What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-10 · 477 added, 344 removed, 529 unchanged (61% of the section changed)

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,*

Three Months Ended June 30,* Six Months Ended June 30,*

2022 2021 2022 2021

(In thousands, except per share data)

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Gain on redemption of mandatorily redeemable Preferred Units 5,087 — 9,580 —

Unrealized loss on embedded derivative

Gain (loss) on debt extinguishment ( 27,975 ) 60 ( 27,975 ) 60

Unrealized gain on embedded derivative 91,448 — 88,562 —

Interest expense ( 25,347 ) ( 32,607 ) ( 52,121 ) ( 57,917 )

1 unchanged sentence

Total other income (expense), net 90,999 ( 16,010 ) 93,999 ( 29,428 )

Income before income taxes

Income (loss) before income taxes 131,610 ( 15,366 ) 153,675 2,770

Income tax expense 162 — 838 —

Net income including noncontrolling interest

Net income (loss) including noncontrolling interest 131,448 ( 15,366 ) 152,837 2,770

Net income attributable to Preferred Unit limited partners 109,502 — 114,495 —

Net Income attributable to common shareholders

Net income attributable to Common Unit limited partners

Net Income (loss) attributable to common shareholders 21,946 ( 15,366 ) 38,342 2,770

Net income (loss) attributable to Common Unit limited partners 15,508 ( 15,366 ) 28,039 2,770

Net income attributable to Class A Common Shareholders $ 6,438 $ — $ 10,303 $ —

Net income attributable to Class A Common Shareholders per share

Basic $ 0.06 $ — $ 0.16 $ —

Diluted $ 0.06 $ — $ 0.16 $ —

Weighted-average shares **

Basic 39,297 — 38,766 —

Diluted 39,329 — 38,796 —

* The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022.

Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation.

Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

** Share amounts have been retroactively restated to reflect the Company’s Stock Split (as defined in Note 10 — Equity and Warrants ), which was effected on June 8, 2022.

Refer to Note 10 – Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements

Table of Con ten ts

KINETIK HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

June 30, December 31,

(In thousands, except share amounts)

CURRENT ASSETS:

1 unchanged sentence

Accounts receivable, net of allowance for credit losses of $ 1,000 in 2022 and 2021

Derivative assets

296,218 178,107

Prepaid and other current assets 40,226 20,683

341,763 217,519

NONCURRENT ASSETS:

1 unchanged sentence

Intangible assets, net 747,721 786,049

Derivative assets

Operating lease right-of-use assets 53,016 61,562

1 unchanged sentence

Investment in unconsolidated affiliates 2,342,311 626,477

Goodwill 4,081 —

5,654,585 3,335,687

Total assets $ 5,996,348 $ 3,553,206

LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY

4 unchanged sentences

Derivative liabilities — 2,667

Mandatorily redeemable Preferred Units

Current portion of operating lease liabilities 35,327 31,776

1 unchanged sentence

Other current liabilities 6,835 4,339

305,957 240,925

NONCURRENT LIABILITIES:

Long-term debt, net 2,971,270 2,253,422

Contingent liabilities

Operating lease liabilities

Contract liabilities 22,899 11,674

Mandatorily redeemable Preferred Units

Operating lease liabilities 17,447 29,889

Embedded derivative liabilities 488 —

Derivative liabilities — 200

Deferred tax liabilities

Other liabilities 2,459 2,219

Contingent liabilities — 839

Deferred tax liabilities 11,813 7,190

Mandatorily redeemable Preferred Units 30,717 —

3,057,093 2,305,433

Total liabilities 3,363,050 2,546,358

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Class A Common Stock:

$ 0.0001 par, 1,500,000,000 shares authorized, 18,986,460 and nil shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

$ 0.0001 par, 1,500,000,000 shares authorized, 40,550,555 and nil shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively *

Class C Common Stock:

$ 0.0001 par, 1,500,000,000 shares authorized, 47,260,000 and 50,000,000 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

$ 0.0001 par, 1,500,000,000 shares authorized, 94,450,000 and 100,000,000 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively *

Accumulated deficit ( 1,181,343 ) —

( 1,181,330 ) 10

( 1,137,860 )

Total liabilities, noncontrolling interests, and equity $ 5,996,348 $ 3,553,206

* Share amounts have been retroactively restated to reflect the Company’s Stock Split.

Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements

Table of Con ten ts

KINETIK HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

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Amortization of contract costs 896 896

Contingent liabilities remeasurement ( 839 ) —

Distributions from unconsolidated affiliates 117,544 27,882

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Loss on disposal of assets 8,656 454

Equity in (earnings) losses from unconsolidated affiliate

Loss (gain) on debt extinguishment

Equity in earnings from unconsolidated affiliates ( 75,703 ) ( 27,866 )

(Gain) loss on debt extinguishment 27,975 ( 60 )

Share-based compensation 18,304 —

2 unchanged sentences

Accounts receivable ( 100,511 ) ( 62,213 )

Operating lease right-of-use assets

Other assets ( 11,892 ) ( 14,675 )

Accounts payable ( 3,844 ) ( 777 )

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Investment in unconsolidated affiliates ( 2,675 ) ( 20,522 )

Cash proceeds from disposals 160 58

Net cash acquired in acquisition 13,401 —

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Principal payments on long-term debt ( 2,294,130 ) ( 50,980 )

Payment on debt issuance costs ( 37,042 ) ( 3,152 )

Proceeds from revolver 7,000 21,500

Payment on revolver ( 716,000 ) ( 14,500 )

Redemption of mandatorily redeemable Preferred Units ( 152,580 ) —

Payments of deferred financing costs

Distributions paid to mandatorily redeemable Preferred Units holders ( 1,850 ) —

Distributions paid to redeemable noncontrolling interests Preferred Units limited partners ( 6,937 ) —

Cash dividends paid to Class A Common Stock shareholders ( 11,239 ) —

Distributions paid to Class C Common Units limited partners ( 491 ) ( 30,189 )

Equity contributions — 14,890

Equity distributions

Net cash (used in) provided by financing activities ( 213,269 ) ( 32,242 )

5 unchanged sentences

Property and equipment and intangible accruals in accounts payable and accrued liabilities $ 20,344 $ 9,322

Class A Common Stock issued through dividend and distribution reinvestment plan $ 87,697 $ —

Fair value of ALTM assets acquired $ 2,446,430 $ —

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners (1)

Redeemable Noncontrolling Interest — Common Unit Limited Partners

Class A Common Stock

Class C Common Stock

Additional Paid-in Capital

Accumulated Deficit

(In thousands)

For the Quarter Ended March 31, 2021

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners* Redeemable Noncontrolling Interest — Common Unit Limited Partners Class A Common Stock Class C Common Stock Additional Paid-in Capital Accumulated Deficit Total Equity

