Kinetik Holdings Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
KNTK$48.77-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001692787-26-000092
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001692787-26-000116
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 117 current paragraphs.
60 unchanged; 35 reworded; 19 added; 3 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
For the three months ended June 30, 2026, revenue increased by $154.7 million, or 36%, to $581.4 million, compared to $426.7 million for the same period in 2025. The increase was primarily driven by higher product revenue due to higher NGL, condensate and natural gas residue volumes sold, as well as higher NGL and condensate prices.
Current report
Product revenue for the three months ended June 30, 2026 increased by $179.2 million, or 58%, to $490.8 million compared to $311.6 million for the same period in 2025, primarily driven by increases in NGL, condensate, and natural gas residue volumes, as well as increased NGL and condensate prices. Period-over-period NGL and condensate volumes sold increased by 5.4 million barrels, or 40%, and period-over-period natural gas residue volumes sold increased by 5.5 million MMBtu, or 44%. The increase was also driven by increases in NGL and condensate prices of $3.52 per barrel, or 18%, and $35.49 per barrel, or 56%, respectively. The increase was partially offset by a decrease in natural gas residue price of $2.56 per MMBtu, or 140%. Product revenues are included entirely in the Midstream Logistics segment.
Current report
Income Tax Expenses
Current report
Income tax expense increased by $7.1 million, or 97%, to $14.4 million for the three months ended June 30, 2026, compared to $7.3 million for the same period in 2025. The increase was primarily driven by higher income before income taxes for the three months ended June 30, 2026.
Current report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Current report
Revenues
Current report
For the six months ended June 30, 2026, revenue increased by $121.4 million, or 14%, to $991.4 million, compared to $870.0 million for the same period in 2025. The increase was primarily driven by higher product revenue due to higher NGL, condensate and natural gas residue volumes sold and higher condensate prices.
Current report
Service revenue
Current report
Service revenue for the six months ended June 30, 2026 decreased by $59.9 million, or 25%, to $180.7 million, compared to $240.6 million for the same period in 2025, driven by a period-over-period decrease in gathered gas volumes of 85.8 MMcf per day, or 4%, partially offset by a period-over-period increase in processed gas volumes of 6.2 MMcf per day, or 0.4%. In addition, the total gathered and processed gas volumes where we function as the principal increased period-over-period, resulting in higher amounts of fee revenue reported within cost of sales. Over 97% of service revenues are included in the Midstream Logistics segment for the six months ended June 30, 2026.
Current report
Product revenue
Current report
Product revenue for the six months ended June 30, 2026 increased by $178.9 million, or 29%, to $803.0 million, compared to $624.1 million for the same period in 2025, primarily driven by increases in NGL, condensate, and natural gas residue volumes sold and an increase in condensate prices. Period-over-period NGL and condensate volumes sold increased by 8.6 million barrels, or 33%, and period-over-period natural gas residue volumes sold increased by 6.4 million MMBtu, or 29%. The increase was also driven by an increase in condensate prices of $16.83 per barrel, or 25%. These increases were partially offset by decreases in NGL and natural gas residue prices of $0.92 per barrel, or 4%, and $1.98 per MMBtu, or 87%, respectively. Product revenues are included entirely in the Midstream Logistics segment.
Current report
Operating Costs and Expenses
Current report
Operating expenses
Current report
Operating expenses increased by $10.6 million, or 8%, to $142.2 million for the six months ended June 30, 2026, compared to $131.6 million for the same period in 2025. The increase was mainly driven by increases in utility costs of $9.2 million primarily related to higher electricity rates and the Kings Landing processing complex going into service during September 2025, and higher labor costs of $3.0 million, primarily related to Kings Landing. The increase was partially offset by a decrease in equipment rental cost of $2.5 million. Over 99% of operating expenses are included in the Midstream Logistics segment.
Current report
Depreciation and amortization expense
Current report
For the three months ended June 30, 2026, Adjusted EBITDA increased by $37.9 million, or 16%, to $280.8 million, compared to $242.9 million for the same period in 2025. As discussed in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report, the change was driven by higher operating revenues of $154.7 million, partially offset by higher cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $88.6 million, a decrease in proportionate EMI EBITDA of $13.2 million, primarily resulting from the divestiture of the Company’s equity interest in EPIC, and an increase in unrealized gain on commodity hedging activities of $11.9 million.
