Kinetik Holdings Inc.

Previous wording

The following discussion and analysis addresses the results of our operations for the three month period ended March 31, 2025, as compared to our results of operations for the same period in 2024. Please read the following discussion of our financial condition and results of operations in conjunction with the financial statements and notes thereto included elsewhere in this report.

Current wording

The following discussion and analysis addresses the results of our operations for the three and six months ended June 30, 2025, as compared to our results of operations for the same period in 2024. Please read the following discussion of our financial condition and results of operations in conjunction with the financial statements and notes thereto included elsewhere in this report.

Previous wording

Gas Gathering and Processing. The Midstream Logistics segment provides gas gathering and processing services with over 4,200 miles of low and high-pressure steel pipeline located throughout the Delaware Basin, including over 2,300 miles of gas pipeline acquired through the Durango Acquisition, over 200 miles of gas pipeline acquired through the Barilla Draw Acquisition, and over 630,000 horsepower of compression capacity. Gas processing assets are centralized at seven processing complexes with total cryogenic processing capacity of approximately 2.2 Bcf/d as of today and over 2.4 Bcf/d once the Kings Landing Project is complete in mid-2025.

Current wording

Gas Gathering and Processing. The Midstream Logistics segment provides gas gathering and processing services with over 4,200 miles of low and high-pressure steel pipeline located throughout the Delaware Basin, including over 2,300 miles of gas pipeline acquired through the Durango Acquisition, over 200 miles of gas pipeline acquired through the Barilla Draw Acquisition, and over 630,000 horsepower of compression capacity. Gas processing assets are centralized at seven processing complexes with total cryogenic processing capacity of approximately 2.2 Bcf/d and over 2.4 Bcf/d once the Kings Landing Project is complete in the third quarter of 2025.

Previous wording

Water Gathering and Disposal. The system includes over 370 miles of gathering pipeline and approximately 580,000 barrels per day of permitted disposal capacity.

Current wording

Water Gathering and Disposal. The system includes approximately 370 miles of gathering pipeline and approximately 580,000 barrels per day of permitted disposal capacity.

Previous wording

On April 1, 2025, Kinetik LP, which is a subsidiary of the Company. entered into Amendment No. 1 to the A/R Facility to, among other things. increase the facility limit and extend the scheduled termination date.

Current wording

On April 1, 2025, the Partnership entered into an amendment to its accounts receivable securitization facility dated April 2, 2024 (as amended, the “Amended A/R Facility”) to, among other things, increase the facility limit to $250.0 million and extend the scheduled termination date to March 31, 2026.

Previous wording

There has been, and we believe there will continue to be, volatility in commodity prices and in the relationships among NGLs, crude oil and natural gas prices. As a result of uncertainty around global commodity supply and demand, global geopolitical conflicts, foreign and domestic trade policies implemented by the Trump Administration, and recent action by OPEC+, global oil and natural gas commodity prices continue to remain volatile. The volatility and uncertainty of natural gas, crude oil and NGL prices impact drilling, completion and other investment decisions by producers, and ultimately supply to our systems. Although ongoing armed conflicts might generate commodity price upward pressure, and our operations could benefit in an environment of higher natural gas, NGLs and condensate prices, the instability of the international political environment and human and economic hardship resulting from the conflicts would have a highly uncertain impact on the U.S. economy, which in turn, might affect our business and operations adversely. Moreover, the impact of new and proposed tariffs by the Trump Administration and foreign governments is highly uncertain, and could lead to depressed commodity prices if such tariffs result in a recession. Our product sales revenue is exposed to commodity price fluctuations. Therefore, commodity price decline and sustained periods of low natural gas, NGL and condensate prices could have an adverse effect on our product revenue stream. The Company continues to monitor commodity prices closely and may enter into commodity price hedges from time to time as necessary to mitigate the volatility risk. In addition, the Company, when economically appropriate, enters into fee-based and NGL arbitrage arrangements that insulate the Company from commodity price volatility.

