HOUSTON & MIDLAND, Texas--(BUSINESS WIRE)--February 25, 2026--
Kinetik Holdings Inc. (NYSE: KNTK) ("Kinetik" or the "Company") today reported financial results for the quarter ended December 31, 2025.
Kinetik reported net income including noncontrolling interest of $416.7 million and $525.9 million for the three and twelve months ended December 31, 2025, respectively. Kinetik generated Adjusted EBITDA(1) of $252.1 million and $987.7 million, Distributable Cash Flow(1) of $151.7 million and $620.5 million, and Free Cash Flow(1) of $(12.0) million and $167.2 million for the three and twelve months ended December 31, 2025, respectively.
Highlights
-- Generated record full year Adjusted EBITDA1 of $987.7 million, despite
a challenging operating environment and the sale of the Company's equity
interest in EPIC Crude Holdings, LP ("EPIC Crude")
-- Amended gas gathering and processing ("G&P") agreements with the two
largest customers from the legacy Durango Midstream business in New
Mexico that extend the terms into the mid-2030s and increase Adjusted
EBITDA1 beginning in 2026 with fixed-fee structures, the addition of
treating fees, and control of residue gas and natural gas liquids
-- Reached final investment decision ("FID") on the behind-the-meter,
gas-fired 40 MW power generation project at the Diamond Cryo facility
("Diamond Cryo") in Texas
-- Issuing full year 2026 Financial Guidance ("2026 Guidance"):
-- Adjusted EBITDA1 guidance of $950 million to $1,050 million, a
7% increase year-over-year at the midpoint2
-- Capital Expenditures3 guidance of $450 million to $510 million
(including maintenance)
-- Updated the Company's Capital Allocation framework to prioritize
growth-oriented, scale-driven reinvestment while preserving balance sheet
flexibility
CEO Commentary
"2025 was a year of challenges and strategic progress for Kinetik as we navigated a difficult operating environment," said Jamie Welch, Kinetik's President & Chief Executive Officer.
"Throughout the year, we advanced several core initiatives, including the commercial in-service of the Kings Landing Processing Complex ("Kings Landing"), the ongoing construction of the ECCC Pipeline, the divestiture of our equity interest in EPIC Crude, and continued commercial progress with our significant customer base -- further strengthening the long--term foundation of our business. Despite industry-wide macroeconomic uncertainty, commodity price pressure, and rising operating costs, our extensive asset footprint and strong customer relationships continued to support resilient financial performance."
"Looking ahead, the capital investments we executed in 2025 provide a solid foundation for Kinetik to build upon in 2026 and beyond. The fourth quarter results were a positive validation of the steps taken to mitigate the impact of wider production shut-ins due to weak Waha gas pricing and showed the capability and resilience of our Delaware Basin system, even with volumes down over 8% versus our expectations. While we expect continued volatility for much of 2026, we anticipate tailwinds from substantial operating leverage across our system and improving natural gas fundamentals for Waha Hub gas prices as approximately 5 Bcf/d of new Permian natural gas takeaway capacity is placed in-service by the end of the first quarter of 2027 -- nearly 20% of current Permian natural gas production volumes."
"Beyond 2026, we can see an even more compelling outlook as the full year benefits of several of our natural gas liquids contract expirations, system-wide volume growth, enhanced sour gas treating capabilities, cost optimization initiatives, and improving basis differentials are expected to drive material earnings growth. We remain focused on disciplined capital allocation, operational reliability, and positioning Kinetik to deliver sustained, long-term value creation for our shareholders."
Financial Highlights
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- ------------------------
2025 2025
---- --------------- --- --- ---------------
(In thousands, except ratios)
Net income including
noncontrolling
interest $ 416,701 $ 525,928
Adjusted EBITDA(1) $ 252,095 $ 987,704
Midstream
Logistics
Adjusted
EBITDA(1) $ 173,082 $ 635,845
Pipeline
Transportation
Adjusted
EBITDA(1) $ 84,030 $ 370,134
Corporate and
Other Adjusted
EBITDA(1) $ (5,017) $ (18,275)
Distributable Cash
Flow(1) $ 151,708 $ 620,505
Dividend Coverage
Ratio(1,4) 1.2x 1.2x
Capital
Expenditures(3) $ 138,889 $ 497,118
Free Cash Flow(1) $ (12,016) $ 167,167
Net Debt(1,5) $ 3,814,249
Leverage Ratio(1,6) 3.8x
Net Debt to
Adjusted EBITDA
Ratio(1,7) 3.9x
Common stock issued
and outstanding(8) 161,639
Other Financial Updates
In the fourth quarter, the Midstream Logistics segment generated Adjusted EBITDA(1) of $173.1 million, a 15% increase year-over-year. For the three months ended December 31, 2025, Kinetik processed natural gas volumes of 1.79 Bcf/d, a 3% increase year-over-year. Fourth quarter 2025 results primarily benefited from Gulf Coast marketing gains, partially offset by Waha price-related production shut-ins.