Current report
For the six months ended June 30, 2026, Adjusted EBITDA increased by $39.0 million, or 8%, to $532.0 million, compared to $493.0 million for the same period in 2025. As discussed in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report, the change reflected higher operating revenues of $121.4 million, partially offset by higher cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $69.3 million, a decrease in proportionate EMI EBITDA of $30.7 million, primarily resulting from the divestiture of the Company’s equity interest in EPIC, and a decrease in unrealized gain on commodity hedging activities of $17.0 million.
Current report
Midstream Logistics Segment Adjusted EBITDA increased by $72.3 million, or 23%, to $383.7 million for the six months ended June 30, 2026, compared to $311.4 million for the same period in 2025. The change was primarily driven by higher operating revenues of $121.9 million, partially offset by higher cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $59.9 million, and a decrease in unrealized gain on commodity hedging activities of $17.0 million. The remaining increase was partially offset by a decrease in other income of $2.4 million and lower integration costs of $4.4 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 report
Pipeline Transportation Segment Adjusted EBITDA decreased by $29.7 million, or 16%, to $161.0 million for the six months ended June 30, 2026, compared to $190.7 million for the same period in 2025. The decrease was mainly due to lower proportionate EMI EBITDA of $30.7 million, primarily related to the divestiture of the Company’s equity interest in EPIC during October 2025.
Removed paragraphs (3)
Previous report
For the three months ended March 31, 2026, revenue decreased by $33.3 million, or 8%, to $410.0 million, compared to $443.3 million for the same period in 2025. The decrease was primarily driven by lower gas service revenues on gathered gas volumes where we function as an agent versus principal.
Previous report
Product revenue for the three months ended March 31, 2026 was flat compared to the same period in 2025, due to the confluence of offsetting variables. Period-over-period NGL prices and natural gas residue prices decreased by $5.59 per barrel, or 23% and $1.43 per MMBtu, or 53%, respectively. These pricing decreases were partially offset by period-over-period increases in NGL and condensate volumes sold of 3.2 million barrels, or 26%. Period-over-period increases in natural gas residue sales volumes of 0.9 million MMBtu, or 9%, and condensate prices of $1.08 per barrel, or 2%, also helped partially offset the pricing headwinds. Product revenue was also impacted by our commodity hedging activities. Realized and unrealized losses increased $25.0 million for the three months ended March 31, 2026 compared to the same period in 2025. Product revenues are included entirely in the Midstream Logistics segment.
Previous report
For the three months ended March 31, 2026, Adjusted EBITDA increased by $1.2 million, or 0.5%, to $251.2 million, compared to $250.0 million for the same period in 2025. As discussed in Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report, the change reflected lower operating revenues of $33.3 million, which was primarily driven by an increase in unrealized loss on commodity hedging activities of $28.9 million, thus mostly EBITDA neutral, and lower proportionate EMI EBITDA of $17.5 million, partially offset by lower cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $19.4 million. The remaining decrease was fully offset by higher net one-time costs related primarily to integration and litigation totaling $3.5 million.
Reworded paragraphs (35)
Previous wording
The following discussion and analysis addresses the results of our operations for the three months ended March 31, 2026, as compared to our results of operations for the same period in 2025. 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, 2026, as compared to our results of operations for the same period in 2025. 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
We are an integrated midstream energy company in the Permian Basin providing comprehensive gathering, transportation, compression, processing and treating services. Our core capabilities include a variety of service offerings including natural gas gathering, transportation, compression, treating and processing; NGLs stabilization and transportation; produced water gathering and disposal; and crude oil gathering, stabilization, storage and transportation. Our operations are strategically located in the heart of the Delaware Basin.
Current wording
We are an integrated midstream energy company in the Permian Basin providing comprehensive gathering, transportation, compression, processing and treating services. Our operations are strategically located in the heart of the Delaware Basin in the Permian, one of the fastest growing oil and gas development regions in the world. Our core capabilities include a variety of service offerings including natural gas gathering, transportation, compression, treating and processing; NGL stabilization and transportation; produced water gathering and disposal; and crude oil gathering, stabilization, storage and transportation.
Previous wording
We have two reportable segments with revenue streams from various products and services. 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. The Pipeline Transportation segment consists of two EMI pipelines originating in the Permian Basin with various access points to the U.S. Gulf Coast and Mexico markets, as well as Kinetik NGL and Delaware Link Pipelines. The pipelines transport natural gas and NGLs within the Permian Basin and to the U.S. Gulf Coast.
