Kinetik Holdings Inc.

16. NET INCOME PER SHARE

EPS is computed by dividing net income attributable to common shareholders by the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS is computed by dividing net income attributable to the Company by the weighted average number of shares of Common Stock outstanding and the assumed issuance of all potentially dilutive securities. Each issue of potential common shares is evaluated separately in sequence from the most dilutive to the least dilutive. The dilutive effect of share-based payment awards and stock options is calculated using the treasury stock method, which assumes share purchases are calculated using the average share price of the Company’s Common Stock during the applicable period. The Company uses the if-converted method to compute potential common shares exchanged from potentially dilutive Common Units. Under the if-converted method, dilutive Common Units are assumed to be exchanged from the date of the issuance and the resulting shares of Class A Common Stock are included in the denominator of the diluted EPS calculation for the period being presented.

The following table sets forth a reconciliation of net income and weighted average shares outstanding used in computing basic and diluted net income per common share:

(1)Represents dividends paid to unvested Class A Shares, and Class C Shares, RSUs and PSUs.

(2)The effect of an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for the years ended December 31, 2025 and 2024.

(3)Includes dilutive effect from both RSUs and PSUs on unvested Class A common shares.

17. COMMITMENTS AND CONTINGENCIES

Accruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. As of December 31, 2025 and 2024, there wereno material accruals for loss contingencies.

Litigation

The Company is a party to various legal actions arising in the ordinary course of its business. In accordance with FASB ASC 450, Contingencies, the Company accrues reserves for outstanding lawsuits, claims and proceedings when a loss contingency is probable and can be reasonably estimated. The Company expenses legal costs as incurred and estimates the amount of loss contingencies using current available information from legal proceedings, advice from legal counsel and other relevant external experts. Due to the inherent subjectivity of the assessments and unpredictability of the outcomes of any legal proceedings, any amounts estimated or accrued may not represent the ultimate loss to the Company from the legal proceedings in question.

The Company and certain of its affiliates are currently defending againsttwo lawsuits brought by Energy Transfer GC NGL Product Services, LLC (formerly Lone Star NGL Product Services, LLC) individually and on behalf of certain of its affiliates, which allege breach of contract and related tort claims arising fromtwo long-term NGL purchase agreements, and which seek remedies in the form of monetary damages, declaratory relief, and specific performance. The first lawsuit was filed in 2021, and the second was filed in 2025 to assert similar claims against additional subsidiaries of the Company. The lawsuits have been consolidated in Texas Business Court and are set to proceed to a bench trial on March 30, 2026. The Company intends to vigorously defend against these claims. At this time, the Company has accrued immaterial reserves, however, we cannot predict with certainty how these matters may ultimately be resolved.

As previously disclosed, the Company is involved intwo litigation matters arising from Winter Storm Uri in February 2021. The first matter relates to the Company’s efforts to recover approximately $11.6 million in receivables from a third party. The second matter involves a dispute with another counterparty concerning approximately $8.0 million in vendor credits. The parties have asserted counterclaims against one another, and the ultimate outcome remains uncertain given the current stage of the proceedings. Based on the creditworthiness of the counterparties and management’s assessment of the claims, defenses, and related uncertainties, no allowances have been recorded. The Company will continue to monitor developments in both matters and update its evaluation as warranted.

Environmental Matters

The Company is subject to various local, state, and federal laws and regulations relating to various environmental matters during the ordinary course of business. Although we believe our operations are in substantial compliance with applicable environmental laws and regulations, risks of additional costs and liabilities are inherent in our operations. Moreover, changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly requirements could require the Company to make significant expenditures to attain and maintain compliance or may otherwise have a material adverse effect on its operations, competitive position, or financial condition.

As of the Durango Closing Date, the Company has become potentially liable for civil penalties related to excess emission violations of certain gas plants and compressor stations acquired. The Company recorded an initial liability of $24.0 million based on information related to the alleged violations available as of the Durango Closing Date. The estimated environmental matter-related liability was $14.0 million and $24.0 million as of December 31, 2025 and 2024, respectively. The estimated environmental matter-related liability was classified as a noncurrent liability and included in “Other liabilities” in the Consolidated Balance Sheets as of December 31, 2025 as the Company expects the matter to be settled beyond the next 12 months. The revision of the estimated liability was based on information available to both management and external subject matter experts in identifying penalties, cost of remediations and probable settlement outcomes. The change in estimated environmental matter-related liability of $10.0 million was included in “Operating expenses” of the Consolidated Statement of Operations for the year ended December 31, 2025.