The Pipeline Transportation segment generated Adjusted EBITDA(1) of $84.0 million, a 9% decrease year-over-year driven by the divestiture of the Company's equity interest in EPIC Crude on October 31, 2025.
Distributable Cash Flow(1) and Free Cash Flow(1) in the fourth quarter were lower as distributions received from Permian Highway Pipeline ("PHP") were down $31.3 million from the third quarter due in large part to a minor timing change in distribution policy resulting in the fourth quarter distribution being paid at the beginning of January 2026. The timing change in the PHP distribution policy has no other impact or consequence.
The Company repurchased $176.0 million(9) of Class A common stock in 2025 under the existing Repurchase Program, of which $3.5 million was repurchased during the fourth quarter of 2025.
2026 Outlook & Guidance
Kinetik estimates full year 2026 Adjusted EBITDA(1) to be between $950 million and $1,050 million. The midpoint of guidance assumes:
-- High single-digit percentage growth year-over-year in gas processed
volumes across the system, after accounting for expected Waha
price-related production shut-ins;
-- ECCC Pipeline in-service during the second quarter of 2026;
-- Kings Landing acid gas injection ("AGI") and sour conversion project
in-service by year-end 2026; and
-- 2026 average annual commodity prices10 of $61.58 per barrel for WTI,
$3.34 per Mmbtu for Houston Ship Channel natural gas, $0.44 per Mmbtu for
Waha Hub natural gas, and $0.52 per gallon for composite natural gas
liquids.
Key factors that could drive meaningful variability within the Adjusted EBITDA(1) guidance range include (i) significant changes in commodity prices, (ii) elevated or fewer price-related production shut-ins, (iii) producer development delays or accelerations resulting from commodity price conditions, and (iv) changes in the completion timing of certain strategic projects.
Kinetik estimates 2026 Capital Expenditures(3) (including maintenance) to be between $450 million and $510 million. Guidance assumes:
-- Approximately 70% of Capital Expenditures3 is to be spent in New Mexico,
which reflects the Company's rich opportunity set;
-- The in-service of the ECCC Pipeline, the Kings Landing AGI and sour
conversion project, and expansion of its low- and high-pressure gathering
system in Eddy and Lea Counties; and
-- Optimization projects in Texas that increase processing capacity across
several Delaware South complexes, as well as construction of the
behind-the-meter gas-fired power generation project at Diamond Cryo.
Capital Allocation Framework
Kinetik is committed to a growth-oriented, scale-driven capital allocation framework that prioritizes long-term value creation while maintaining financial resilience across market cycles. The Company intends to operate within a targeted Leverage Ratio(1,6) range of 3.5x to 4.0x, while preserving ample liquidity to enable disciplined, value-accretive capital deployment.
Capital allocation decisions and incremental capital returns will be evaluated across three primary levers including organic growth, dividend increases, and share repurchases:
-- Organic growth: Prioritize projects with mid-teens or stronger
unlevered returns that expand system scale and position the Company for
attractive near- and long-term growth
-- Dividend increases: Target 3% to 5% annual increases until Dividend
Coverage1,4 of 1.6x or higher is achieved, at which time the annual
dividend is expected to grow in-line with earnings growth
-- Share repurchases: Opportunistic and highly accretive to per-share
metrics and central to longer term incremental returns
Each lever will compete for capital based on its ability to deliver meaningful, sustainable shareholder value.
Strategic Projects & Commercial Update
Kinetik continues to make significant progress across the Delaware North footprint, highlighted by the successful completion of contract amendments with two of its largest customers. Collectively, the amended contracts increase Adjusted EBITDA(1) beginning in 2026, enhance cash flow visibility, strengthen long--term customer alignment, and position the Company to grow alongside these producers over the next decade as development increasingly shifts toward more sour gas benches.
