b.

Construction on the 220 Mmcf/d Kings Landing Complex in Eddy County, New Mexico continues.

c.

Gathering services commenced in December 2024 on the low- and high-pressure gas gathering and processing project in Eddy County, New Mexico. Processing services will begin with the start-up of Kings Landing.

d.

Pipeline procurement and the right of way approval process commenced for the ECCC pipeline with construction expected to begin in the second half of 2025 and in-service in the first quarter of 2026.

New Developments

a.

Continuing regulatory and development work on Kings Landing Cryo II while also advancing commercial arrangements with producer customers.

b.

Exploring a joint venture for a behind-the-meter greenfield large-scale gas-fired power generation facility and distribution network in Reeves County, Texas to reduce ongoing electricity costs and capitalize on persistent, expected Waha natural gas price volatility. This project could reach a Final Investment Decision in 2025.

Governance

a.

Following the announcement of Todd Carpenter’s retirement in September 2024 and subsequent search for his replacement, Kinetik has promoted Lindsay Ellis to General Counsel, Chief Compliance Officer, and Corporate Secretary. Ms. Ellis previously served as Vice President, Deputy General Counsel.

b.

Karen Putterman was appointed to the Board of Directors, replacing Elizabeth Cordia. Ms. Putterman currently serves as a Managing Director for Blackstone.

c.

Granted 2024 employee-wide performance bonuses in Kinetik Class A Common Stock, which further creates alignment with our shareholders.

Upcoming Tour Dates

Kinetik plans to participate at the following upcoming conferences and events:

a.

Morgan Stanley Energy & Power Conference in New York City on March 5th

b.

Barclays Industrial Energy & Infrastructure Corporate Access Day in New York City on March 5th

c.

Bank of America Spring Energy Summit in Houston on March 26th

d.

USCA Midstream Corporate Access Day in Houston on April 1st

e.

Wolfe Energy Corporate Access Day in Houston on April 2nd

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.

Conference Call and Webcast

Kinetik will host its fourth quarter 2024 results conference call on Thursday, February 27, 2025 at 8:00 am Central Standard Time (9:00 am Eastern Standard Time) to discuss fourth quarter results. To access a live webcast of the conference call, please visit the Investor Relations section of Kinetik’s website at www.ir.kinetik.com. A replay of the conference call will also be available on the website following the call.

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 Midland, Texas and has a significant presence in Houston, 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.

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 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 other plans, expectations, and objectives for the Company’s operations, including statements about strategy, synergies, sustainability goals and initiatives, portfolio monetization opportunities, expansion projects and future operations, and financial guidance; estimates of future operational and financial results; the Company’s return of capital program; projected dividend amounts and the timing thereof and the Company’s 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, 2024 to be filed with the SEC. 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 new 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 and returns of invested capital from unconsolidated affiliates.

3.

 

Leverage Ratio is total debt less cash and cash equivalents divided by last twelve months Adjusted EBITDA, calculated in the Company’s credit agreement. The calculation includes EBITDA Adjustments for Qualified Projects, Acquisitions and Divestitures.

4.

 

A reconciliation of expected full year or annualized fourth quarter 2025 Adjusted EBITDA to net income (loss), the closest GAAP financial measure, cannot be provided without unreasonable efforts due to the inherent difficulty in quantifying certain amounts, including share-based compensation expense, which is affected by factors including future personnel needs and the future prices of our Class A Common Stock, which may be significant.

5.

 

Net Debt to Adjusted EBITDA Ratio is defined as Net Debt divided by last twelve months Adjusted EBITDA.

6.

 

Net income including noncontrolling interest for the three and twelve months ended December 31, 2023 was $267.4 million and $386.5 million, respectively.

7.

 

Dividend Coverage Ratio is Distributable Cash Flow divided by total declared dividends of $123.1 million and $479.4 million for the three and twelve months ended December 31, 2024.

8.

 

Issued and outstanding shares of 157,712,645 is the sum of 59,929,611 shares of Class A common stock and 97,783,034 shares of Class C common stock. Excludes 7,680,492 shares of Class C common stock to be issued on July 1, 2025 in connection with the Durango Permian acquisition.

9.

 

Net Debt is defined as total current and long-term debt, excluding deferred financing costs, less cash and cash equivalents.