Contingent Liabilities

Durango Acquisition

On June 24, 2024, the Company consummated the previously announced Durango Acquisition. Pursuant to the Durango MIPA, Durango Seller is entitled to an earnout of up to $75.0 million in cash contingent upon the completion of the Kings Landing Project and placing it into service in Eddy County, New Mexico. This earnout is subject to reduction based on actual capital costs associated with the Kings Landing Project.

Upon closing, the Company evaluated the earnout consideration classification in accordance with ASC 480. The Company determined the earnout consideration to be classified as a liability based on the settlement provision. As of closing of the Durango Acquisition, the Company recorded an initial contingent liability based on the project’s completion probability and projected expenditure. The estimated contingent liability associated with the Kings Landing Project was $4.7 million as of December 31, 2024. In the fourth quarter 2025, the Company paid $9.9 million to settle the contingent liability, which amount, in accordance with the MIPA, is subject to review by the Durango Seller, and may be subject to adjustment. Pursuant to ASC 805, the Company recorded fair value adjustments of $5.2 million and $0.2 million within “Costs of sales (excluding of depreciation and amortization expenses)” of the Consolidated Statement of Operations for the years ended December 31, 2025 and 2024, respectively.

2019 PDC Acquisition

As part of the acquisition of Permian Gas on June 11, 2019, consideration included a contingent liability arrangement with PDC Permian, Inc. (“PDC”). The arrangement requires additional monies to be paid by the Company to PDC on a per Mcf basis if the actual annual Mcf volume amounts exceed forecasted annual Mcf volume amounts starting in 2020 and continuing through 2029. The total monies paid under this arrangement are capped at $60.5 million and are payable on an annual basis over the earnout period. PDC’s actual annual Mcf volume did not exceed the incentive forecast volume during the pastsix years and is not expected to over the next four years; therefore, the estimated fair value of the contingent consideration liability waszero as of December 31, 2025 and 2024.

18. RELATED PARTY TRANSACTIONS

Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition. FASB ASC 850, Related Party Transactions (“Topic 850”), requires that transactions with related parties that would make a difference in decision making shall be disclosed so that users of the financial statements can evaluate their significance.

Upon closing of the Altus Acquisition, Apache Midstream LLC (“Apache”) owned more than 10% of the Company’s issued and outstanding Common Stock. The Company has product and service revenue contracts and operating expense contracts with Apache. Through secondary offerings completed in December 2023 and March 2024, Apache sold all of the Company’s Class A Common Stock it owned. Pursuant to FASB ASC 850, Apache was no longer a related party after the completion of its secondary offering in December 2023 as it owned less than 10% of the Company’s Common Stock. Pursuant to Regulation S-K, Item 404(a), Apache ceased to be a related party as of March 18, 2024 as it no longer owned any of the Company’s Common Stock.

The Company also has equity interests in PHP and Breviloba as of December 31, 2025. Investments in these EMIs are accounted for using the equity investment method and are considered unconsolidated affiliates. The Company makes contributions, receives distributions and records equity in earnings or losses from these EMIs. See Note 7—Equity Method Investments in the Notes to our Consolidated Financial Statements in this Annual Report for further information. In addition to equity investment activities, the Company pays a demand fee to PHP and a capacity fee to Breviloba for certain volumes transported on the Shin Oak pipeline.

The following table summarizes transactions with the above related parties. Investment contributions, distributions and equity in earnings from EMIs are detailed in Note 7—Equity Method Investments in the Notes to our Consolidated Financial Statements in this Annual Report, thus, not included in the table below.

(1)Included activities from Apache for the period from January 1, 2024 through March 18, 2024, on which date Apache ceased to be a related party.