Following the recent FID, Kinetik is progressing construction of the AGI and sour conversion project at Kings Landing. The project will enable the Company to handle elevated levels of H S and CO across all three Delaware North processing complexes. The Company continues to work closely with the Bureau of Land Management and the New Mexico Oil Conservation Division to expedite any remaining permitting requirements. The project remains on schedule with in--service anticipated by year-end 2026.
Construction continues to progress on the ECCC Pipeline, which will connect the western portion of Kinetik's system North to South between Eddy and Culberson counties. The project remains on track for in-service during the second quarter of 2026.
In Delaware South, the Company advanced its wholly-owned behind-the-meter power generation project at Diamond Cryo with the purchase of a 40 MW gas turbine. Regulatory and engineering site work is underway, and the project requires less than $25 million in total capital and is targeted for in-service in late 2026. This solution is scalable and can be replicated across additional processing facilities within Kinetik's footprint.
In February 2026, Kinetik began a pilot engagement with Palantir to evaluate opportunities to enhance decision-making support, integrate real--time profitability analytics, and improve planning across the Company's Delaware Basin footprint. This work supports a broader strategy to leverage data and technology to drive efficiency, reliability, and value creation.
Conference Call & Webcast
Kinetik will host its fourth quarter 2025 results conference call on February 26, 2026 at 8:00 am Central Time (9:00 am Eastern Time). To access a live webcast of the conference call, please visit the Investors section of Kinetik's website at www.ir.kinetik.com. A replay of the conference call will be available on the website following the call.
Investor Presentation
An updated investor presentation will be available under Events and Presentations in the Investors section of the Company's website at www.ir.kinetik.com.
About Kinetik Holdings Inc.
Kinetik is a fully integrated, pure-play, Permian-to-Gulf Coast midstream C-corporation operating in the Delaware Basin. Kinetik is headquartered in Houston and Midland, Texas. Kinetik provides comprehensive gathering, transportation, compression, processing and treating services for companies that produce natural gas, natural gas liquids, crude oil and water. Kinetik posts announcements, operational updates, investor information and press releases on its website, www.kinetik.com.
Forward-looking statements
This news release includes certain statements that may constitute "forward-looking statements" for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts, outlooks, guidance or other characterizations of future events or circumstances, including any underlying assumptions. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "seeks, " "possible," "potential," "predict," "project," "prospects," "guidance, " "outlook," "should," "would," "will," and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements about the Company's future business strategy and plans, expectations, and objectives for the Company's operations, including statements about strategy, synergies, sustainability goals and initiatives, technology adoption, portfolio monetization opportunities, growth, expansion, cost reduction and other capital projects and the timing and cost thereof, future operations, and financial guidance, growth opportunities, the amount and timing of future shareholder returns, the Company's projected dividend amounts and the timing thereof, and the Company's targeted leverage and financial profile. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 to be filed with the SEC. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement whether as a result of new information, future development, or otherwise, except as may be required by law.
Additional information
Additional information follows, including a reconciliation of Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, and Net Debt (non-GAAP financial measures) to the GAAP measures.
Non-GAAP financial measures
Kinetik's financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP financial information. It is management's intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, Dividend Coverage Ratio, Net Debt and Leverage Ratio are non-GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated. See "Reconciliation of GAAP to Non-GAAP Measures" elsewhere in this news release. This news release also includes certain forward-looking non-GAAP financial information. Reconciliations of these forward-looking non-GAAP measures to their most directly comparable GAAP measure are not available without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various reconciling items that would impact the most directly comparable forward-looking GAAP financial measure, that have not yet occurred, are out of Kinetik's control and/or cannot be reasonably predicted. Accordingly, such reconciliation is excluded from this new release. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
1. A non-GAAP financial measure. See "Non-GAAP Financial Measures" and
"Reconciliation of GAAP to Non-GAAP Measures" for further details.
2. 2025 Adjusted EBITDA, excluding actual Adjusted EBITDA contributions
from EPIC Crude.
3. Net of contributions in aid of construction and returns of invested
capital from unconsolidated affiliates.
4. Dividend Coverage Ratio is Distributable Cash Flow divided by total
declared dividends.
5. Net Debt is defined as total current and long-term debt, excluding
deferred financing costs, less cash and cash equivalents.
6. Leverage Ratio is total debt less cash and cash equivalents divided by
last twelve months Adjusted EBITDA, calculated per the Company's credit
agreement. The calculation includes EBITDA Adjustments for Qualified
Projects, Acquisitions and Divestitures.