Shares** Amount Shares** Amount

(In thousands) (In thousands)

For the Quarter Ended June 30, 2021

Balance at March 31, 2021 $ — $ 1,044,492 — $ — 100,694 $ 10 $ — $ — $ 10

Net loss — ( 15,366 ) — — — — — — —

Balance at June 30, 2021 $ — $ 1,029,126 — $ — 100,694 $ 10 $ — $ — $ 10

For the Quarter Ended June 30, 2022

Balance at March 31, 2022 $ 460,773 $ 3,185,431 37,973 $ 4 94,520 $ 9 $ — $ ( 1,137,873 ) $ ( 1,137,860 )

Distributions payable to Preferred Unit limited partners ( 6,937 ) — — — — — — — —

Redemption of Common Units — ( 2,499 ) 70 — ( 70 ) — 2,499 — 2,499

Issuance of Class A Common Stock through dividend and distribution reinvestment plan — — 2,504 — — — 87,697 — 87,697

Share-based compensation — — 4 — — — 12,173 — 12,173

Net income 109,502 15,508 — — — — — 6,438 6,438

Change in redemption value of noncontrolling interests — 123,741 — — — — ( 102,369 ) ( 21,372 ) ( 123,741 )

Distributions paid to Common Unit limited partners — ( 70,891 ) — — — — — — —

Cash dividends on Class A Common Stock ($ 0.75 per share)

— — — — — — — ( 28,536 ) ( 28,536 )

Balance at June 30, 2022 $ 563,338 $ 3,251,290 40,551 $ 4 94,450 $ 9 $ — $ ( 1,181,343 ) $ ( 1,181,330 )

* Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value.

For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

** Share amounts have been retroactively restated to reflect the Company’s S tock Split.

Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

KINETIK HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS - (Continued)

Shares** Amount Shares** Amount

(In thousands) (In thousands)

For the Six Months Ended June 30, 2021

Balance at December 31, 2020 $ — $ 1,041,655 — $ — 101,198 $ 10 $ — $ — $ 10

Contribution — 14,890 — — 492 — — — —

Distribution paid to Common Unit limited partners — ( 30,189 ) — — ( 996 ) — — — —

Balance at March 31, 2021

For the Quarter Ended March 31, 2022

Net income — 2,770 — — — — — — —

Balance at June 30, 2021 $ — $ 1,029,126 — $ — 100,694 $ 10 $ — $ — $ 10

For the Six Months Ended June 30, 2022

Balance at December 31, 2021 $ — $ 1,006,838 — $ — 100,000 $ 10 $ — $ — $ 10

ALTM acquisition 462,717 — 32,493 3 — — 1,013,742 — 1,013,745

Distributions paid to Preferred Unit limited partners ( 6,937 ) — — — — — — — —

Distributions payable to Preferred Unit limited partners ( 6,937 ) — — — — — — — —

Redemption of Common Units — ( 172,559 ) 5,550 1 ( 5,550 ) ( 1 ) 172,559 — 172,559

Issuance of common stock through dividend and distribution reinvestment plan — — 2,504 — — — 87,697 — 87,697

Share-based compensation — — 4 — — — 18,304 — 18,304

Remeasurement of contingent consideration — — — — — — 4,451 — 4,451

Net income 114,495 28,039 — — — — — 10,303 10,303

Change in redemption value of noncontrolling interests — 2,459,863 — — — — ( 1,296,753 ) ( 1,163,110 ) ( 2,459,863 )

( 1,194,385 )

( 1,141,732 )

( 2,336,117 )

Balance at March 31, 2022

( 1,137,867 )

Distributions paid to Common Units limited partners — ( 70,891 ) — — — — — — —

Cash dividends on Class A Common Stock ($ 0.75 per share)

— — — — — — — ( 28,536 ) ( 28,536 )

Balance at June 30, 2022 $ 563,338 $ 3,251,290 40,551 $ 4 94,450 $ 9 $ — $ ( 1,181,343 ) $ ( 1,181,330 )

* Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value.

For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to the Condensed Consolidated Financial Statements.

** Share amounts have been retroactively restated to reflect the Company’s Stock Split.

Refer to Note 10 — Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

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(formerly known as Altus Midstream Company) (the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited financial statements, with the exception of recently adopted accounting pronouncements.

They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for interim periods, on a basis consistent with the annual audited financial statements, with the exception of recently adopted accounting pronouncements.

All such adjustments are of a normal recurring nature.

Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

This Quarterly Report on Form 10-Q should be read along with Kinetik Holdings Inc.’s audited financial statements and related notes thereto for the year ended December 31, 2021 filed as Exhibit 99.4 to the Company’s Current Report on Form 8-K filed on February 28, 2022.

Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the audited financial statements for the year ended December 31, 2021 filed as Exhibit 99.4 to the Company’s Current Report on Form 8-K filed on February 28, 2022

This Quarterly Report on Form 10-Q should be read along with Kinetik Holdings Inc.’s audited financial statements and related notes thereto for the year ended December 31, 2021 filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on July 5, 2022 and the Company’s Quarterly Report on Form 10-Q for the first quarter of 2022 filed on May 10, 2022.

Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the audited financial statements for the year ended December 31, 2021 filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on July 5, 2022 and the Company’s Quarterly Report on Form 10-Q filed on May 10, 2022.

DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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As a result of the Transaction, immediately following the Closing (i) Contributor held approximately 75 % of the issued and outstanding Common Stock, (ii) Apache Midstream LLC, a Delaware limited liability company (“Apache Midstream”), held approximately 20 % of the issued and outstanding Common Stock, and (iii) the Company’s remaining stockholders held approximately 5 % of the issued and outstanding Common Stock.

Following the Closing, there were approximately 66.2 million total shares of Common Stock outstanding.

The Company completed a two -for-one Stock Split in the form of a stock dividend on June 8, 2022.

All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated elsewhere in this Form 10-Q to reflect the two -for-one Stock Split.

However, the number of Common Units and shares of Class C Common Stock described in this Form 10-Q in relation to the Transaction are presented at pre-Stock-Split amounts to be consistent with our previous public filings and the terms of the Contribution Agreement.

In connection with the Closing, the Company changed its name from “Altus Midstream Company” (“ALTM”) to “Kinetik Holdings Inc.” Unless the context otherwise requires, “ALTM” refers to the registrant prior to the Closing and “we,” “us,” “our,” and the “Company” refer to Kinetik Holdings Inc., the registrant and its subsidiaries following the Closing.

BCP was formed on April 25, 2017 as a Delaware limited partnership to acquire and develop midstream oil and gas assets.