Current wording
We operate through two reportable segments that generate revenue from various products and services. 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. The Pipeline Transportation segment consists of two EMI pipelines originating in the Permian Basin that provide various access points to the U.S. Gulf Coast and Mexico markets, along with the Kinetik NGL and Delaware Link Pipelines. The pipelines transport natural gas and NGLs within the Permian Basin and to the U.S. Gulf Coast.
Previous 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.
Current wording
Water Gathering and Disposal. The system includes approximately 370 miles of gathering pipeline and approximately 610,000 barrels per day of permitted disposal capacity.
Previous wording
EMI pipelines. The Company owns the following equity interests in two EMI pipelines in the Permian Basin with access to various points along the U.S. Gulf Coast: 1) an approximate 55.5% equity interest in PHP, which is operated by Kinder Morgan; and 2) 33.0% equity interest in Breviloba, the owner of Shin Oak, which is operated by Enterprise Products Operating LLC.
Current wording
EMI pipelines. The Company owns the following equity interests in two EMI pipelines in the Permian Basin with access to various points along the U.S. Gulf Coast: 1) an approximate 55.5% equity interest in PHP, which is operated by Kinder Morgan; and 2) 33.0% equity interest in Breviloba, the owner of the Shin Oak pipeline, which is operated by Enterprise Products Operating LLC.
Previous wording
ECCC Pipeline. The ECCC Pipeline is under construction and will provide connection from Eddy County, New Mexico to Culberson County, Texas, and approximately 150 MMcfp/d of initial rich gas throughput capacity. The ECCC Pipeline is estimated to be in service during the second quarter of 2026.
Current wording
ECCC Pipeline. The ECCC Pipeline is under construction and will provide a connection from Eddy County, New Mexico, to Culberson County, Texas, and approximately 150 MMcf/d of initial rich gas throughput capacity. The ECCC Pipeline is estimated to be in-service during the third quarter of 2026.
Previous wording
On March 31, 2026, the Partnership executed Amendment No. 2 to its accounts receivable securitization facility, with PNC Bank. Pursuant to this amendment, the facility limit was reduced to $225.0 million, and the scheduled termination date was extended to March 30, 2027. Furthermore, Amendment No. 2 introduced an option permitting Kinetik Receivables to request an increase in commitments of up to $50.0 million in aggregate, subject to the Purchaser’s approval. Amendment No. 2 also removed all sustainability-linked pricing provisions from the A/R Facility, including the sustainability rate adjustment, sustainability fee adjustment and related reporting obligations.
Current wording
On March 31, 2026, the Partnership executed Amendment No. 2 to its Amended A/R Facility, with PNC Bank. Pursuant to this amendment, the facility limit was reduced to $225.0 million, and the scheduled termination date was extended to March 30, 2027. Furthermore, Amendment No. 2 introduced an option permitting Kinetik Receivables LLC to request an increase in commitments of up to $50.0 million in aggregate, subject to the Purchaser’s approval. Amendment No. 2 also removed all sustainability-linked pricing provisions from the A/R Facility, including the sustainability rate adjustment, sustainability fee adjustment and related reporting obligations.
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. Recent geopolitical developments in the Middle East, including the ongoing military conflict involving Iran, the closure of the Strait of Hormuz and related disruptions to global energy markets, each have contributed to heightened volatility in crude oil, natural gas, and NGL pricing and increased uncertainty in global supply chains. While the Company’s midstream assets and operations are primarily located in the Permian Basin and our service revenue is supported by fee‑based contracts, our product sales revenue is exposed to commodity price fluctuations. In addition, sustained volatility in global energy markets could indirectly impact producer activity levels, customer credit profiles, and overall demand for our services. Furthermore, prolonged geopolitical instability may contribute to broader macroeconomic effects, including inflationary pressures, higher interest rates, and constrained capital availability. The Company continues to monitor commodity prices closely and may enter into commodity price hedges 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. Recent geopolitical developments in the Middle East, including the ongoing military conflict involving Iran, disruptions and uncertainty surrounding maritime traffic through the Strait of Hormuz and related impacts on global energy markets, have contributed to heightened volatility in crude oil, natural gas, and NGL pricing and increased uncertainty in global supply chains. While the Company’s midstream assets and operations are primarily located in the Permian Basin and our service revenue is supported by fee‑based contracts, our product sales revenue is exposed to commodity price fluctuations. In addition, sustained volatility in global energy markets could indirectly impact producer activity levels, customer credit profiles, and overall demand for our services. Furthermore, prolonged geopolitical instability may contribute to broader macroeconomic effects, including inflationary pressures, higher interest rates, and constrained capital availability. The Company continues to monitor commodity prices closely and may enter into commodity price hedges 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
The annual rate of inflation in the United States was 3.3% in March 2026 as measured by the Consumer Price Index. In light of the recent economic activity and labor market conditions, the FOMC decided to maintain the target range for the federal funds rate at 3.50% - 3.75% during its meeting in April 2026. During the meeting, the FOMC suggested that the economic activity has been expanding at a solid pace; job gains have remained low, the unemployment rate has changed minimally in the recent months and inflation remains somewhat elevated, in part reflecting the recent increase in global energy prices. The FOMC also noted that uncertainty about the economic outlook remained elevated, including because of the implications of developments in the Middle East. The FOMC remains attentive to the risks to both sides of its dual mandate and seeks to achieve maximum employment and inflation at the rate 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.