7. Net Debt to Adjusted EBITDA Ratio is defined as Net Debt divided by
last twelve months Adjusted EBITDA.
8. 161.6 million shares, issued and outstanding shares as of December 31,
2025, is the sum of 64.1 million shares of Class A common stock and 97.6
million shares of Class C common stock.
9. Aggregate Dollar value of Kinetik Class A common stock repurchased as
of December 31, 2025.
10. Market forward pricing as of February 13, 2026.
KINETIK HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------------
2025 2024 2025 2024
------- ------- --------- ---------
(In thousands, except per share data)
Operating revenues:
Service revenue $101,578 $106,290 $ 445,496 $ 408,000
Product revenue 325,525 275,894 1,307,228 1,062,986
Other revenue 3,316 3,532 11,665 11,943
------- ------- --------- ---------
Total operating revenues 430,419 385,716 1,764,389 1,482,929
Operating costs and
expenses:
Costs of sales (excluding
depreciation and
amortization)(1) 170,496 175,832 785,948 620,618
Operating expenses 63,617 52,692 271,402 195,970
Ad valorem taxes 8,402 6,314 28,851 24,714
General and
administrative expenses 38,684 39,311 130,616 134,157
Depreciation and
amortization expenses 100,800 87,947 382,645 324,197
Loss (gain) on disposal
of assets, net 23 (50) 8 4,040
------- ------- --------- ---------
Total operating costs and
expenses 382,022 362,046 1,599,470 1,303,696
------- ------- --------- ---------
Operating income 48,397 23,670 164,919 179,233
Other income (expense):
Interest and other income 163 530 3,983 2,802
Loss on debt
extinguishment -- (35) (635) (525)
Gain on sale of equity
method investment 415,409 -- 415,409 89,802
Interest expense (59,422) (49,690) (233,371) (217,235)
Equity in earnings of
unconsolidated
affiliates 51,879 43,523 226,351 213,191
------- ------- --------- ---------
Total other income (expense),
net 408,029 (5,672) 411,737 88,035
Income before income
taxes 456,426 17,998 576,656 267,268
Income tax expense 39,725 1,774 50,728 23,035
------- ------- --------- ---------
Net income including
noncontrolling interest 416,701 16,224 525,928 244,233
Net income attributable
to Common Unit limited
partners 273,481 10,715 347,668 164,219
------- ------- --------- ---------
Net income attributable to
holders of Class A Common
Stock $143,220 $ 5,509 $ 178,260 $ 80,014
======= ======= ========= =========
Net income attributable to
holders of Class A Common
Stock
Basic $ 2.18 $ 0.01 $ 2.66 $ 1.03
Diluted $ 2.16 $ 0.01 $ 2.63 $ 1.02
Weighted-average shares
Basic 64,057 59,783 61,962 59,284
Diluted 64,613 60,551 62,665 60,115
(1) Cost of sales (excluding depreciation and amortization) is net of gas
service revenues totaling $91.5 million and $60.4 million for the three
months ended December 31, 2025 and 2024, respectively, and $315.6
million and $219.7 million for the years ended December 31, 2025 and
2024, respectively, for certain volumes, where we act as principal.