Current wording

There has been, and we believe there will continue to be, volatility in commodity prices and in the relationships among NGLs, crude oil and natural gas prices. As a result of uncertainty around global commodity supply and demand, global geopolitical conflicts, foreign and domestic trade policies implemented by the Trump Administration and response thereto, and recent action by OPEC+, global oil and natural gas commodity prices continue to remain volatile. The volatility and uncertainty of natural gas, crude oil and NGL prices impact drilling, completion and other investment decisions by producers and ultimately supply to our systems. Although ongoing armed conflicts might generate commodity price upward pressure, and our operations could benefit in an environment of higher natural gas, NGLs and condensate prices, the instability of the international political environment and human and economic hardship resulting from the conflicts would have a highly uncertain impact on the U.S. economy, which in turn, might affect our business and operations adversely. Moreover, the impact of new and proposed tariffs by the Trump Administration and foreign governments is highly uncertain. Our product sales revenue is exposed to commodity price fluctuations. Therefore, commodity price decline and sustained periods of low natural gas, NGL, and condensate prices could have an adverse effect on our product revenue stream. The Company continues to monitor commodity prices closely and may enter into commodity price hedges from time to time as necessary to mitigate the volatility risk. In addition, the Company, when economically appropriate, enters into fee-based and NGL arbitrage arrangements that insulate the Company from commodity price volatility.

Previous wording

In addition, our business requires access to steel and other materials to construct and maintain our pipelines and other midstream assets. Any imposition of or increase in tariffs on imports of steel or other materials, as well as corresponding price increases for such materials available domestically, could increase our construction costs and our costs to maintain our assets. The Company continues to monitor costs of materials used for capital expenditure and consider budget-to-actual and forecast-to-actual variances on a monthly basis to mitigate volatility risk. See Part II, Item 1A. Risk Factors for additional discussion.

Current wording

In addition, our business requires access to steel and other materials to construct and maintain our pipelines and other midstream assets. Imposition of, or increase, in tariffs on imports of steel or other materials, as well as corresponding price increases for such materials available domestically, could increase our construction costs and our costs to maintain our assets. The Company continues to monitor costs of materials used for capital expenditure and considers budget-to-actual and forecast-to-actual variances on a monthly basis to mitigate volatility risk. See Part II, Item 1A. Risk Factors for additional discussion.

Previous wording

The annual rate of inflation in the United States was 2.4% in March 2025 as measured by the Consumer Price Index. In light of the recent economic activity, unemployment levels and tariffs proposed and implemented by the Trump Administration, the Federal Open Market Committee (the “ FOMC”) decided to maintain the target range for the federal funds rate at 4.25 % - 4.50% during its meeting in March 2025. During the meeting, the FOMC noted that the uncertainty around the economic outlook has increased, and inflation remains somewhat elevated. The Committee is attentive to the risks to both sides of its dual mandate and is strongly committed to supporting maximum employment and returning inflation to its 2.00% objective. If interest rates remain elevated beyond the term of our hedges, our financing cost will increase and could have a negative impact on the Company’s ability to meet its contractual debt obligations and to fund its operating expenses and capital expenditures. The Company will continue to monitor the FOMC’s monetary policy and interest rate movement. Refer to Note 11—Derivatives and Hedging Activities in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for additional discussion regarding our hedging strategies and objectives for interest rate risk.

Current wording

The annual rate of inflation in the United States was 2.7% in June 2025 as measured by the Consumer Price Index. In light of the recent economic activity, unemployment levels and tariffs proposed and implemented by the Trump Administration, the Federal Open Market Committee (the “FOMC”) decided to maintain the target range for the federal funds rate at 4.25 % - 4.50% during its meeting in July 2025. During the meeting, the FOMC noted although recent economic indicators suggest that growth of economic activity moderated in the first half of the year and labor market conditions remain solid, uncertainty about the economic outlook remains elevated and inflation remains somewhat elevated. The FOMC also noted that it is attentive to the risks to both sides of its dual mandate and is committed achieve maximum employment and inflation of 2.00% over the long run. The Company will continue to monitor the FOMC’s monetary policy and interest rate movement. Refer to Note 12—Derivatives and Hedging Activities in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for additional discussion regarding our hedging strategies and objectives for interest rate risk.

Previous wording

(1)Costs of sales (exclusive of depreciation and amortization) is net of gas service fees totaling $62.2 million and $44.5 million for the three months ended March 31, 2025 and 2024, respectively, for certain volumes, where we act as principal.