Current wording
The annual rate of inflation in the United States was 3.5% in June 2026 as measured by the Consumer Price Index. The FOMC decided to maintain the target range for the federal funds rate at 3.50% - 3.75% during its meeting in July 2026. During the meeting, the FOMC noted the economic activities is expanding at a solid pace; despite elevated uncertainty owing, in part, to the conflict in the Middle East. Productivity growth and capital investment remain strong, job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated relative to the Committee’s 2 percent goal, in part, reflecting supply shocks that have driven price increases in certain sectors, including energy. The FOMC reaffirmed its commitment to deliver price stability and its policy of maintaining ample reserves in the banking system. The Company will continue to monitor the FOMC’s monetary policy and interest rate movements. 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)Cost of sales (excluding depreciation and amortization) is net of gas service fees totaling $102.3 million and $62.2 million for the three months ended March 31, 2026 and 2025, respectively, for certain volumes, where we function as principal.
Current wording
(1)Cost of sales (excluding depreciation and amortization) is net of gas service fees totaling $110.6 million and $73.6 million for the three months ended June 30, 2026 and 2025, respectively, and $212.8 million and$135.8 million for the six months ended June 30, 2026 and 2025, respectively, for certain volumes, where we function as principal.
Previous wording
Service revenue for the three months ended March 31, 2026 decreased by $34.2 million, or 27%, to $93.8 million, compared to $127.9 million for the same period in 2025. The period-over-period gathered and processed gas volumes increased by 105.9 MMcf per day, or 5% and 14.1 MMcf per day, or 1%, respectively. However, the total gathered and processed gas volumes where we function as the agent decreased period-over-period, resulting in a decrease of $33.5 million to gas service fees presented as revenues, or 31%. Over 97% of service revenues are included in the Midstream Logistics segment for the three months ended March 31, 2026.
Current wording
Service revenue for the three months ended June 30, 2026 decreased by $25.8 million, or 23%, to $86.9 million, compared to $112.7 million for the same period in 2025, driven by decreases in period-over-period gathered and processed gas volumes of 101.1 MMcf per day, or 5%, and 1.6 MMcf per day, or 0.1%, respectively. In addition, the total gathered and processed gas volumes where we function as principal increased period-over-period, resulting in higher amounts of fee revenue reported within cost of sales. Over 97% of service revenues are included in the Midstream Logistics segment for the three months ended June 30, 2026.
Previous 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 March 31, 2026, cost of sales decreased by $34.6 million, or 16%, to $188.7 million, compared to $223.4 million for the same period in 2025. The decrease was primarily driven by the aforementioned period-over-period decreases in NGL and natural gas prices, partially offset by an increase in NGL, condensate and natural gas residue volumes sold. Over 99% of costs of sales (excluding depreciation and amortization) are 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, 2026, cost of sales increased by $80.9 million, or 52%, to $237.6 million, compared to $156.7 million for the same period in 2025. The increase was primarily driven by the aforementioned period-over-period increases in NGL, condensate and natural gas residue volumes sold and increases in NGL and condensate prices, partially offset by a decrease in natural gas residue price. Over 99% of costs of sales (excluding depreciation and amortization) are included in the Midstream Logistics segment.