KINETIK HOLDINGS INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
Three Months Ended For The Year Ended
December 31, December 31,
--------------------- ------------------------
2025 2024 2025 2024
-------- ------- -------- --------
(In thousands)
Net Income Including
Noncontrolling Interests to
Adjusted EBITDA
Net income including
noncontrolling interest
(GAAP) $ 416,701 $ 16,224 $ 525,928 $ 244,233
Add back:
Interest expense 59,422 49,690 233,371 217,235
Income tax expense 39,725 1,774 50,728 23,035
Depreciation and
amortization expenses 100,800 87,947 382,645 324,197
Amortization of contract
costs 1,740 1,656 6,794 6,621
Proportionate EMI EBITDA 76,103 84,113 339,448 346,666
Share-based compensation 18,040 23,669 62,617 76,536
Loss (gain) on disposal
of assets, net 23 (50) 8 4,040
Loss on debt
extinguishment -- 35 635 525
Commodity hedging
unrealized (gain) loss (5,740) 12,722 (18,871) 10,788
Contingent liabilities
fair value adjustment (510) (1,200) 5,190 200
Integration costs 2,337 735 14,958 5,826
Acquisition/divestiture
transaction costs (562) 558 275 4,096
Litigation costs 10,566 2,666 19,708 $ 6,074
Other one-time costs or
amortization 974 988 7,540 6,027
Deduct:
Other interest income 236 530 1,510 1,988
Gain (loss) on sale of
equity method
investment 415,409 -- 415,409 89,802
Equity income from
unconsolidated
affiliates 51,879 43,523 226,351 213,191
-------- ------- -------- --------
Adjusted EBITDA(1) (non-GAAP) $ 252,095 $237,474 $ 987,704 $ 971,118
======== ======= ======== ========
Distributable Cash Flow(2)
Adjusted EBITDA (non-GAAP) $ 252,095 $237,474 $ 987,704 $ 971,118
Proportionate EBITDA from
unconsolidated affiliates (76,103) (84,113) (339,448) (346,666)
Returns on invested capital
from unconsolidated
affiliates 40,798 66,322 246,002 289,992
Interest expense (59,422) (49,690) (233,371) (217,235)
Unrealized loss (gain) on
interest rate swaps 61 (3,102) (571) (333)
Maintenance capital
expenditures (5,721) (11,451) (39,811) (39,862)
-------- ------- -------- --------
Distributable cash flow
(non-GAAP) $ 151,708 $155,440 $ 620,505 $ 657,014
======== ======= ======== ========
Free Cash Flow(3)
Distributable cash flow
(non-GAAP) $ 151,708 $155,440 $ 620,505 $ 657,014
Cash interest adjustment (28,552) (25,042) 17,875 (27,036)
Realized gain on interest
rate swaps 202 1,251 608 13,149
Growth capital expenditures (132,511) (97,437) (475,346) (227,690)
Capitalized interest (2,206) (3,436) (14,514) (8,321)
Investments in unconsolidated
affiliates -- -- (1,206) (3,273)
Returns of invested capital
from unconsolidated
affiliates -- 1,270 2,853 4,059
Contributions in aid of
construction (657) 433 16,392 2,231
-------- ------- -------- --------
Free cash flow (non-GAAP) $ (12,016) $ 32,479 $ 167,167 $ 410,133
======== ======= ======== ========
KINETIK HOLDINGS INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)
For The Year Ended December 31,
---------------------------------------
2025 2024
------------- ------------
(In thousands)
Reconciliation of net cash
provided by operating
activities to Adjusted EBITDA
Net cash provided by operating
activities $ 604,120 $ 637,346
Net changes in operating assets
and liabilities 23,026 43,401
Interest expense 233,371 217,235
Amortization of deferred
financing costs (7,869) (7,438)
Current income tax expense 68 3,532
Returns on invested capital
from unconsolidated
affiliates (246,002) (289,992)
Proportionate EBITDA from
unconsolidated affiliates 339,448 346,666
Derivative fair value
adjustment and settlement 19,442 (10,455)
Commodity hedging unrealized
(gain) loss (18,871) 10,788
Interest income (1,510) (1,988)
Integration costs 14,958 5,826
Acquisition/divestiture
transaction costs 275 4,096
Litigation costs 19,708 6,074
Other one-time cost or
amortization 7,540 6,027
------------- ------------
Adjusted EBITDA(1) (non-GAAP) $ 987,704 $ 971,118
============= ============
December
31, September 30, June 30, March 31,
2025 2025 2025 2025
---------- ------------- ---------- ----------
(In thousands)
Net Debt(4)
Short-term
debt $ 165,200 $ 178,600 $ 189,300 $ 148,800
Long-term
debt, net 3,627,720 3,956,330 3,736,972 3,568,457
Plus: Debt
issuance
costs, net 25,280 26,670 28,028 26,543
--------- --------- --------- ---------
Total debt 3,818,200 4,161,600 3,954,300 3,743,800
Less: Cash
and cash
equivalents 3,951 7,737 10,733 8,845
--------- --------- --------- ---------
Net debt
(non-GAAP) $3,814,249 $ 4,153,863 $3,943,567 $3,734,955
========= ========= ========= =========
(1) 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, share-based compensation expense, noncash
increases and decreases related to commodity hedging activities,
integration and transaction costs, litigation costs and
extraordinary losses and unusual or non-recurring charges.
Adjusted EBITDA provides a basis for comparison of our business
operations between current, past and future periods by excluding
items that we do not believe are indicative of our core
operating performance. Adjusted EBITDA should not be considered
as an alternative to the GAAP measure of net income including
non-controlling interest or any other measure of financial
performance presented in accordance with GAAP.