Current wording

(1)Costs of sales (excluding depreciation and amortization) is net of gas service fees totaling $73.6 million and $54.7 million for the three months ended June 30, 2025 and 2024, respectively, and $135.8 million and $99.2 million for the six months ended June 30, 2025 and 2024, respectively, for certain volumes, where we act as principal.

Previous wording

For the three months ended March 31, 2025, revenue increased $101.9 million, or 30%, to $443.3 million, compared to $341.4 million for the same period in 2024. The increase was primarily driven by higher service and product revenue from the Durango Acquisition completed in June 2024 and higher service revenue from the Barilla Draw Acquisition completed in January 2025.

Current wording

For the three months ended June 30, 2025, revenue increased $67.3 million, or 19%, to $426.7 million, compared to $359.5 million for the same period in 2024. The increase was primarily driven by higher service and product revenue from the Durango Acquisition completed in June 2024 and the Barilla Draw Acquisition completed in January 2025.

Previous wording

Service revenue consists of service fees paid to us by our customers for providing comprehensive gathering, treating, processing and produced water disposal services necessary to bring natural gas, NGLs and crude oil to market. Service revenue for the three months ended March 31, 2025, increased by $25.7 million, or 25%, to $127.9 million, compared to $102.2 million for the same period in 2024. This increase was driven by higher period-over-period gas gathering fees of $23.1 million. Period-over-period gathered and processed gas volumes increased by 428.6 MMcf per day, or 23% and 262.1 MMcf per day, or 17%, respectively. Of the increase, Durango’s operation accounted for 234.3 MMcf per day and 197.4 MMcf per day of gathered and processed gas volume, respectively. Barilla Draw operations accounted for 141.9 MMcf per day of gathered gas volume. Over 98% of service revenues are included in the Midstream Logistics segment.

Current wording

Service revenue consists of service fees paid to us by our customers for providing comprehensive gathering, treating, processing and produced water disposal necessary to bring natural gas, NGLs and crude oil to market. Service revenue for the three months ended June 30, 2025, increased by $16.2 million, or 17%, to $112.7 million, compared to $96.4 million for the same period in 2024. This increase was driven by higher period-over-period gas gathering fees of $14.0 million. Period-over-period gathered and processed gas volumes increased by 377.8 MMcf per day, or 20% and 181.2 MMcf per day, or 12%, respectively. Of the increase, Durango’s operations accounted for 215.0 MMcf per day and 182.7 MMcf per day of gathered and processed gas volume, respectively. Over 97% of service revenues are included in the Midstream Logistics segment for the three months ended June 30, 2025.

Previous wording

Product revenue consists of commodity sales (including condensate, natural gas residue and NGLs). Product revenue for the three months ended March 31, 2025, increased by $75.9 million, or 32%, to $312.5 million, compared to $236.6 million for the same period in 2024, primarily due to increased NGL and condensate volumes sold and increased natural gas residue prices. Period-over-period NGL and condensate volumes sold increased 6.2 million barrels, or 99%, of which, Durango’s operations accounted for 1.5 million barrels. Increased period-over-period natural gas prices of $0.90 per MMBtu, or 50%, also contributed to the increase in product revenue. These increases were partially offset by a decrease in condensate prices of $7.12 per barrel, or 9%, and a decrease in natural gas residue volume sold of 7.5 million MMBtu, or 42.1%. Product revenues are included entirely in the Midstream Logistics segment.

Current wording

Product revenue consists of commodity sales (including condensate, natural gas residue and NGLs). Product revenue for the three months ended June 30, 2025, increased by $51.5 million, or 20%, to $311.6 million, compared to $260.1 million for the same period in 2024, primarily due to increased NGL, condensate and natural gas residue volumes sold and increased natural gas residue prices. Period-over-period NGL and condensate volumes sold increased 3.8 million barrels, or 39%, of which, Durango’s operations accounted for 1.5 million barrels. Period-over-period natural gas residue volumes sold increased 2.3 million MMBtu, or 23%, of which Durango’s operations accounted for most of the increase. Period-over-period natural gas prices increased $0.75 per MMBtu, or 70%, which also contributed to the increase in product revenue. These increases were partially offset by decreases in NGL and condensate prices of $8.45 per barrel, or 11%, and $2.81 per barrel, or 12%, respectively. Product revenues are included entirely in the Midstream Logistics segment.