Previous wording
Operating expenses increased by $6.7 million, or 11%, to $70.3 million for the three months ended March 31, 2026, compared to $63.6 million for the same period in 2025. The increase was mainly driven by increases in utility costs of $4.6 million associated with increasing volumes on the system, and higher labor costs of $2.2 million, primarily related to the Kings Landing processing complex going into service during September 2025. Over 99% of operating expenses are included in the Midstream Logistics segment.
Current wording
Operating expenses increased by $3.9 million, or 6%, to $71.9 million for the three months ended June 30, 2026, compared to $68.0 million for the same period in 2025. The increase was mainly driven by increases in utility costs of $4.6 million primarily related to higher electricity rates and the Kings Landing processing complex going into service during September 2025 and higher labor costs of $0.7 million, primarily related to Kings Landing. The increase was partially offset by a decrease in equipment rental cost of $1.8 million. Over 99% of operating expenses are included in the Midstream Logistics segment.
Previous wording
General and administrative expenses increased by $6.6 million, or 18%, to $44.2 million for the three months ended March 31, 2026, compared to $37.6 million for the same period in 2025. The increase was mainly driven by an increase in legal fees of $9.0 million, partially offset by a decrease in labor and professional fees of $2.2 million.
Current wording
General and administrative expenses increased by $8.6 million, or 14%, to $70.5 million for the six months ended June 30, 2026, compared to $61.8 million for the same period in 2025. The increase was mainly driven by an increase in litigation related fees of $12.0 million, partially offset by a decrease in labor and professional fees of $3.1 million.
Previous wording
Depreciation and amortization expense increased by $9.2 million, or 10%, to $101.8 million for the three months ended March 31, 2026, compared to $92.7 million for the same period in 2025. Of the total increase, $6.3 million relates to Durango and Kings Landing being placed into service in September 2025, and the balance is associated with new assets being placed in service over the course of 2025.
Current wording
Depreciation and amortization expense increased by $18.7 million, or 10%, to $205.2 million for the six months ended June 30, 2026, compared to $186.4 million for the same period in 2025. Of the total increase, $12.7 million primarily relates to Kings Landing being placed into service in September 2025, and the balance is associated with new assets being placed in service over the course of 2025 and the first half of 2026.
Previous wording
Equity in earnings of unconsolidated affiliates decreased by $6.3 million, or 11%, to $51.2 million for the three months ended March 31, 2026, compared to $57.5 million for the same period in 2025. The decrease was primarily driven by decreases in equity in earnings from Breviloba of $5.6 million due to normal operations, and EPIC of $3.4 million due to the divestiture of the Company’s equity interest in EPIC in October 2025. The decrease was partially offset by an increase in equity in earnings from PHP of $2.7 million.
Current wording
Equity in earnings of unconsolidated affiliates decreased by $7.6 million, or 7%, to $108.6 million for the six months ended June 30, 2026, compared to $116.2 million for the same period in 2025. The decrease was primarily driven by decreases in equity in earnings from Breviloba of $8.5 million, and EPIC of $7.5 million due to the divestiture of the Company’s related equity interest in October 2025. The decrease was partially offset by an increase in equity in earnings from PHP of $8.4 million.
Previous wording
Adjusted EBITDA is defined as net income or loss including noncontrolling interest adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets, the proportionate EBITDA from our EMI pipelines, equity income 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.
Current wording
Adjusted EBITDA is defined as 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 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 nonrecurring 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
The GAAP measure used by the Company that is most directly comparable to Adjusted EBITDA is net income or loss including noncontrolling interest. Adjusted EBITDA should not be considered as an alternative to the GAAP measure of net income or loss including noncontrolling interest or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect net income including noncontrolling interest. Adjusted EBITDA should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The Company’s definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies in the industry, thereby diminishing its utility.
Current wording
The GAAP measure used by the Company that is most directly comparable to Adjusted EBITDA is net income including noncontrolling interest. Adjusted EBITDA should not be considered as an alternative to the GAAP measure of net income including noncontrolling interest or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect net income including noncontrolling interest. Adjusted EBITDA should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The Company’s definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies in the industry, thereby diminishing its utility.
Previous wording
Company management compensates for the limitations of Adjusted EBITDA as an analytical tool by reviewing the comparable GAAP measure, understanding the differences between Adjusted EBITDA as compared to net income or loss including noncontrolling interest, and incorporating this knowledge into its decision-making processes. Management believes that investors benefit from having access to the same financial measure that the Company uses in evaluating operating results.