KINETIK HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share data)

Operating revenues:

 

 

 

 

 

 

 

 

Service revenue

 

$

106,290

 

 

$

107,426

 

 

$

408,000

 

 

$

417,751

 

Product revenue

 

 

275,894

 

 

 

235,876

 

 

 

1,062,986

 

 

 

822,410

 

Other revenue

 

 

3,532

 

 

 

5,566

 

 

 

11,943

 

 

 

16,251

 

Total operating revenues

 

 

385,716

 

 

 

348,868

 

 

 

1,482,929

 

 

 

1,256,412

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Costs of sales (exclusive of depreciation and amortization shown separately below)(1)

 

 

175,832

 

 

 

141,621

 

 

 

620,618

 

 

 

515,721

 

Operating expenses

 

 

52,692

 

 

 

42,716

 

 

 

195,970

 

 

 

161,520

 

Ad valorem taxes

 

 

6,314

 

 

 

6,668

 

 

 

24,714

 

 

 

21,622

 

General and administrative expenses

 

 

39,311

 

 

 

24,775

 

 

 

134,157

 

 

 

97,906

 

Depreciation and amortization

 

 

87,947

 

 

 

72,715

 

 

 

324,197

 

 

 

280,986

 

(Gain) loss on disposal of assets, net

 

 

(50

)

 

 

4,236

 

 

 

4,040

 

 

 

19,402

 

Total operating costs and expenses

 

 

362,046

 

 

 

292,731

 

 

 

1,303,696

 

 

 

1,097,157

 

Operating income

 

 

23,670

 

 

 

56,137

 

 

 

179,233

 

 

 

159,255

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest and other income

 

 

530

 

 

 

379

 

 

 

2,802

 

 

 

2,004

 

Loss on debt extinguishment

 

 

—

 

 

 

(1,876

)

 

 

(525

)

 

 

(1,876

)

Gain on sale of equity method investment

 

 

(35

)

 

 

—

 

 

 

89,802

 

 

 

—

 

Interest expense

 

 

(49,690

)

 

 

(75,411

)

 

 

(217,235

)

 

 

(205,854

)

Equity in earnings of unconsolidated affiliates

 

 

43,523

 

 

 

53,187

 

 

 

213,191

 

 

 

200,015

 

Total other (expense) income, net

 

 

(5,672

)

 

 

(23,721

)

 

 

88,035

 

 

 

(5,711

)

Income before income taxes

 

 

17,998

 

 

 

32,416

 

 

 

267,268

 

 

 

153,544

 

Income tax expense (benefit)

 

 

1,774

 

 

 

(234,938

)

 

 

23,035

 

 

 

(232,908

)

Net income including non-controlling interests

 

 

16,224

 

 

 

267,354

 

 

 

244,233

 

 

 

386,452

 

Net income attributable to Common Unit limited partners

 

 

10,715

 

 

 

19,942

 

 

 

164,219

 

 

 

97,010

 

Net income attributable to Class A Common Shareholders

 

$

5,509

 

 

$

247,412

 

 

$

80,014

 

 

$

289,442

 

 

 

 

 

 

 

 

 

 

Net income attributable to Class A Common Shareholders, per share

 

 

 

 

 

 

 

 

Basic

 

$

0.01

 

 

$

4.37

 

 

$

1.03

 

 

$

5.25

 

Diluted

 

$

0.01

 

 

$

1.75

 

 

$

1.02

 

 

$

2.52

 

Weighted average shares

 

 

 

 

 

 

 

 

Basic

 

 

59,783

 

 

 

55,655

 

 

 

59,284

 

 

 

51,823

 

Diluted

 

 

60,551

 

 

 

149,890

 

 

 

60,115

 

 

 

146,197

 

(1)

Cost of sales (exclusive of depreciation and amortization) is net of gas service revenues totaling $219.7 million and $148.3 million for the years ended December 31, 2024 and 2023, respectively, for certain volumes where we act as principal.

KINETIK HOLDINGS INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Net Income Including Non-controlling Interests to Adjusted EBITDA

(In thousands)

Net income including non-controlling interests (GAAP)

$

16,224

 

 

$

267,354

 

 

$

244,233

 

 

$

386,452

 

Add back:

 

 

 

 

 

 

 

Interest expense

 

49,690

 

 

 

75,411

 

 

 

217,235

 

 

 

205,854

 

Income tax expense (benefit)

 

1,774

 

 

 

(234,938

)

 

 

23,035

 

 

 

(232,908

)

Depreciation and amortization expenses

 

87,947

 

 

 

72,715

 

 

 

324,197

 

 

 

280,986

 

Amortization of contract costs

 