Previous wording

Cost of sales (exclusive of depreciation and amortization) primarily consists of purchases of NGLs and natural gas from our producers at contracted market prices to support product sales to other third parties. For the three months ended March 31, 2025, cost of sales increased $69.7 million, or 45%, to $223.4 million, compared to $153.7 million for the same period in 2024. The increase was primarily driven by the aforementioned period-over-period increases in NGL and condensate volumes sold and higher natural gas residue prices, partially offset by decreases in condensate prices and natural gas residue sales volumes. Over 99% of costs of sales (exclusive of depreciation and amortization) is included in the Midstream Logistics segment.

Current wording

Cost of sales (excluding depreciation and amortization) primarily consists of purchases of NGLs and natural gas from our producers at contracted market prices to support product sales to other third parties. For the three months ended June 30, 2025, cost of sales increased $10.2 million, or 7%, to $156.7 million, compared to $146.5 million for the same period in 2024. The increase was primarily driven by the aforementioned period-over-period increases in NGL, condensate and natural gas residue volumes sold and higher natural gas residue prices, partially offset by decreases in NGL and condensate prices. Over 99% of costs of sales (excluding depreciation and amortization) is included in the Midstream Logistics segment.

Previous wording

Operating expenses increased by $20.2 million, or 47%, to $63.6 million for the three months ended March 31, 2025, compared to $43.4 million for the same period in 2024. Of the total increase, $14.2 million was driven by Durango’s operations that were acquired during June 2024 and $2.6 million was driven by the Barilla Draw operations acquired. The remaining increase was mainly driven by increases in labor costs of $1.3 million and utilities of $2.1 million. Over 99% of operating expenses are included in the Midstream Logistics segment.

Current wording

Operating expenses increased by $24.0 million, or 54%, to $68.0 million for the three months ended June 30, 2025, compared to $44.1 million for the same period in 2024. Of the total increase, $13.5 million was driven by Durango’s operations that were acquired in June 2024, which had a full quarter of operations in 2025 compared to one week of operations in the same period of 2024, and $7.1 million was driven by the Barilla Draw operations acquired in January 2025. The remaining increase was primarily driven by increases in utility costs of $3.7 million. Over 99% of operating expenses are included in the Midstream Logistics segment.

Previous wording

Depreciation and amortization expense increased by $19.1 million, or 26%, to $92.7 million for the three months ended March 31, 2025, compared to $73.6 million for the same period in 2024. Of the total increase, $12.5 million was driven by the Durango Acquisition that was completed during June 2024 and $2.5 million from the Barilla Draw Acquisition. The remaining increase was driven by assets placed in service since the second quarter of 2024.

Current wording

Depreciation and amortization expense increased by $18.7 million, or 25% to $93.8 million for the three months ended June 30, 2025, compared to $75.1 million for the same period in 2024. Of the total increase, $12.5 million was driven by the Durango Acquisition that was completed during June of 2024 and $2.4 million is from the Barilla Draw Acquisition completed in January 2025. The remaining increase of $3.8 million was driven by assets placed into service since the second quarter of 2024.

Previous wording

Interest expense increased by $8.2 million, or 17%, to $55.7 million for the three months ended March 31, 2025. The increase was primarily driven by a decrease in realized and unrealized gains on interest rate swaps totaling $13.0 million during the three months ended March 31, 2025 compared to the same period in 2024. Refer to Note—11 Derivatives and Hedging Activities in the Notes to Condensed Consolidated Financial Statements regarding the Company’s strategy in managing interest rate risk. The increase in interest expense was partially offset by a decrease in debt interest expense of $2.7 million due to a decrease in effective interest rate and an increase in capitalized interest of $2.4 million.

Current wording

Interest expense increased by $10.7 million, or 11%, to $112.2 million for the six months ended June 30, 2025, compared to $101.5 million for the same period in 2024. The increase in interest expense was primarily driven by a decrease in realized and unrealized gains on interest rate swaps totaling $16.4 million. The increase was partially offset by an increase in capitalized interest of $5.9 million related to the ongoing Kings Landing Project. Refer to Note—12 Derivatives and Hedging Activities in the Notes to Condensed Consolidated Financial Statements regarding the Company’s strategy in managing interest rate risk.