Current wording
Company management compensates for the limitations of Adjusted EBITDA as an analytical tool by reviewing the comparable GAAP measure, understanding the differences between Adjusted EBITDA as compared to net income including noncontrolling interest, and incorporating this knowledge into its decision-making processes. Management believes that investors benefit from having access to the same financial measure that the Company uses in evaluating operating results.
Previous wording
The following table presents a reconciliation of the GAAP financial measure of net (loss) income including noncontrolling interest to the non-GAAP financial measure of Adjusted EBITDA.
Current wording
The following table presents a reconciliation of the GAAP financial measure of net income including noncontrolling interest to the non-GAAP financial measure of Adjusted EBITDA.
Previous 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 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 months ended March 31, 2026 and 2025. Also refer to Note 17—Segments in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report 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 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 nonrecurring charges. The following table presents Segment Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025. Also refer to Note 17—Segments in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for a reconciliation of Segment Adjusted EBITDA to net income before income taxes.
Previous wording
Midstream Logistics Segment Adjusted EBITDA increased by $18.7 million, or 12%, to $178.9 million for the three months ended March 31, 2026, compared to $160.2 million for the same period in 2025. The change reflected lower cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses totaling $26.0 million, partially offset by a lower operating revenues of $33.2 million, which was primarily driven by an increase in unrealized loss on commodity hedging activities of $28.9 million, which is EBITDA neutral. 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
Midstream Logistics Segment Adjusted EBITDA increased by $53.6 million, or 35%, to $204.8 million for the three months ended June 30, 2026, compared to $151.2 million for the same period in 2025. The change was primarily driven by higher operating revenues of $155.0 million, partially offset by lower cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $85.8 million, and an increase in unrealized gain on commodity hedging activities of $11.9 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
Pipeline Transportation Segment Adjusted EBITDA decreased by $15.9 million, or 17%, to $78.0 million for the three months ended March 31, 2026, compared to $93.9 million for the same period in 2025. The decrease was mainly due to lower proportionate EMI EBITDA of $17.5 million, primarily related to the divestiture of the Company’s equity interest in EPIC during October 2025.
Current wording
Pipeline Transportation Segment Adjusted EBITDA decreased by $13.8 million, or 14%, to $83.0 million for the three months ended June 30, 2026, compared to $96.8 million for the same period in 2025. The decrease was mainly due to lower proportionate EMI EBITDA of $13.2 million, primarily related to the divestiture of the Company’s equity interest in EPIC during October 2025.
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 acquisition of businesses and EMI pipelines and associated subsequent construction costs. For 2026, the Company’s primary spending requirements are related to budgeted capital expenditures for the construction and maintenance of gathering and processing assets, the Company’s contractual debt obligations, quarterly cash dividends and repurchases of its Class A Common Stock pursuant to the 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 acquisition of businesses and EMI pipelines and associated subsequent construction costs. For 2026, the Company’s primary spending requirements are related to budgeted capital expenditures for the construction and maintenance of gathering and processing assets, the Company’s contractual debt obligations, and quarterly cash dividends.
Previous wording
During the three months ended March 31, 2026, the Company’s primary sources of cash were distributions from the EMI pipelines, borrowings under the revolving credit facility and Amended A/R Facility, and cash generated from operations. Based on the Company’s current financial plan, the Company believes that cash from operations, 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:
Current wording
During the six months ended June 30, 2026, the Company’s primary sources of cash were distributions from the EMI pipelines, borrowings under the revolving credit facility and Amended A/R Facility, and cash generated from operations. Based on the Company’s current financial plan, the Company believes that cash from operations, 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
All borrowings under the Revolving Credit Agreement mature on May 30, 2030, unless such maturity date is adjusted in accordance with the Revolving Credit Agreement. As of March 31, 2026, we had an outstanding borrowing of $468.0 million and remaining borrowing capacity of $1.12 billion.
Current wording
All borrowings under the Revolving Credit Agreement mature on May 30, 2030, unless such maturity date is adjusted in accordance with the Revolving Credit Agreement. As of June 30, 2026, we had an outstanding borrowing of $523.0 million and remaining borrowing capacity of $1.06 billion.