1,656

 

 

 

1,655

 

 

 

6,621

 

 

 

6,620

 

Proportionate EBITDA from unconsolidated affiliates

 

84,113

 

 

 

81,139

 

 

 

346,666

 

 

 

306,072

 

Share-based compensation

 

23,668

 

 

 

12,642

 

 

 

76,536

 

 

 

55,983

 

(Gain) loss on disposal of assets

 

(50

)

 

 

4,236

 

 

 

4,040

 

 

 

19,402

 

Loss on debt extinguishment

 

—

 

 

 

1,876

 

 

 

525

 

 

 

1,876

 

Commodity hedging unrealized loss

 

12,722

 

 

 

—

 

 

 

10,788

 

 

 

—

 

Contingent liability fair value adjustment

 

(1,200

)

 

 

—

 

 

 

200

 

 

 

—

 

Integration costs

 

735

 

 

 

30

 

 

 

5,826

 

 

 

1,015

 

Acquisition transaction costs

 

558

 

 

 

—

 

 

 

4,096

 

 

 

648

 

Other one-time cost and amortization

 

3,655

 

 

 

4,356

 

 

 

12,101

 

 

 

11,901

 

Deduct:

 

 

 

 

 

 

 

Interest income

 

530

 

 

 

363

 

 

 

1,988

 

 

 

677

 

Warrant valuation adjustment

 

—

 

 

 

14

 

 

 

—

 

 

 

88

 

Commodity hedging unrealized gain

 

—

 

 

 

4,907

 

 

 

—

 

 

 

4,291

 

(Loss) gain on sale of equity method investment

 

(35

)

 

 

—

 

 

 

89,802

 

 

 

—

 

Equity income from unconsolidated affiliates

 

43,523

 

 

 

53,187

 

 

 

213,191

 

 

 

200,015

 

Adjusted EBITDA(1) (non-GAAP)

$

237,474

 

 

$

228,005

 

 

$

971,118

 

 

$

838,830

 

 

 

 

 

 

 

 

 

Distributable Cash Flow (2)

 

 

 

 

 

 

 

Adjusted EBITDA (non-GAAP)

$

237,474

 

 

$

228,005

 

 

$

971,118

 

 

$

838,830

 

Proportionate EBITDA from unconsolidated affiliates

 

(84,113

)

 

 

(81,139

)

 

 

(346,666

)

 

 

(306,072

)

Returns on invested capital from unconsolidated affiliates

 

66,322

 

 

 

66,599

 

 

 

289,992

 

 

 

272,490

 

Interest expense

 

(49,690

)

 

 

(75,411

)

 

 

(217,235

)

 

 

(205,854

)

Unrealized (gain) loss on interest rate derivatives

 

(3,102

)

 

 

22,862

 

 

 

(333

)

 

 

(4,619

)

Maintenance capital expenditures

 

(11,451

)

 

 

(11,203

)

 

 

(39,862

)

 

 

(26,268

)

Distributable cash flow (non-GAAP)

$

155,440

 

 

$

149,713

 

 

$

657,014

 

 

$

568,507

 

 

 

 

 

 

 

 

 

Free Cash Flow (3)

 

 

 

 

 

 

 

Distributable cash flow (non-GAAP)

$

155,440

 

 

$

149,713

 

 

$

657,014

 

 

$

568,507

 

Cash interest adjustment

 

(25,042

)

 

 

10,726

 

 

 

(27,036

)

 

 

2,773

 

Realized gain on interest rate derivatives

 

1,251

 

 

 

4,736

 

 

 

13,149

 

 

 

11,818

 

Growth capital expenditures

 

(97,437

)

 

 

(56,231

)

 

 

(227,690

)

 

 

(296,872

)

Capitalized interest

 

(3,436

)

 

 

(4,495

)

 

 

(8,321

)

 

 

(18,270

)

Investments in unconsolidated affiliates

 

—

 

 

 

(32,822

)

 

 

(3,273

)

 

 

(226,947

)

Returns of invested capital from unconsolidated affiliates

 

1,270

 

 

 

886

 

 

 

4,059

 

 

 

6,679

 

Contributions in aid of construction

 

433

 

 

 

4,404

 

 

 

2,231

 

 

 

12,243

 

Free cash flow (non-GAAP)

$

32,479

 

 

$

76,917

 

 

$

410,133

 

 

$

59,931

 

KINETIK HOLDINGS INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (Continued)

 

 

Twelve Months Ended

December 31,

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

(In thousands)