(2) Distributable Cash Flow is defined as Adjusted EBITDA,
adjusted for the proportionate EBITDA from unconsolidated
affiliates, returns on invested capital from unconsolidated
affiliates, interest expense, net of amounts capitalized,
unrealized gains or losses on interest rate swaps and
maintenance capital expenditures. Distributable Cash Flow should
not be considered as an alternative to the GAAP measure of net
income including non-controlling interest or any other measure
of financial performance presented in accordance with GAAP. We
believe that Distributable Cash Flow is a useful measure to
compare cash generation performance from period to period and to
compare the cash generation performance for specific periods to
the amount of cash dividends we make.
(3) Free Cash Flow is defined as Distributable Cash Flow
adjusted for growth capital expenditures, investments in
unconsolidated affiliates, returns of invested capital from
unconsolidated affiliates, cash interest, capitalized interest,
realized gains or losses on interest rate swaps and
contributions in aid of construction. Free Cash flow should not
be considered as an alternative to the GAAP measure of net
income including non-controlling interest or any other measure
of financial performance presented in accordance with GAAP. We
believe that Free Cash Flow is a useful performance measure to
compare cash generation performance from period to period and to
compare the cash generation performance for specific periods to
the amount of cash dividends that we make.
(4) Net Debt is defined as total short-term and long-term debt,
excluding deferred financing costs, premiums and discounts, less
cash and cash equivalents. Net Debt illustrates our total debt
position less cash on hand that could be utilized to pay down
debt at the balance sheet date. Net Debt should not be
considered as an alternative to the GAAP measure of total
long-term debt, or any other measure of financial performance
presented in accordance with GAAP.
KINETIK HOLDINGS INC.
RESULTS OF OPERATIONS BY SEGMENT
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 three
and twelve months ended December 31, 2025 and 2024:
Corporate
Midstream Pipeline and
Logistics Transportation Other(1) Elimination Consolidated
---------- ------------------ --------- --------------- ----------------
For the Quarter Ended
December 31, 2025 (In thousands)
Revenue $ 424,712 $ 2,391 $ -- $ -- $ 427,103
Other revenue 3,314 2 -- 3,316
Intersegment revenue(2) -- 6,941 -- (6,941) --
-------- -------- ---- ------- ------- ---------
Total segment
operating revenue 428,026 9,334 -- (6,941) 430,419
Costs of sales (excluding
depreciation and
amortization expenses) (169,990) (506) -- (170,496)
Intersegment costs of
sales (6,941) 6,941 --
Operating expenses(3) (71,338) (681) -- (72,019)
General and
administrative expenses (5,148) (220) (33,316) (38,684)
Proportionate EMI EBITDA -- 76,103 -- 76,103
Other segment items(4) (1,527) -- 28,299 -- 26,772
-------- -------- ---- ------- ------- ---------
Segment Adjusted
EBITDA(5) $ 173,082 $ 84,030 $ (5,017) $ -- $ 252,095
======== ======== ==== ======= ======= =========
Reconciliation of
Segment Adjusted EBITDA
to income before income
taxes
Segment Adjusted
EBITDA(5) $ 173,082 $ 84,030 $ (5,017) $ -- $ 252,095
Add back:
Other interest income -- -- 236 -- 236
Gain on sale of
equity method
investment -- 415,409 -- -- 415,409
Commodity hedging
unrealized gain 5,740 -- -- -- 5,740
Equity income from
unconsolidated
affiliates -- 51,879 -- -- 51,879
Deduct: --
Interest expense 42 -- 59,380 -- 59,422
Depreciation and
amortization
expenses 98,484 2,310 6 -- 100,800
Contract assets
amortization 1,740 -- -- -- 1,740
Proportionate EMI
EBITDA -- 76,103 -- -- 76,103
Share-based
compensation -- -- 18,040 -- 18,040
Loss on disposal of
assets, net 23 -- -- -- 23
Contingent
liabilities fair
value adjustment (510) -- -- -- (510)
Integration costs 2,170 -- 167 -- 2,337
Acquisition /