Previous wording

Adjusted EBITDA is defined as net income including noncontrolling interests adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets, the proportionate EBITDA from our EMI pipelines, share-based compensation expense, noncash increases and decreases related to commodity hedging activities, 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.

Current wording

Adjusted EBITDA is defined as net income including noncontrolling interest 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 commodity hedging activities, 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.

Previous wording

Adjusted EBITDA increased by $16.5 million, or 7%, to $250.0 million for the three months ended March 31, 2025, compared to $233.6 million for the same period in 2024. As discussed in the Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report on Form 10-Q, $8.1 million of the increase was due to increased total operating revenue of $101.9 million, partially offset by increased cost of sales (exclusive of depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expense of $93.8 million. The remaining increases were primarily driven by higher integration and other one-time costs or amortization of $7.7 million and an increase in commodity hedging unrealized loss of $3.0 million. These increases were partially offset by a decrease in stock based compensation of $1.9 million.

Current wording

Adjusted EBITDA increased by $8.5 million, or 4%, to $242.9 million for the three months ended June 30, 2025, compared to $234.4 million for the same period in 2024. As discussed in the Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report on Form 10-Q, $39.6 million of the increase was due to increased total operating revenue of $67.3 million, offset by increased cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expense totaling $27.7 million. The increase was also driven by an increase in other income of $2.4 million and higher proportionate EBITDA from our EMI pipelines of $2.2 million. These increases were partially offset by an increase in unrealized gain in commodity hedging activities of $29.5 million, a decrease in stock based compensation of $5.4 million and decreases in integration, transaction and other one-time costs or amortization of $0.7 million.

Previous wording

Segment Adjusted EBITDA is defined as segment net earnings adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets, the proportionate EBITDA from our EMI pipelines, share-based compensation expense, noncash increases and decreases related to hedging activities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges. The following table presents Segment Adjusted EBITDA for the three months ended March 31, 2025 and 2024. Also refer to Note 16—Segments in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a reconciliation of Segment Adjusted EBITDA to net income before income taxes.

Current wording

Segment Adjusted EBITDA is defined as segment net income or loss including noncontrolling interest 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 commodity hedging activities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges. The following table presents Segment Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024. Also refer to Note 17—Segments in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a reconciliation of Segment Adjusted EBITDA to net income before income taxes.

Previous wording

Pipeline Transportation Segment Adjusted EBITDA decreased by $1.6 million, or 2%, to $93.9 million for the three months ended March 31, 2025, compared to $95.5 million for the same period in 2024. The decrease was primarily driven by lower operating revenue of $1.1 million and lower proportionate EMI EBITDA of $0.9 million due to the sale of the Company’s equity interest in Gulf Coast Express Pipeline LLC in May 2024. The decrease was partially offset by decreases in operating costs and expenses of $0.3 million. The reasons for the fluctuations are discussed in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report on Form 10-Q.

Current wording

Pipeline Transportation Segment Adjusted EBITDA increased by $3.2 million, or 3%, to $96.8 million for the three months ended June 30, 2025, compared to $93.5 million for the same period in 2024. The increase was primarily driven by higher operating revenue of $1.2 million and higher proportionate EMI EBITDA of $2.2 million. The increase was partially offset by increased cost of sales (exclusive of depreciation and amortization) of $0.3 million. The reasons for the fluctuations are discussed in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report on Form 10-Q.

Previous wording

We have contractual obligations for principal and interest payments on our 2028 Notes, 2030 Notes, and under the Term Loan Credit Facility, Revolving Credit Facility and A/R Facility. See Note 7—Debt and Financing Costs in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Current wording

We have contractual obligations for principal and interest payments on our 2028 Notes, 2030 Notes, and under the Term Loan Credit Agreement, Revolving Credit Agreement and the Amended A/R Facility. See Note 7—Debt and Financing Costs in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Previous wording

The Company’s primary use of capital since inception has been for the initial construction of gathering and processing assets, as well as the acquisitions of businesses and EMI pipelines and associated subsequent construction costs. For 2025, the Company’s primary spending requirements are related to the business acquisitions and other budgeted capital expenditures for the construction and maintenance of gathering and processing assets, the Company’s contractual debt obligations and quarterly cash dividends. In addition, the Company may repurchase its Class A Common Stock pursuant to the Share Repurchase Program from time to time.