As of December 31, 2025, the Company hadno accounts receivable or accounts payable due from or to related parties. As of December 31, 2024, the Company hadno accounts receivable from Apache and its subsidiaries andimmaterial accounts payable were due to Apache and its subsidiaries.

19. SEGMENTS

Midstream Logistics and Pipeline Transportation are our operating segments representing the Company’s segments for which discrete financial information are available and utilized on a regular basis by our CODM to make key operating decisions, assess performance and allocate resources. These segments represent strategic business units with differing products and services. No operating segments have been aggregated to form the reportable segments. Therefore, ourtwo operating segments represent our reportable segments. The activities of each of our reportable segments from which the Company earns revenues and incurs expenses are described below:

•Midstream Logistics: The Midstream Logistics segment operates under three revenue streams, 1) gas gathering and processing, 2) crude oil gathering, stabilization and storage services and 3) produced water gathering and disposal.

•Pipeline Transportation: The Pipeline Transportation segment consists of equity investment interests intwo Permian Basin pipelines that access various points along the U.S. Gulf Coast and Mexico markets, Kinetik NGL Pipelines, Brandywine Pipeline and Delaware Link Pipeline. The current operating pipelines transport natural gas and NGLs.

Our Chief Executive Officer, who is the CODM, uses 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, fair value adjustments to contingent liabilities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges (“Segment Adjusted EBITDA”) to assess performance of each operating segment. For both segments, the CODM uses Segment Adjusted EBITDA to allocate resources. The CODM considers budget-to-actual and forecast-to-actual variances on a monthly basis for both measures when making decisions about allocating capital and personnel to the segments.

The Midstream Logistics segment accounts for more than 99% of the Company’s operating revenues, cost of sales (excluding depreciation and amortization expenses), operating expenses and ad valorem expenses. The Pipeline Transportation segment contains all of the Company’s equity method investments, which contribute more than 91% of the Segment’s Adjusted EBITDA. Corporate and Other contains the Company’s executive and administrative functions, including more than 80% of the Company’s general and administrative expenses.

The Company regularly provides management reports to the CODM that include cost of sales, operating expenses, and general and administrative expenses related to the segments, which are all considered to be significant.

The following tables present the Segment Adjusted EBITDA of the Company’s reportable segments and reconciliations of the segment profits to consolidated income before income tax expenses for the years ended December 31, 2025, 2024 and 2023:

(1)Corporate and Other represents those results that: (i) are not specifically attributable to an operating segment; (ii) are not individually reportable; or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items. Items included here to reconcile operating segments profit and loss with the Company’s consolidated profit and loss.

(2)The Company accounts for intersegment sales at market prices, while it accounts for asset transfers at book value. Intersegment revenue is eliminated at consolidation.

(3)Operating expenses includes ad valorem taxes.

(4)Other segment items include certain other income items, share-based compensation, adjustments related to amortization of contract costs, fair value adjustments to contingent liabilities, commodity hedging unrealized gain or loss, integration costs, acquisition/divestiture costs, litigation costs and other one-time costs or amortization.

(5)Segment adjusted EBITDA is a non-GAAP measure; please see Key Performance Metrics in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report, for a definition and reconciliation to the GAAP measure.

The following tables present supplemental segment information that are not included in the segment profit measurements above for the years ended December 31, 2025, 2024 and 2023:

(1)Corporate and Other represents those results that: (i) are not specifically attributable to an operating segment; (ii) are not individually reportable; or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

(2)Excludes capital assets acquired in the Company’s business combinations that are included in the Midstream Logistic segment. See Note 3—Business Combinations in the Notes to our Consolidated Financial Statements in this Annual Report for additional information.

(3)Excludes contributions, acquisition and divestiture of equity interest in the Company’s EMIs that are included in Pipeline Transportation segment. See Note 7—Equity Method Investmentsin the Notes to our Consolidated Financial Statements in this Annual Report for additional information.

(4)Midstream Logistics segment included goodwill of $5.1 million as of December 31, 2025 and 2024.

(5)Pipeline Transportation segment included investment in unconsolidated affiliates of $2.01 billion and $2.12 billion as of December 31, 2025 and 2024, respectively.