Reconciliation of net cash provided by operating activities to Adjusted EBITDA

 

 

 

 

Net cash provided by operating activities

 

$

637,346

 

 

$

584,480

 

Net changes in operating assets and liabilities

 

 

43,401

 

 

 

4,057

 

Interest expense

 

 

217,235

 

 

 

205,854

 

Amortization of deferred financing costs

 

 

(7,438

)

 

 

(6,194

)

Current income tax expense

 

 

3,532

 

 

 

492

 

Returns on invested capital from unconsolidated affiliates

 

 

(289,992

)

 

 

(272,490

)

Proportionate EBITDA from unconsolidated affiliates

 

 

346,666

 

 

 

306,072

 

Derivative fair value adjustment and settlement

 

 

(10,455

)

 

 

7,963

 

Commodity hedging unrealized loss (gain)

 

 

10,788

 

 

 

(4,291

)

Interest income

 

 

(1,988

)

 

 

(677

)

Integration costs

 

 

5,826

 

 

 

1,015

 

Acquisition transaction costs

 

 

4,096

 

 

 

648

 

Other one-time cost or amortization

 

 

12,101

 

 

 

11,901

 

Adjusted EBITDA(1) (non-GAAP)

 

$

971,118

 

 

$

838,830

 

 

 

 

 

 

Distributable Cash Flow(2)

 

 

 

 

Adjusted EBITDA (non-GAAP)

 

$

971,118

 

 

$

838,830

 

Proportionate EBITDA from unconsolidated affiliates

 

 

(346,666

)

 

 

(306,072

)

Returns on invested capital from unconsolidated affiliates

 

 

289,992

 

 

 

272,490

 

Interest expense

 

 

(217,235

)

 

 

(205,854

)

Unrealized gain on interest rate derivatives

 

 

(333

)

 

 

(4,619

)

Maintenance capital expenditures

 

 

(39,862

)

 

 

(26,268

)

Distributable cash flow (non-GAAP)

 

$

657,014

 

 

$

568,507

 

 

 

 

 

 

Free Cash Flow(3)

 

 

 

 

Distributable cash flow (non-GAAP)

 

$

657,014

 

 

$

568,507

 

Cash interest adjustment

 

 

(27,036

)

 

 

2,773

 

Realized gain on interest rate swaps

 

 

13,149

 

 

 

11,818

 

Growth capital expenditures

 

 

(227,690

)

 

 

(296,872

)

Capitalized interest

 

 

(8,321

)

 

 

(18,270

)

Investments in unconsolidated affiliates

 

 

(3,273

)

 

 

(226,947

)

Returns of invested capital from unconsolidated affiliates

 

 

4,059

 

 

 

6,679

 

Contributions in aid of construction

 

 

2,231

 

 

 

12,243

 

Free cash flow (non-GAAP)

 

$

410,133

 

 

$

59,931

 

KINETIK HOLDINGS INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (Continued)

 

December 31, 2024

 

September 30, 2024

 

June 30, 2024

 

March 31, 2024

 

 

 

 

 

 

 

 

Net Debt(4)

(In thousands)

Short-term debt

$

140,200

 

$

150,000

 

$

148,800

 

$

—

Long-term debt, net

 

3,363,996

 

 

3,279,689

 

 

3,258,403

 

 

3,517,115

Plus: Debt issuance costs, net

 

26,174

 

 

27,311

 

 

28,597

 

 

29,885

Total debt

 

3,530,370

 

 

3,457,000

 

 

3,435,800

 

 

3,547,000

Less: Cash and cash equivalents

 

3,606

 

 

20,438

 

 

12,549

 

 

9,756

Net debt (non-GAAP)

$

3,526,594

 

$

3,436,562

 

$

3,423,251

 

$

3,537,244

(1) Adjusted EBITDA is defined as net income including noncontrolling interests adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets and debt extinguishment, the proportionate EBITDA from our EMI pipelines, equity income and gain from sale of investments recorded using the equity method, share-based compensation expense, noncash increases and decreases related to hedging activities, fair value adjustments for contingent liabilities, 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 interests 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 derivatives and maintenance capital expenditures. Distributable Cash Flow should not be considered as an alternative to the GAAP measure of net income including non-controlling interests 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, cash interest, capitalized interest, realized gains or losses on interest rate derivatives 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 interests 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.

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226964774/en/

Kinetik Investors: Alex Durkee (713) 574-4743 investors@kinetik.com