Previous wording
On March 31, 2026, the Partnership executed Amendment No. 2 to its Amended A/R Facility, with PNC Bank. Pursuant to this amendment, the facility limit was reduced to $225.0 million, and the scheduled termination date was extended to March 30, 2027. Furthermore, Amendment No. 2 introduced an option permitting Kinetik Receivables to request an increase in commitments of up to $50.0 million in aggregate, subject to the Purchaser’s approval. Amendment No. 2 also removed all sustainability-linked pricing provisions previously applicable under the A/R Facility. As of March 31, 2026, eligible accounts receivable of $187.1 million were pledged to the Amended A/R Facility as collateral and $37.9 million was available to be invested by the purchasers.
Current wording
On March 31, 2026, the Partnership executed Amendment No. 2 to its Amended A/R Facility, with PNC Bank. Pursuant to this amendment, the facility limit was reduced to $225.0 million, and the scheduled termination date was extended to March 30, 2027. Furthermore, Amendment No. 2 introduced an option permitting Kinetik Receivables LLC to request an increase in commitments of up to $50.0 million in aggregate, subject to the Purchaser’s approval. Amendment No. 2 also removed all sustainability-linked pricing provisions previously applicable under the A/R Facility. As of June 30, 2026, eligible accounts receivable of $225.0 million were pledged to the Amended A/R Facility as collateral.
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, 2026 and 2025, capital spending mainly consisted of spending on property, plant and equipment totaling $83.0 million and $74.5 million, respectively, and intangible asset purchases totaling $6.1 million and $6.9 million, respectively. 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 require investments to expand, upgrade, maintain or enhance existing operations and to meet environmental and operational regulations. During the six months ended June 30, 2026 and 2025, capital spending mainly consisted of spending on property, plant and equipment totaling $192.3 million and $201.8 million, respectively, and intangible asset purchases totaling $12.1 million and $15.6 million, respectively.
Previous wording
Operating activities. Net cash provided by operating activities increased by $3.6 million for the three months ended March 31, 2026 to $180.4 million, compared to $176.8 million for the same period in 2025. The change in the operating cash flows reflected (i) a decrease in net income including noncontrolling interest of $24.4 million; (ii) an increase in adjustments related to non-cash items of $43.7 million, which was mainly driven by an increase in non-cash derivative fair value adjustments and lower derivative cash settlements, together totaling $26.2 million, an increase in depreciation and amortization expense of $9.2 million, and a decrease in equity in earnings of unconsolidated affiliates of $6.3 million; and (iii) a decrease in working capital of $15.7 million.
Current wording
Operating activities. Net cash provided by operating activities increased by $35.6 million for the six months ended June 30, 2026 to $341.5 million, compared to $305.9 million for the same period in 2025. The change in the operating cash flows reflected (i) an increase in net income including noncontrolling interest of $24.3 million; (ii) an increase in adjustments related to non-cash items of $45.8 million, which was mainly driven by an increase in non-cash derivative fair value adjustments and lower derivative cash settlements, together totaling $12.6 million, an increase in depreciation and amortization expense of $18.7 million, and a decrease in equity in earnings of unconsolidated affiliates of $7.6 million; and (iii) a decrease in working capital of $34.5 million.
Previous wording
Investing activities. Net cash used in investing activities decreased by $171.0 million for the three months ended March 31, 2026 to $89.1 million, compared to $260.1 million used in the same period in 2025. The decrease was primarily driven by a decrease in cash used in business acquisitions of $178.4 million related to the Barilla Draw Acquisition completed in January 2025. The decrease was partially offset by higher capital spending for property, plant and equipment of $8.5 million.
Current wording
Investing activities. Net cash used in investing activities decreased by $187.4 million for the six months ended June 30, 2026 to $204.2 million, compared to $391.6 million used in the same period in 2025. The decrease was primarily driven by a decrease in cash used in business acquisitions of $176.2 million related to the Barilla Draw Acquisition completed in January 2025 and decreases in property, plant and equipment and intangible asset expenditures of $9.6 million and $3.5 million, respectively.
Previous wording
Financing activities. Net cash used in financing activities was $94.5 million for the three months ended March 31, 2026, which was primarily comprised of net proceeds from revolving credit facility and Amended A/R Facility of $36.8 million, fully offset by cash dividends of $131.3 million paid to the holders of Class A Common Stock and Common Units, compared with net cash provided by financing activities of $88.5 million for the three months ended March 31, 2025, which was primarily comprised of net proceeds from the Company’s long-term debt, revolving credit facility and Amended 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.