BCP’s primary operating subsidiaries are EagleClaw and CR Permian Holdings, LLC (“CR Permian”).

Both subsidiaries were formed to design, engineer, install, own and operate facilities and provide services for produced natural gas gathering, compression, processing, treating and dehydration, and condensate separation, stabilization, and storage, crude oil gathering and storage, water gathering and disposal assets.

BCP’s primary operating subsidiaries are EagleClaw Midstream Ventures, LLC (“EagleClaw”) and CR Permian Holdings, LLC (“CR Permian”).

Both subsidiaries were formed to design, engineer, install, own and operate facilities and

provide services for produced natural gas gathering, compression, processing, treating and dehydration, and condensate separation, stabilization, and storage, crude oil gathering and storage, water gathering and disposal assets.

ALTM was originally incorporated on December 12, 2016 in Delaware under the name Kayne Anderson Acquisition Corp.

(“KAAC”) for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

KAAC completed its initial public offering in the second quarter

KAAC completed its initial public offering in the second quarter of 2017.

On August 3, 2018, Altus Midstream LP was formed in Delaware as a limited partnership and wholly-owned subsidiary of KAAC and entered into a contribution agreement with certain affiliates of Apache Corporation (“Apache” and such affiliates the “Altus Midstream Entities”), formed by Apache between May 2016 and January 2017, for the purpose of acquiring, developing, and operating midstream oil and gas assets in the Alpine High resource play and surrounding areas (“Alpine High”).

On November 9, 2018, KAAC acquired all equity interests of the Altus Midstream Entities and changed its name to Altus Midstream Company.

On February 22, 2022, upon the Closing, legacy BCP and its subsidiaries became wholly-owned subsidiaries of the legacy Altus Midstream Company.

The Transaction was accounted for as a reverse merger pursuant to ASC 805 Business Combination (“ASC 805”) , refer to Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for an additional discussion.

On February 22, 2022, upon the Closing, BCP and its subsidiaries became wholly owned subsidiaries of the Partnership.

The Transaction was accounted for as a reverse merger pursuant to ASC 805 Business Combination (“ASC 805”).

Refer to Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements for additional details.

Nature of Operations

Through its consolidated subsidiaries, the Company provides comprehensive gathering, water disposal, transportation, compression, processing and treating services necessary to bring natural gas, NGLs and crude oil to market.

Additionally, the Company owns equity interests in four separate Permian Basin egress pipeline entities that have access to various markets along the Texas Gulf Coast.

Additionally, the Company owns equity interests in four separate Permian Basin pipeline entities that have access to various markets along the Texas Gulf Coast.

Basis of Presentation

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Refer to Note 2—Business Combination to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion.

The Company completed a two-for-one Stock Split on June 8, 2022.

All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated in this Form 10-Q to reflect the two-for-one Stock Split, except for the number of Common Units and shares of Class C Common Stock described above in relation to the Transaction, which are presented at pre-Stock-Split amounts.

This presentation election is consistent with our previous public filings and the terms of the Contribution Agreement.

Use of Estimates

Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources.

The Company evaluates its estimates and assumptions on a regular basis.

Actual results may differ from these estimates and assumptions used in preparation of its condensed consolidated financial statements, and changes in these estimates are recorded when known.

Significant items subject to such estimates and assumptions include the valuation of derivatives, tangible and intangible assets, share-based compensation, contingent liabilities, mandatorily redeemable Preferred Units (as defined below) and noncontrolling interests.

Variable Interest Entity

8 unchanged sentences

and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $ 0.0001 per share, to Contributor.

Please refer to the Transaction discussed above.

The Common Units are redeemable at the option of unit holders and accounted for on the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity.

Please refer to “The Transaction” above.

The Common Units are redeemable at the option of unit holders and accounted for in the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity.

The Company records the redeemable noncontrolling interest at the higher of (i) its initial value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the maximum redemption value as of the balance sheet date.

The redemption value was

determined based on a 5-day volume weighted average closing price of the Class A Common Stock.

See discussion and additional details in Note 10—Equity and Warrant s.

The redemption value was determined based on a 5-day volume weighted-average closing price of the Class A Common Stock.

See discussion and additional details in Note 10—Equity and Warrant s in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

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The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company.

In July 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units.

See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

The Preferred Units are accounted for on the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units.

Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value and are accounted for on the Company’s Condensed Consolidated Balance Sheet as a long-term liability embedded derivative.

See discussion and additional detail in Note 11—Series A Cumulative Redeemable Preferred Units .

See discussion and additional detail in Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Equity Method Investments

1 unchanged sentence

Under this method, the equity investments are carried originally at acquisition cost, increased by the Company’s proportionate share of the equity interest’s net income and contributions made, and decreased by the Company’s proportionate share of the equity interest’s net losses and distributions received.

Please refer to Note 9—Equity Method Investments , for further details of the Company’s equity method investments.

Please refer to Note 9—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q, for further details of the Company’s equity method investments.

Equity method investments acquired in the Transaction were recorded at fair value upon Closing.

See discussion and additional detail in Note 2—Business Combination for purchase price allocation of the Transaction.

Use of Estimates

Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period.

The Company evaluates its estimates and assumptions on a regular basis.

Actual results may differ from these estimates and assumptions used in preparation of its condensed financial statements, and changes in these estimates are recorded when known.

Significant items subject to such estimates and assumptions include the valuation of derivatives, the valuation of tangible and intangible assets, the valuation of share-based compensation, the valuation of contingent liabilities, the valuation of mandatorily redeemable Preferred Units, and the valuation of noncontrolling interests.

Other current assets include inventory that consists of condensate, and NGLs that are valued at the lower of cost or market.

See discussion and additional detail in Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for purchase price allocation of the Transaction.

Other current assets include condensate, residue gas and NGLs inventories that are valued at the lower of cost or market.

At the end of each reporting period, the Partnership assesses the carrying value of inventory and makes any adjustments necessary to reduce the carrying value to the applicable net realizable value.

Inventory was valued at $ 4.8 million and $ 2.1 million as of March 31, 2022 and December 31, 2021, respectively.

Inventory was valued at $ 13.0 million and $ 2.1 million as of June 30, 2022 and December 31, 2021, respectively.

Impairment of Long-Lived Assets

In accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 360, Property, Plant and Equipment, long-lived assets, excluding goodwill, to be held and used by the Company are reviewed for impairment annually or on an interim basis if events or circumstances indicate that the fair value of the assets have decreased below their carrying value.

In accordance with Financial Accounting Standards Board (“FASB”) ASC 360, Property, Plant and Equipment, long-lived assets, excluding goodwill, to be held and used by the Company are reviewed for impairment annually or on an interim basis if events or circumstances indicate that the fair value of the assets have decreased below their carrying value.

