Kinetik Holdings Inc

6. EQUITY METHOD INVESTMENTS

As of March 31, 2024, the Company owned investments in the following long-haul pipeline entities in the Permian Basin. These investments were accounted for using the equity method of accounting. For each EMI pipeline entity, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the EMI pipeline. The table below presents the ownership percentages and investment balances held by the Company for each entity:

(1)As of March 31, 2024 the Company also owned 15.0% of Epic Crude Holdings, LP (“EPIC”).

The unamortized basis differences included in the EMI pipeline balances were $345.9 million and $349.3 million as of March 31, 2024 and December 31, 2023, respectively. These amounts represent differences in the Company’s contributions to date and the Company’s underlying equity in the separate net assets within the financial statements of the respective entities. Unamortized basis differences will be amortized into equity income over the useful lives of the underlying pipeline assets, which ranged from 20 years to 32 years as determined at the Closing of the ALTM business combination. There was capitalized interest of $24.5 million and $24.7 million as of March 31, 2024 and December 31, 2023, respectively. Capitalized interest is amortized on a straight-line basis into equity income.

The following table presents the activity in the Company’s EMIs for the three months ended March 31, 2024:

(1)Distributions consisted of distributions from returns on investment of $77.2 million, which was included in cash flows from operating activities and distributions from returns of investment of $1.2 million, which was included in cash flows from investing activities.

(2)For the three months ended March 31, 2024, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $2.0 million from PHP, $0.2 million from Breviloba, LLC and $1.6 million from GCX.

Summarized Financial Information

The following table represents selected data for the Company’s EMI pipelines (on a 100 percent basis) for the three months ended March 31, 2024 and 2023.