divestiture
transaction costs -- -- (562) -- (562)
Litigation costs -- -- 10,566 -- 10,566
Other one-time costs
or amortization 886 -- 88 -- 974
-------- -------- ---- ------- ------- ---------
Income (loss) before
income taxes $ 75,987 $ 472,905 $(92,466) $ -- $ 456,426
======== ======== ==== ======= ======= =========
Corporate
Midstream Pipeline and
Logistics Transportation Other(1) Elimination Consolidated
---------- ------------------ --------- --------------- ----------------
For the Quarter Ended
December 31, 2024 (In thousands)
Revenue $ 379,662 $ 2,522 $ -- $ -- $ 382,184
Other revenue 3,530 2 -- 3,532
Intersegment revenue(2) -- 6,811 -- (6,811) --
-------- --- -------- --- ------- ------- ---------
Total segment
operating revenue 383,192 9,335 -- (6,811) 385,716
Costs of sales (excluding
depreciation and
amortization expenses) (175,850) 18 -- -- (175,832)
Intersegment costs of
sales (6,811) 6,811 --
Operating expenses(3) (58,325) (681) -- -- (59,006)
General and
administrative expenses (5,855) (427) (33,029) -- (39,311)
Proportionate EMI EBITDA -- 84,113 -- -- 84,113
Other segment items(4) 14,368 -- 27,426 -- 41,794
-------- --- -------- --- ------- ------- ---------
Segment Adjusted
EBITDA(5) $ 150,719 $ 92,358 $ (5,603) $ -- $ 237,474
======== === ======== === ======= ======= =========
Reconciliation of
Segment Adjusted EBITDA
to income before income
taxes
Segment adjusted EBITDA $ 150,719 $ 92,358 $ (5,603) $ -- $ 237,474
Add back:
Other interest income -- -- 530 -- 530
Gain on disposal of
assets 50 -- -- -- 50
Equity income from
unconsolidated
affiliates -- 43,523 -- -- 43,523
Deduct: --
Interest expense 81 -- 49,609 -- 49,690
Depreciation and
amortization
expenses 85,634 2,307 6 -- 87,947
Contract assets
amortization 1,656 -- -- -- 1,656
Proportionate EMI
EBITDA -- 84,113 -- -- 84,113
Share-based
compensation -- -- 23,669 -- 23,669
Loss on sale of
equity method
investment -- -- -- -- --
Commodity hedging
unrealized loss 12,722 -- -- -- 12,722
Loss on debt
extinguishment -- 35 -- -- 35
Contingent
liabilities fair
value adjustment (1,200) -- -- -- (1,200)
Integration costs 318 -- 417 -- 735
Acquisition /
divestiture
transaction costs -- -- 558 -- 558
Litigation costs -- -- 2,666 -- 2,666
Other one-time costs
or amortization 871 -- 117 -- 988
-------- --- -------- --- ------- ------- ---------
Income (loss) before
income taxes $ 50,687 $ 49,426 $(82,115) $ -- $ 17,998
======== === ======== === ======= ======= =========
Corporate
Midstream Pipeline and
Logistics Transportation Other(1) Elimination Consolidated
----------- ------------------ ---------- ------------- ----------------
For the Year Ended
December 31, 2025 (In thousands)
Revenue $1,743,171 $ 9,553 $ -- $ -- $ 1,752,724
Other revenue 11,657 8 -- -- 11,665
Intersegment revenue(2) -- 25,212 -- (25,212) --
--------- -------- ---- -------- -------- ---------
Total segment
operating revenue 1,754,828 34,773 -- (25,212) 1,764,389
Costs of sales (excluding
depreciation and
amortization expenses) (785,615) (333) -- -- (785,948)
Intersegment costs of
sales (25,212) -- -- 25,212 --
Operating expenses(3) (297,621) (2,632) -- -- (300,253)
General and
administrative expenses (23,878) (1,122) (105,616) -- (130,616)
Proportionate EMI EBITDA -- 339,448 -- -- 339,448
Other segment items(4) 13,343 -- 87,341 -- 100,684
--------- -------- ---- -------- -------- ---------
Segment Adjusted
EBITDA(5) $ 635,845 $ 370,134 $ (18,275) $ -- $ 987,704
========= ======== ==== ======== ======== =========
Reconciliation of
Segment Adjusted EBITDA
to income before income
taxes
Segment Adjusted
EBITDA(5) $ 635,845 $ 370,134 $ (18,275) $ -- $ 987,704
Add back:
Other interest income -- -- 1,510 -- 1,510
Commodity hedging
unrealized gain 18,871 -- -- -- 18,871
Gain on sale of
equity method
investment -- 415,409 -- -- 415,409
Equity income from
unconsolidated
affiliates -- 226,351 -- -- 226,351
Deduct:
Interest expense 138 -- 233,233 -- 233,371