For long-lived assets to be held and used, the Company bases their evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present.

The Company’s management assesses whether there has been an impairment trigger, and if a trigger is identified, then the Company would perform an undiscounted cash flow test at the lowest level for which identifiable cash flows are independent of cash flows from other assets.

If the sum of the undiscounted future net cash flows is less than the net book value of the property, an impairment loss is recognized for the excess, if any, of the property’s net book value over its estimated fair value.

The Company did no t recognize impairment losses for long-lived assets during the three months ended March 31, 2022 and 2021.

If the sum of the undiscounted future net cash flows is less than the net book value of the property, an impairment loss is recognized for any excess of the property’s net book value over its estimated fair value.

The Company did no t recognize impairment losses for long-lived assets during the three and six months ended June 30, 2022 and 2021.

Transactions with Affiliates

The accounts receivable from or payable to affiliate represent the net result of the Company’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache and its subsidiaries, who held equity shares that represented approximately 13.6 % of the Company’s voting power as of April 22, 2022.

Accounts receivable from affiliate was $ 24.7 million as of March 31, 2022.

For the three months ended March 31, 2022, revenue from affiliate was $ 15.6 million.

Accrued expense due to affiliate was $ 4.2 million as of March 31, 2022 and operating expenses for the three months ended March 31, 2022 were immaterial.

The accounts receivable from or payable to affiliates represent the net result of the Company’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache and its subsidiaries, who controlled the Company prior to the Transaction.

Accounts receivable from affiliates was $ 20.2 million as of June 30, 2022.

Revenue from affiliates was $ 30.5 million and $ 46.2 million for the three and six months ended June 30, 2022, respectively.

Accrued expense due to affiliates was $ 0.2 million as of June 30, 2022, and operating expenses for the three and six months ended June 30, 2022 were immaterial.

Net Income Per Share

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Class C Common Stock is excluded from the weighted-average shares outstanding for the calculation of basic net income per share, as holders of Class C Common Stock are not entitled to any dividends or liquidating distributions.

No net income per share was computed for the three and six months ended June 30, 2021, as no Class A Common Stock was outstanding with respect to BCP as the accounting acquirer as of June 30, 2021.

The Company uses the “if-converted method” to determine the potential dilutive effect of (i) an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) for shares of Class A Common Stock, (ii) an assumed exercise of the outstanding public and private warrants for shares of Class A Common Stock and (iii) an assumed exchange of the outstanding Preferred Units for shares of Class A Common Stock.

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With adoption of ASU 2021-08, the Company assumed contract liabilities at carrying value of $ 9.1 million upon Closing.

Effective January 1, 2022, the Company adopted ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”) .

ASU 2020-04 was issued to ease the potential accounting burden expected when global capital markets move away from LIBOR, the benchmark interest rate banks use to make short-term loans to each other.

The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationship, and other transactions affected by

reference rate reform if certain criteria are met.

Interest rate applied to the Company’s new debt resulting from the comprehensive refinance is based on Secured Overnight Financing Rate (“SOFR”), which is a broad measure of the cost of borrowing cash overnight collateralized by treasury securities.

Refer to Note 6 —Debt and Financing Cos ts in the Notes to our Condensed Consolidated Financial Statements of this Form 10-Q for discussion of SOFR applicable to the Company’s debt structures.

Recent Accounting Pronouncement Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”) .

ASU 2020-04 was issued to ease the potential accounting burden expected when global capital markets move away from the London Interbank Offered Rate (“LIBOR”), the benchmark interest rate banks use to make short-term loans to each other.

The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationship, and other transactions affected by reference rate reform if certain criteria are met.

The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”).

The amendments in ASU 2022-03 clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

The amendments also require the following disclosures for equity securities subject to contractual sale restrictions:

(1) The fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet;

(2) The nature and remaining duration of the restriction(s);

(3) The circumstances that could cause a lapse in the restriction(s).

This guidance is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.

The Company is currently evaluating the effect that ASU 2022-03 will have on its Consolidated Financial Statements.

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The guidance is effective for public business entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted the amendments in

ASU 2017-02 for the corresponding period.

Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted the amendments in ASU 2017-02 for the corresponding period.

The Company is currently evaluating the effect that ASU 2022-01 will have on its Consolidated Financial Statements.

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Please refer to ““—The Transaction” discussed above.

The Transaction was accounted for as a business combination in accordance with ASC 805, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value.

The Transaction was accounted for as a business combination in accordance with ASC 805, which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value.

The Company also adopted ASU 2021-08, effective as of January 1, 2022, to record contract liabilities at their carrying value as of the acquisition date.

Although the Company was the legal acquirer, BCP and BCP GP were determined to be the accounting acquirer and legal acquiree.

Although the Company was the legal acquirer, BCP was determined to be the accounting acquirer and legal acquiree.

As a result, BCP and its subsidiaries’ net assets were carried at historical value, acquired net assets were measured at fair value except contract liabilities being recorded at carrying value at the acquisition date, and results of operations of ALTM and its subsidiaries were included in the Company’s Condensed Consolidated Financial Statements from the Closing Date going forward.

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The following table summarizes the preliminary estimated fair value of assets acquired and liabilities assumed in the Transaction in accordance with ASC 805:

(In thousands)

(In thousands) Amount

Cash and cash equivalent $ 13,401

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Prepaid expense and other assets 8,225

Goodwill 4,081

Total assets acquired 2,446,430

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Total consideration transferred $ 1,013,745

The Company incurred acquisition-related costs of $ 5.7 million for the three months ended March 31, 2022.

During the quarter ended March 31, 2022, the Company assumed additional revolver liabilities through the Transaction.

There was no significant modification to the Company’s debt structure.

The Company incurred acquisition-related costs of $ 0.7 million and $ 6.4 million for the three and six months ended June 30, 2022, respectively.

Supplemental Pro Forma Information

The unaudited supplemental pro forma financial for informational purposes only and is not indicative of future results.

The results below for the three months ended March 31, 2022 and 2021 combine the results of the Company and the Partnership, giving effect to the Transaction as if it had been completed on January 1, 2021.

Three Months Ended March 31,

(In thousands)

The unaudited supplemental pro forma financials are for informational purposes only and are not indicative of future results.

The results below for the three and six months ended June 30, 2022 and 2021 combine the results of the Company and the Partnership, giving effect to the Transaction as if it had been completed on January 1, 2021.

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

(In thousands) Pro forma Pro forma Pro forma Pro forma

Revenues $ 335,572 $ 171,359 $ 619,674 $ 353,608

Net income including noncontrolling interest $ 132,159 $ 18,845 $ 145,627 $ 35,647

Given the assumed pro forma transaction date of January 1, 2021, we removed $ 18.7 million of acquisition-related expenses for the three months ended March 31, 2022 and recognized $ 29.0 million of total acquisition-related expenses for the three months ended March 31, 2021.