Current wording
Financing activities. Net cash used in financing activities was $133.4 million for the six months ended June 30, 2026, which was comprised of net proceeds from the revolving credit facility and Amended A/R Facility of $129.6 million, fully offset by cash dividends of $263.1 million paid to the holders of Class A Common Stock and Common Units, compared with net cash provided by financing activities of $92.8 million for the six months ended June 30, 2025, which was comprised of net proceeds from the Company’s long-term debt, revolving credit facility and Amended A/R Facility of $412.2 million, fully offset by cash dividends of $246.8 million paid to the holders of Class A Common Stock and Common Units and cash paid to repurchase Class A Common Stock of $72.6 million.
Previous wording
During the three months ended March 31, 2026, the Company made cash dividend payments of $131.3 million to holders of Class A Common Stock and Common Units and $0.5 million was reinvested in shares of Class A Common Stock by holders of Class A Common Stock and Common Units.
Current wording
During the six months ended June 30, 2026, the Company made cash dividend payments of $263.1 million to holders of Class A Common Stock and Common Units, and $1.1 million was reinvested in shares of Class A Common Stock by Class A Common Stock and Common Units holders.
Previous wording
On April 16, 2026, the Board declared a cash dividend of $0.81 per share on the Company’s Class A Common Stock which was paid on May 1, 2026. The Company, through its ownership of the general partner of the Partnership, declared a distribution of $0.81 per Common Unit from the Partnership to the holders of Common Units, which was paid on May 1, 2026. As described in these Condensed Consolidated Financial Statements, as the context requires, dividends paid to holders of Class A Common Stock and distributions paid to holders of Common Units may be referred to collectively as “dividends.”
Current wording
On July 14, 2026, the Board declared a cash dividend of $0.81 per share on the Company’s Class A Common Stock, which was paid to stockholders on July 31, 2026. The Company, through its ownership of the general partner of the Partnership, declared a distribution of $0.81 per Common Unit from the Partnership to the holders of Common Units, which was paid on July 31, 2026. As described in these Condensed Consolidated Financial Statements, as the context requires, dividends paid to holders of Class A Common Stock and distributions paid to holders of Common Units may be referred to collectively as “dividends.”
Previous wording
In February 2023, the Board approved the Repurchase Program, authorizing discretionary purchases of the Company’s Class A Common Stock up to $100.0 million in aggregate. In May 2025, the Board approved a $400.0 million increase to the previously announced Repurchase Program, pursuant to which we are authorized to repurchase the Company’s Class A Common Stock for an aggregate purchase price of up to $500.0 million. Repurchases may be made at management’s discretion from time to time, in accordance with applicable securities laws, on the open market or through privately negotiated transactions and may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act. Privately negotiated repurchases from affiliates are also authorized under the Repurchase Program, subject to such affiliates’ interest and other limitations. The repurchases will depend on market conditions and may be discontinued at any time without prior notice.
Current wording
In February 2023, the Board approved the Repurchase Program, authorizing discretionary purchases of the Company’s Class A Common Stock up to $100.0 million in aggregate. In May 2025, the Board approved a $400.0 million increase to the previously announced Repurchase Program. Repurchases may be made at management’s discretion from time to time and will depend on market conditions and may be discontinued at any time without prior notice.
Previous wording
During the three months ended March 31, 2026, the Company did not repurchase any of its Class A Common Stock under the Repurchase Program.
Current wording
During the six months ended June 30, 2026, the Company did not repurchase any of its Class A Common Stock under the Repurchase Program.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Depreciation and amortization expense increased by $9.6 million, or 10%, to $103.3 million for the three months ended June 30, 2026, compared to $93.8 million for the same period in 2025. Of the total increase, $6.4 million primarily related to Kings Landing being placed into service in September 2025, and the balance was associated with new assets being placed in service over the course of 2025 and the first half of 2026.
Current report — wording carried from elsewhere
Costs of sales (excluding depreciation and amortization)
Current report — wording carried from elsewhere
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 six months ended June 30, 2026, cost of sales increased by $46.3 million, or 12%, to $426.3 million, compared to $380.1 million for the same period in 2025. The increase was primarily driven by the aforementioned period-over-period increases in NGL, condensate and natural gas residue volumes sold and an increase in condensate prices, partially offset by decreases in NGL and natural gas residue prices. Over 99% of costs of sales (excluding depreciation and amortization) are included in the Midstream Logistics segment.