Current wording

The Company’s primary use of capital since inception has been for the initial construction of gathering and processing assets, as well as the acquisitions of businesses and EMI pipelines and associated subsequent construction costs. For 2025, the Company’s primary spending requirements are related to the business acquisitions and other budgeted capital expenditures for the construction and maintenance of gathering and processing assets, the Company’s contractual debt obligations, quarterly cash dividends and repurchase of its Class A Common Stock pursuant to the Board approved share repurchase program from time to time.

Previous wording

During the three months ended March 31, 2025, the Company’s primary sources of cash were distributions from the EMI pipelines, borrowings under the Revolving Credit Facility and A/R Facility, and cash generated from operations. Based on the Company’s current financial plan, the Company believes that cash from operations and distributions from the EMI pipelines, and remaining borrowing capacity on our credit facilities will generate cash flows in excess of capital expenditures and the amount required to fund the Company’s planned quarterly dividend over the next 12 months.

Current wording

During the six months ended June 30, 2025, the Company’s primary sources of cash were distributions from the EMI pipelines, borrowings under the revolving credit facility and A/R Facility, and cash generated from operations. Based on the Company’s current financial plan, the Company believes that cash from operations and distributions from the EMI pipelines, and remaining borrowing capacity on our credit facilities will generate cash flows in excess of capital expenditures and the amount required to fund the Company’s planned quarterly dividend over the next 12 months. The following table presents a summary of the Company’s key liquidity indicators at the dates presented:

Previous wording

From time to time, we issue long-term debt. Our senior unsecured notes are fixed rate borrowings; however, we have some exposure to the risk of changes in interest rates, primarily as a result of the variable rate borrowings under the Revolving Credit Facility, the Term Loan Credit Facility and the A/R Facility. We use interest rate swaps to mitigate the impact of changes in interest rates on cash flows. See Note 11—Derivatives and Hedging Activities in the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report for detailed discussion.

Current wording

From time to time, we issue long-term debt. Our senior unsecured notes are fixed rate borrowings; however, we have some exposure to the risk of changes in interest rates, primarily as a result of the variable rate borrowings under the term loan and revolving credit facilities and the A/R Facility. We use interest rate swaps to mitigate the impact of changes in interest rates on cash flows. See Note 12—Derivatives and Hedging Activities in the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report for detailed discussion.

Previous wording

As of March 31, 2025, we had $1.05 billion of our 6.625% senior unsecured notes due 2028 and $1.00 billion of our 5.875% senior unsecured notes due 2030 outstanding. The Term Loan Credit Facility and the Revolving Credit Facility, both with variable rates and maturing in 2026 and 2027, had outstanding borrowings of $1.00 billion and $545.0 million as of March 31, 2025, respectively.

Current wording

As of June 30, 2025, we had $1.05 billion of our 6.625% senior unsecured notes due 2028 and $1.00 billion of our 5.875% senior unsecured notes due 2030 outstanding.

Previous wording

Our operations can be capital intensive, requiring investments to expand, upgrade, maintain or enhance existing operations and to meet environmental and operational regulations. During the three months ended March 31, 2025 and 2024, capital spending for property, plant and equipment totaled $74.5 million and $58.0 million, respectively, intangible asset purchases totaled $6.9 million and $2.2 million, respectively, and contributions to EMI totaled $0.9 million and $3.3 million, respectively. The increase in capital spending was mainly related to the Kings Landing Project, which is expected to be completed in mid-2025. Management believes its existing gathering, processing and transmission infrastructure capacity and future planned projects are capable of fulfilling its midstream contracts to service its customers.

Current wording

Our operations can be capital intensive, requiring investments to expand, upgrade, maintain or enhance existing operations and to meet environmental and operational regulations. During the six months ended June 30, 2025 and 2024, capital spending for property, plant and equipment totaled $201.8 million and $97.4 million, respectively, intangible asset purchases totaled $15.6 million and $2.8 million, respectively, and contributions to EMI totaled $1.0 million and $3.3 million, respectively. The increase in capital spending was mainly related to the Kings Landing Project, which is expected to be completed in the third quarter of 2025. Management believes its existing gathering, processing and transmission infrastructure capacity and future planned projects are capable of fulfilling its midstream contracts to service its customers.