Given the assumed pro forma transaction date of January 1, 2021, we removed $ 0.7 million and $ 19.5 million of acquisition-related expenses for the three and six months ended June 30, 2022, respectively, and recognized $ 2.2 million and $ 31.1 million of total acquisition-related expenses for the three and six months ended June 30, 2021, respectively.

REVENUE RECOGNITION

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The following table presents a disaggregation of the Company’s revenue.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

(In thousands)

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Total revenues and other $ 335,572 $ 135,766 $ 592,821 $ 283,869

There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2022 and 2021.

Contracts with customers acquired through the Transaction had similar structure as the Company’s existing contracts with customers.

The Company recognized revenues from MVC deficiency payments of nil and $ 2.5 million for the three months ended March 31, 2022 and 2021, respectively.

There have been no significant changes to the Company’s contracts with customers during the three and six months ended June 30, 2022.

Contracts with customers acquired through the Transaction had similar structures as the Company’s existing contracts with customers.

The Company recognized revenues from MVC deficiency payments of $ 0.3 million and nil for the three months ended June 30, 2022 and 2021, respectively, and $ 0.3 million and $ 2.5 million for the six months ended June 30, 2022 and 2021, respectively.

Remaining Performance Obligations

The following table presents our estimated revenue from contracts with customers for remaining performance obligations that has not yet been recognized, representing our contractually committed revenues as of March 31, 2022:

(In thousands)

Fiscal Year (In thousands)

Remaining of 2022 $ 10,633

Thereafter 191,293

Our contractually committed revenue, for purposes of the tabular presentation above, is generally limited to customer contracts that have fixed pricing and fixed volume terms and conditions, generally including contracts with payment obligations associated with MVCs.

Contract Liabilities

The following table provides information about contract liabilities from contracts with customers as of March 31, 2022:

The following table provides information about contract liabilities from contracts with customers as of June 30, 2022:

(In thousands)

Balance as of January 1, 2022

Balance at December 31, 2021 $ 14,756

Reclassification of beginning contract liabilities to revenue as a result of performance obligation being satisfied ( 3,224 )

Cash received and not recognized as revenue 17,517

Balance as of March 31, 2022

Balance at June 30, 2022 29,049

Current portion 6,150

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These costs are recovered through the net cash flows of the associated contract.

As of March 31, 2022 and December 31, 2021, the Company had contract acquisition cost assets of $ 17.9 million and $ 18.4 million, respectively.

As of June 30, 2022 and December 31, 2021, the Company had contract acquisition cost assets of $ 17.5 million and $ 18.4 million, respectively.

Current and noncurrent contract cost assets are included in “Prepaid and Other Current Assets” and “Deferred Charges and Other Assets,” respectively, of the Condensed Consolidated Balance Sheets.

The Company amortizes these assets as cost of sales on a straight-line basis over the life of the associated long-term customer contract.

For the three months ended March 31, 2022 and 2021, the Company recognized cost of sales associated with these assets of $ 0.4 million and $ 0.4 million, respectively.

The Company recognized cost of sales associated with these assets of $ 0.4 million and $ 0.4 million for the three months ended June 30, 2022 and 2021, respectively, and $ 0.9 million and $ 0.9 million for the six months ended June 30, 2022 and 2021, respectively.

PROPERTY, PLANT AND EQUIPMENT

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Major improvements or betterment are capitalized, while repairs that do not improve the life of the respective assets are expensed as incurred.

Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets as follows:

Estimated Useful Life

Gathering, processing and transmission systems and facilities

Furniture and fixtures

Computer hardware and software

Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets.

Property, plant and equipment, at carrying value, is as follows:

June 30, 2022 December 31, 2021

(In thousands)

Gathering, processing and transmission systems and facilities $ 2,788,565 $ 2,121,434

Vehicles 7,194 6,090

Computers and equipment 3,796 4,271

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Construction in progress 64,332 24,888

Land 20,179 19,626

Total property, plant and equipment, net $ 2,481,072 $ 1,839,279

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These amounts represent property that is not yet available to be placed into productive service as of the respective reporting date.

The Company recorded $ 30.8 million and $ 25.6 million of depreciation expense for the three months ended March 31, 2022 and 2021, respectively.

The Company recorded $ 36.6 million and $ 26.6 million of depreciation expense for the three months ended June 30, 2022 and 2021, respectively, and $ 67.5 million and $ 52.2 million of depreciation expense for the six months ended June 30, 2022 and 2021, respectively.

GOODWILL AND INTANGIBLE ASSETS, NET

The Company closed a business combination transaction on February 22, 2022, refer to the Transaction in Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

The Transaction was accounted for as business combination pursuant to ASC 805 Business Combination (“ASC 805”) .

The Transaction was accounted for as a business combination pursuant to ASC 805.

In connection with the Transaction, the Company recorded excess of the purchase price over net assets acquired as goodwill.

The Company recorded goodwill of $ 3.9 million upon Closing and as of March 31, 2022.

The Company recorded goodwill of $ 4.1 million as of June 30, 2022.

Goodwill is tested at least annually as of December 31 of each year, or more frequently as events occur or circumstances change that would more-likely-than-not reduce fair value of a reporting unit below its carrying value.

Company’s management assesses whether there has been event or circumstance that triggers the fair value of the reporting unit to be lower than its net carrying value since consummation of the Transaction, and concluded that goodwill was not impaired as of March 31, 2022.

Company’s management assesses whether there have been events or circumstances that trigger the fair value of the reporting unit to be lower than its net carrying value since consummation of the Transaction, and concluded that goodwill was not impaired as of June 30, 2022.

Intangible Assets

Intangible assets, net are comprised of the following:

June 30, 2022 December 31, 2021

(In thousands)

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Total amortizable intangible assets, net $ 747,721 $ 786,049

The fair value of acquired customer contracts was capitalized as a result of acquiring favorable customer contracts as of the closing dates of certain past acquisitions and is being amortized using a straight-line method over the remaining term of the customer contracts, which range from one to 20 years.

Right of way assets relate primarily to underground pipeline easements and have a useful life of ten years and are amortized using the straight-line method.

The right of way agreements are generally for an initial term of ten years with an option to renew for an additional ten years at agreed upon renewal rates based on certain indices or up to 130 % of the original consideration paid.

The Company recorded $ 30.2 million and $ 30.4 million of amortization expense for the three months ended March 31, 2022 and 2021, respectively.

There was no impairment recognized on intangible assets for the three months ended March 31, 2022 and 2021.