Depreciation and
amortization
expenses 373,388 9,234 23 -- 382,645
Contract assets
amortization 6,794 -- -- -- 6,794
Proportionate EMI
EBITDA -- 339,448 -- -- 339,448
Share-based
compensation -- -- 62,617 -- 62,617
Loss on disposal of
assets, net 8 -- -- -- 8
Loss on debt
extinguishment -- -- 635 -- 635
Contingent
liabilities fair
value adjustment 5,190 -- -- -- 5,190
Integration costs 13,169 -- 1,789 -- 14,958
Acquisition /
divestiture
transaction costs -- -- 275 -- 275
Litigation costs -- -- 19,708 -- 19,708
Other one-time costs
and amortization 4,588 -- 2,952 -- 7,540
--------- -------- ---- -------- -------- ---------
Income (loss) before
income taxes $ 251,441 $ 663,212 $(337,997) $ -- $ 576,656
========= ======== ==== ======== ======== =========
Corporate
Midstream Pipeline and
Logistics Transportation Other(1) Elimination Consolidated
----------- ------------------ ---------- ------------- ----------------
For the year ended
December 31, 2024 (In thousands)
Revenue $1,461,898 $ 9,088 $ -- $ -- $ 1,470,986
Other revenue 11,652 291 -- -- 11,943
Intersegment revenue(2) -- 26,099 -- (26,099) --
--------- -------- ---- -------- -------- ---------
Total segment
operating revenue 1,473,550 35,478 -- (26,099) 1,482,929
Costs of sales (excluding
depreciation and
amortization expenses) (620,617) (1) -- -- (620,618)
Intersegment costs of
sales (26,099) -- -- 26,099 --
Operating expenses(3) (217,780) (2,904) -- -- (220,684)
General and
administrative expenses (19,623) (1,689) (112,845) -- (134,157)
Proportionate EMI EBITDA -- 346,666 -- -- 346,666
Other segment items(4) 25,452 -- 91,530 -- 116,982
--------- -------- ---- -------- -------- ---------
Segment Adjusted
EBITDA(5) $ 614,883 $ 377,550 $ (21,315) $ -- $ 971,118
========= ======== ==== ======== ======== =========
Reconciliation of
Segment Adjusted EBITDA
to income before income
taxes
Segment Adjusted
EBITDA(5) $ 614,883 $ 377,550 $ (21,315) $ -- $ 971,118
Add back:
Other interest income -- -- 1,988 -- 1,988
Gain on sale of
equity method
investment -- 89,802 -- -- 89,802
Equity in earnings of
unconsolidated
affiliates -- 213,191 -- -- 213,191
Deduct:
Interest expense 81 -- 217,154 -- 217,235
Depreciation and
amortization
expenses 314,970 9,204 23 -- 324,197
Contract assets
amortization 6,621 -- -- -- 6,621
Proportionate EMI
EBITDA -- 346,666 -- -- 346,666
Share-based
compensation -- -- 76,536 -- 76,536
Loss on disposal of
assets, net 4,040 -- -- -- 4,040
Commodity hedging
unrealized loss 10,788 -- -- -- 10,788
Loss on debt
extinguishment -- -- 525 -- 525
Contingent
liabilities fair
value adjustment 200 -- -- -- 200
Integration costs 2,110 -- 3,716 -- 5,826
Acquisition /
divestiture
transaction costs -- -- 4,096 -- 4,096
Litigation costs 229 -- 5,845 -- 6,074
Other one-time costs
or amortization 4,690 -- 1,337 -- 6,027
--------- -------- ---- -------- -------- ---------
Income (loss) before
income taxes $ 271,154 $ 324,673 $(328,559) $ -- $ 267,268
========= ======== ==== ======== ======== =========
(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) 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, share-based compensation
expense, noncash increases and decreases related to commodity hedging
activities, integration and transaction costs, litigation costs and
extraordinary losses and unusual or non-recurring charges. Adjusted
EBITDA provides a basis for comparison of our business operations
between current, past and future periods by excluding items that we do
not believe are indicative of our core operating performance. Adjusted
EBITDA should not be considered as an alternative to the GAAP measure of
net income including non-controlling interest or any other measure of
financial performance presented in accordance with GAAP.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260225597718/en/
CONTACT: Investor Contact
Alex Durkee
(713) 574-4743
investors@kinetik.com
(END) Dow Jones Newswires
February 25, 2026 16:15 ET (21:15 GMT)