Previous wording

Operating activities. Net cash provided by operating activities increased by $23.1 million for the three months ended March 31, 2025 compared with the same period in 2024. The change in the operating cash flows reflected (i) a decrease in net income including noncontrolling interest of $16.1 million; (ii) an increase in adjustments related to non-cash items of $12.9 million, which was mainly driven by increases in unfavorable derivative fair value adjustments of $20.2 million and depreciation and amortization expense of $19.1 million, partially offset by decreases in distribution from unconsolidated affiliates of $13.9 million, derivatives settlements of $8.5 million and loss on disposal of assets of $4.2 million; and (iii) an increase in working capital of $26.4 million.

Current wording

Operating activities. Net cash provided by operating activities increased by $26.7 million for the six months ended June 30, 2025 compared with the same period in 2024. The change in the operating cash flows reflected (i) a decrease in net income including noncontrolling interest of $50.7 million; (ii) an increase in adjustments related to non-cash items of $39.9 million, which was mainly driven by a decrease in gain related to sale of equity method investment of $59.9 million and an increase in depreciation and amortization expense of $37.8 million, partially offset by a decrease in distribution from unconsolidated affiliates of $25.7 million, and a favorable derivative fair value adjustment of $15.4 million compared to an unfavorable derivative fair value adjustment of $6.6 million in the same period in 2024; and (iii) an increase in working capital of $37.5 million.

Previous wording

Investing activities. Net cash used in investing activities increased by $198.2 million for the three months ended March 31, 2025 compared with the same period in 2024. The increase was primarily driven by net cash used in the Barilla Draw Acquisition of $178.4 million and higher capital spending for property, plant and equipment of $16.6 million and intangible assets of $4.7 million. The increase was partially offset by a decrease in investments in unconsolidated affiliates of $2.4 million.

Current wording

Investing activities. Net cash used in investing activities was $391.6 million for the six months ended June 30, 2025 compared to net cash provided by investing activities of $43.3 million in the same period in 2024. The change was primarily driven by net cash used in the Barilla Draw Acquisition of $176.2 million and higher capital spending for property, plant and equipment of $104.5 million and intangible assets of $12.8 million. Cash provided by investing activities for the six months ended June 30, 2024 was primarily driven by proceeds from sale of equity method investment of $494.4 million, partially offset by net cash paid for the Durango acquisition of $349.3 million and capital spending for property, plant and equipment and intangible assets of $100.1 million.

Previous wording

Financing activities. Net cash provided by financing activities was $88.5 million for the three months ended March 31, 2025, which was primarily comprised of net proceeds from the long-term debt, Revolving Credit Facility and A/R Facility of $211.7 million, partially offset by cash dividends of $123.2 million paid to the holders of Class A Common Stock and Common Units, compared with net cash used in financing activities of $86.5 million for the three months ended March 31, 2024, which was primarily comprised of net payments to the Company’s Revolving Credit Facility of $47.0 million and cash dividends of $39.5 million paid to the holders of Class A Common Stock and Common Units.

Current wording

Financing activities. Net cash provided by financing activities was $92.8 million for the six months ended June 30, 2025, which was primarily comprised of net proceeds from the long-term debt, revolving credit facility and A/R Facility of $412.2 million, partially offset by cash dividends of $246.8 million paid to the holders of Class A Common Stock and Common Units and share repurchases of $72.6 million, compared with net cash used in financing activities of $314.5 million for the six months ended June 30, 2024, which was primarily comprised of net payments on the Company’s long-term debt, revolving credit facility and A/R Facility of $159.8 million and cash dividends of $154.7 million paid to the holders of Class A Common Stock and Common Units.

Previous wording

During the three months ended March 31, 2025, the Company made cash dividend payments of $123.2 million to holders of Class A Common Stock and Common Units and $0.4 million was reinvested in shares of Class A Common Stock by the Reinvestment Holders.

Current wording

During the six months ended June 30, 2025, the Company made cash dividend payments of $246.8 million to holders of Class A Common Stock and Common Units and $0.7 million was reinvested in shares of Class A Common Stock by the Reinvestment Holders.