The Company recorded $ 30.0 million and $ 30.5 million of amortization expense for the three months ended June 30, 2022 and 2021, respectively, and $ 60.1 million and $ 60.9 million of amortization expense for the six months ended June 30, 2022 and 2021, respectively.

There was no impairment recognized on intangible assets for the three and six months ended June 30, 2022 and 2021.

DEBT AND FINANCING COSTS

During the quarter ended March 31, 2022, the Company assumed additional revolver liabilities through the Transaction closed in February 2022.

There was no significant modification to the Company’s debt structure.

2017 Credit Facility - BCP 1

On June 22, 2017, BCP Raptor, LLC (“BCP I”), a wholly owned subsidiary of BCP and the parent of EagleClaw Midstream Ventures, LLC (“EagleClaw”), entered into a credit agreement with its lenders and with Jefferies Finance LLC, as administrative agent, for a term loan in and initial aggregate principal amount of $ 1.25 billion with a tenor of seven years , maturing on June 22, 2024.

Fixed principal payments equal to 0.25 % of the initial principal amount are required to be paid quarterly.

Interest is paid on the term loan periodically at a rate equal to 4.25 % plus LIBOR subject to a floor of 1.0 %.

The Company paid scheduled principal payments on this term loan of $ 3.1 million for the three months ended March 31, 2022 and 2021.

BCP I repurchased $ 2.9 million of the outstanding term loan during the first quarter of 2021.

No repurchase was made for this term loan during the first quarter of 2022.

In addition, contemporaneously with the credit agreement described above, BCP I entered into a super-priority revolving credit agreement with its lenders and with Jefferies Finance LLC, as administrative agent, in an initial aggregate principal amount of $ 100.0 million with a tenor of five years , maturing on June 22, 2022.

On January 16, 2020, BCP I entered into an amendment to the revolving credit agreement that increased the revolving commitment in an aggregate principal amount of $ 25.0 million, thereby increasing the aggregate revolving credit commitments of all lenders to $ 125 million.

On January 4, 2021, BCP I entered into an amendment to extend the maturity date from June 22, 2022 to November 3, 2023.

Interest is paid on the revolver periodically at a rate equal to LIBOR ( 0 % floor) plus 4.00 %, which decreases to LIBOR ( 0 % floor) plus 3.75 % when BCP I’s consolidated net leverage ratio is no greater than 4.50 to 1.00.

BCP I must pay commitment fees quarterly in an amount equal to 0.50 % per annum, which decreases to 0.375 % per annum when BCP I’s consolidated net leverage is no greater than 4.50 to 1.00, in each case on the unused portion of the commitment.

As of March 31, 2022 and December 31, 2021, there were $ 59.0 million and $ 52.0 million in outstanding borrowings under the revolving credit facility, respectively.

2018 Credit Facilities - BCP II and Partnership

In November 2018, the Partnership entered into a revolving credit facility for general corporate purposes that matures in November 2023 (subject to two , one year extension options) (“Corporate Facility”).

The agreement for this revolving credit facility provides aggregate commitments from a syndicate of banks of $ 800.0 million.

The aggregate commitments include a letter of credit subfacility of up to $ 100.0 million and a swingline loan subfacility of up to $ 100.0 million.

The Partnership may increase commitments up to an aggregate $ 1.5 billion by adding new lenders or obtaining the consent of any increasing existing lenders.

As of March 31, 2022, there were $ 657.0 million of borrowings and $ 2.0 million of letters of credit outstanding under this facility.

At the Partnership’s option, the interest rate per annum for borrowings under this facility is either a base rate, as defined, plus a margin, or LIBOR, plus a margin.

The Partnership also pays quarterly a facility fee at a rate per annum on total commitments.

At March 31, 2022, the base rate margin was 0.05 %, the LIBOR margin was 1.05 %, and the facility fee was 0.20 %.

In addition, a commission is payable quarterly to the lenders on the face amount of each outstanding letter of credit at a per annum rate equal to the LIBOR margin then in effect.

Contemporaneous with the close of the CR Permian acquisition on November 1, 2018, BCP Raptor II, LLC (“BCP II”), a wholly owned subsidiary of BCP and the parent of CR Permian, entered into a credit agreement with its lenders and with Barclays Bank PLC, as administrative agent, for a term loan in an initial aggregate principal amount of $ 690.0 million with a tenor of seven years , maturing on November 3, 2025.

Fixed principal payments equal to 0.25 % of the initial principal amount are required to be paid quarterly.

Interest is paid on the term loan periodically at a rate equal to 4.75 % plus LIBOR ( 0 % floor).

BCP II paid scheduled principal payments on this term loan of $ 1.7 million for the three months ended March 31, 2022 and 2021.

Additionally, during the three months ended March 31, 2022, BCP II voluntarily repurchased $ 9.9 million of the outstanding term on the open market.

Similar open market repurchases totaling $ 4.7 million were made during the three months ended March 31, 2021.

In addition, BCP II entered into a revolving credit facility in an initial aggregate principal amount of $ 50.0 million with a tenor of five years , maturing on November 3, 2023.

On January 16, 2020, BCP II entered into an amendment to the revolving credit agreement that increased the revolving commitment in an aggregate principal amount of $ 10.0 million, thereby increasing the aggregate revolving credit commitments of all lenders to $ 60.0 million.

Interest is paid on the revolver periodically at a rate equal to LIBOR plus the applicable margin of 4.50 % subject to change based on our consolidated total leverage ratio.

Any unpaid interest and principal are due at maturity.

BCP II also pays quarterly commitment fees of 0.50 % on the unused portion of the commitment.

As of March 31, 2022 and December 31, 2021, there were no outstanding letters of credit under the revolving credit facility.

2019 Credit Facility - BCP PHP

On September 18, 2019, BCP PHP, LLC (“BCP PHP”), a wholly owned subsidiary of BCP and the owner of a 26.67 % interest in the Permian Highway Pipeline (“PHP”), entered into a credit agreement with its lenders for a term facility with an initial term commitment of $ 483.0 million and a conversion date term commitment of $ 30.2 million and a letter of credit facility up to $ 32.4 million.

The maturity of the associated debt is due March 3, 2025 in accordance with the credit agreement.

During the three months ended March 31, 2022 and 2021, BCP PHP paid its principal payments on this term loan totaling $ 11.6 million and nil , respectively.

Fixed principal payments are required to be paid quarterly commencing with the first full quarter ending after the term conversion date, which was June 30, 2021.

Interest is paid on the outstanding borrowings monthly at a rate equal to 1.625 % plus adjusted LIBOR (subject to a 1 % floor) for four years after the closing date and at a rate equal to 1.875 % plus adjusted LIBOR (subject to a 1 % floor) thereafter.

BCP PHP must also pay quarterly commitment fees of 35 % of the applicable margin then in effect on the undrawn portion of the available commitments.

As of March 31, 2022 and 2021, there were no outstanding letters of credit.

Our debt agreements contain various covenants or restriction provisions that, amongst other things limit or restrict the applicable subsidiary’s ability to incur certain liens on assets, property or revenue, engage in certain mergers, dissolutions, investments or acquisitions, incur indebtedness or guarantee debt, make certain dispositions, and enter into certain transactions with subsidiaries or affiliates that exceed a specified threshold.

These agreements also contain defined financial covenants, including a debt service coverage ratio.

As of March 31, 2022 and December 31, 2021, each applicable subsidiary was in compliance with all loan covenants.

The fair value of the Company and its subsidiaries’ consolidated debt as of March 31, 2022 and December 31, 2021 was $ 2.98 billion and $ 2.34 billion, respectively.

The carrying value of that debt was $ 2.98 billion and $ 2.35 billion, as of March 31, 2022 and December 31, 2021, respectively.

All of the debt, except the Corporate Facility, is non-recourse to the Company and its assets, except its respective obligor (and associated subsidiaries) BCP I, BCP II and BCP PHP, as the case may be.

The following table summarizes the Company’s debt obligations as of March 31, 2022 and December 31, 2021:

June 2030 Senior Notes

On June 8, 2022, the Partnership completed a private placement of $ 1.00 billion aggregate principal amount of its 5.875 % Sustainability-Linked Senior Notes due 2030 (the “Notes”), which are fully and unconditionally guaranteed by the Company.

The Notes were issued at 99.588 % of their face amount and will mature on June 15, 2030.

Interest accrues from June 8, 2022 and is payable semi-annually on June 15 and December 15 of each year, commencing December 15, 2022.

The aggregate fees, expenses, and original issue discount paid to obtain the notes totaled $ 21.6 million and were capitalized as debt issuance cost and included in the Condensed Consolidated Balance Sheets as a direct deduction to the Notes as the Notes were transferred to third-party investors that pay the stated principal amount without deduction for the initial purchasers’ discount.

On or after June 15, 2027, the interest rate accruing on the Notes will be increased by an additional 0.250 % per annum unless the Partnership satisfies, and an independent external verifier confirms satisfaction of the Sustainability Performance Targets (“SPT”) for the three key performance indicators outlined in the Sustainability-Linked Financing Framework published by the Company on May 16, 2022:

1) Scope 1 and Scope 2 greenhouse gas emissions intensity, 2) Scope 1 and Scope 2 methane gas emissions intensity and 3) female representation in corporate officer positions.

The interest rate accruing on the Notes will be increased by an additional 0.083 % per annum for each SPT which has not been satisfied and externally verified.

The Partnership may redeem some or all of the notes at any time or from time to time prior to maturity based on terms prescribed in the Notes.

As of June 30, 2022, unamortized debt issuance costs associated with the Notes were $ 19.3 million.

Revolving Credit Facility

On June 8, 2022, the Partnership entered into a revolving credit agreement (the “Revolving Credit Agreement”) among Bank of America, N.A., as administrative agent (“Bank of America”), and the banks and other financial institutions party thereto, as lenders.

The Revolving Credit Agreement provides for a $ 1.25 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”).

The Partnership may prepay borrowings under the Revolving Credit Facility at any time without premium or penalty (other than customary SOFR breakage costs), subject to certain notice requirements.

All borrowings under the Revolving Credit Facility mature on June 8, 2027.

The obligations under the Revolving Credit Agreement are fully and unconditionally guaranteed by the Company.

The Revolving Credit Agreement provides for borrowings of either, at the Partnership’s option, base rate loans or term SOFR loans.

Base rate loans bear interest at a rate per annum equal to the greatest of (a) the prime rate as announced from time to time by Bank of America, (b) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, plus 1/2 of 1.00% and (c) the adjusted term SOFR rate for an interest period of one month plus 1.00 %, plus a margin that ranges between 0.25 % and 1.00 %, depending on the credit rating of the Partnership.

SOFR loans bear interest at a rate per annum equal to the term SOFR rate for such interest periods plus 0.10 %, plus a margin that ranges between 1.25 % and 2.00 %, depending on the credit rating of the Partnership.

In obtaining the Revolving Credit Agreement, the Partnership incurred fees and expenses totaling $ 7.8 million, which was capitalized and included in the Condensed Consolidated Balance Sheets as “Prepaid and other current assets” and “Deferred charges and other assets.

In addition, the Partnership is required to pay to each lender a commitment fee on the daily unfunded amount of such lender’s revolving commitment, which accrues at a rate that ranges between 0.15 % and 0.35 % depending on the credit rating of the Partnership.

There were no outstanding borrowings under the Revolving Credit Facility as of June 30, 2022.

Term Loan Credit Facility

On June 8, 2022, concurrently with the closing of the Revolving Credit Facility , the Partnership entered into a term loan credit agreement (the “TLA”) among PNC Bank, National Association, as administrative agent (“PNC Bank”), and the banks and other financial institutions party thereto, as lenders.

The TLA provides for a $ 2.00 billion senior unsecured term loan credit facility (the “Term Loan Credit Facility”).

The TLA matures on June 8, 2025.

The obligations under the TLA are fully and unconditionally guaranteed by the Company.

The TLA provides for borrowings of either, at the Partnership’s option, base rate loans or term SOFR loans.

Base rate loans bear interest at a rate per annum equal to the greatest of (a) the prime rate as announced from time to time by PNC Bank, (b) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, plus 1/2 of 1.00% and (c) the adjusted term SOFR rate for an interest period of one month plus 1.00 %, plus a margin that ranges between 0.25 % and 1.0 %, depending on the credit rating of the Partnership.

SOFR loans bear interest at a rate per annum equal to the term SOFR rate for such interest periods plus 0.10 %, that if the plus a margin that ranges between 1.25 % and 2.0 %, depending on the credit rating of the Partnership.

In obtaining the TLA, the Partnership incurred fee and expenses totaled $ 7.6 million, which was capitalized as debt issuance cost and included in the Condensed Consolidated Balance Sheets as direct deduction to the Term Loan Credit Facility .

Both the Revolving Credit Agreement and the TLA contain a “Sustainability Adjustments” feature that could result in a 0.05 % increase or reduction to the effective interest rate if the Company fails to meet certain sustainability targets after 2022.

“Sustainability Rate Adjustment” means, with respect to any KPI Metrics Report, for any period between Sustainability Pricing Adjustment Dates, (a) positive 0.05 %, if neither of the Sustainability Performance Targets as set forth in the KPI Metrics Report have been satisfied for the relevant calendar year, (b) 0.00 % if only one of the Sustainability Performance Targets as set forth in the KPI Metrics Report has been satisfied for the relevant calendar year and (c) negative 0.05 % if both of the Sustainability Performance Targets as set forth in the KPI Metrics Report have been satisfied for the relevant calendar year.

“Sustainability Performance Targets” in the Revolving Credit Agreement and TLA mean, for any calendar year, with respect to (a) the Female Representation KPI, the target percentage of female representation in corporate officer positions for such calendar year and (b) the Methane Emissions KPI, the percentage reduction in methane gas emissions intensity relative to the baseline year for such calendar year;

provided that, in each case, if the Partnership subsequently issues a sustainability-linked debt instrument linked to the same KPI Metric and with an observation date for such calendar year, but with a higher percentage of representation or reduction, as the case may be, the relevant Sustainability Performance Target shall be automatically adjusted upward to equal the percentage of representation or reduction, as applicable, required by such subsequent sustainability-linked debt instrument.

Both the Revolving Credit Agreement and the TLA contain customary covenants and restrictive provisions which may, among other things, limit Partnership’s ability to create liens, incur additional indebtedness, make restricted payments, or liquidate, dissolve, consolidate with, or merge into or with any other person.

As of June 30, 2022, the Partnership is in compliance with all customary and financial covenants.

Repayment of Existing Credit Facilities

In June 2022, the Company used the net proceeds from the Notes, together with cash on hand and proceeds from the term loan credit facility, to repay all outstanding borrowings under its existing credit facilities and to pay certain related fees and

In conjunction with the extinguishment of existing outstanding borrowings, the Company recognized a loss on extinguishment of debt of approximately $ 28.0 million.

In addition, the unamortized debt issuance costs related to the existing outstanding borrowings were fully amortized and included in the loss on debt extinguishment calculation for the three and six months ended June 30, 2022.

The fair value of the term loan credit facility approximates fair value and is not publicly traded.

The fair value of the Company and its subsidiaries’ consolidated debt as of June 30, 2022 and December 31, 2021 was $ 2.95 billion and $ 2.34 billion, respectively.

The following table summarizes the Company’s debt obligations as of June 30, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

(In thousands)

$ 1.25 billion term loan (BCP I)

$ 690 million term loan (BCP II)

$ 513 million term loan (BCP PHP)

$ 800 million revolving line of credit (Partnership)

$ 125 million revolving line of credit (BCP I)

$ 2.0 billion unsecured term loan

$ 2,000,000 $ —

$ 1.0 billion 2030 senior unsecured notes

$ 1.25 billion term loan

$ 690 million term loan

$ 513 million term loan

$ 125 million revolving line of credit

Total Long-term debt 3,000,000 2,346,187

Deferred financing costs, net

Debt issuance costs, net (1)

( 28,730 ) ( 38,485 )

2,971,270 2,307,702

Current portion, net — ( 54,280 )

Long-term portion of debt and finance lease obligations, net $ 2,971,270 $ 2,253,422

(1) Excluded unamortized debt issuance cost related to the Revolving Credit Facility.

Unamortized debt issuance cost associated with the Revolving Credit Facility was $ 7.7 million and $ 2.2 million as of June 30, 2022 and December 31, 2021, respectively, and were included in the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets.

The table below presents the components of the Company’s financing costs, net of capitalized interest:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

(In thousands)

Capitalized interest $ 197 $ 275 $ 301 $ 486

Deferred financing costs

Debt issuance costs 3,149 3,332 6,538 6,637

Interest expense 22,001 29,000 45,282 50,794

Total financing costs, net of capitalized interest $ 25,347 $ 32,607 $ 52,121 $ 57,917

As of March 31, 2022 and December 31, 2021, deferred financing costs associated with the three term loans were $ 35.4 million and $ 38.5 million, respectively.

Deferred financing costs associated with the revolvers were $ 1.9 million as of March 31, 2022 and $ 2.2 million as of December 31, 2021.

The amortization of the deferred financing costs was charged to interest expense for the periods presented.

The amount of deferred financing costs included in interest expense for the three months ended March 31, 2022 and 2021 was $ 3.4 million and $ 3.3 million, respectively.

As of June 30, 2022 and December 31, 2021, unamortized debt issuance costs associated with the Notes and the Term Loan Credit Facility were $ 28.7 million and $ 38.5 million, respectively.

Debt issuance costs associated with the new and existing revolving credit facilities were $ 7.7 million and $ 2.2 million as of June 30, 2022 and December 31, 2021, respectively.

As of June 30, 2022, the unamortized debt issuance costs associated with the new and existing revolving credit facilities were included in the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets as there were no borrowings on the new or existing revolving credit facilities.

As of December 31, 2021, the current and non-current portion of the unamortized debt issuance costs were included in the “Other non-current assets” and “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets.

The amortization of the debt issuance costs was charged to interest expense for the periods presented.

The amount of debt issuance costs included in interest expense was $ 3.1 million and $ 3.3 million for the three months ended June 30, 2022 and 2021, respectively, and $ 6.5 million and $ 6.6 million for the six months ended June 30, 2022 and 2021, respectively.

ACCRUED EXPENSES

The following table provides detail of the Company’s accrued expenses at March 31, 2022 and December 31, 2021:

The following table provides detail of the Company’s accrued expenses at June 30, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

(In thousands)

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Accrued interest expenses 3,787 —

Accrued expense due to related party

Accrued other expenses 13,741 7,872

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These accruals are adjusted as additional information becomes available or circumstances change.

As of March 31, 2022 and December 31, 2021, there were no accruals for loss contingencies.

As of June 30, 2022 and December 31, 2021, there were no accruals for loss contingencies.

The Company is a party to various legal actions arising in the ordinary course of its businesses.

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Given the counterparties’ sufficient creditworthiness and the valid claims that we hold, no allowance has currently been established for these items as we have legally enforceable agreements with these parties.

Environmental Matters

As an owner of infrastructure assets with rights to surface lands, the Company is subject to various local and federal laws and regulations relating to discharge of materials into, and protection of, the environment.

These laws and regulations may, among other things, impose liability on the Company for the cost of pollution clean-up resulting from operations and subject the Company to liability for pollution damages.

The Company is not aware of any environmental claims existing as of June 30, 2022, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity.

Contingent Liabilities

As part of the acquisition of Permian Gas on June 11, 2019, consideration included a contingent liability arrangement with 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.

Permian Gas 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 arrangement defines the incentive rate per Mcf for each qualifying year and the total monies paid under this arrangement are capped at $ 60.5 million.

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Based on current forecasts and discussions with PDC, management revalued this contingent liability with updated assumptions at each reporting period.

As of March 31, 2022 and December 31, 2021, the estimated fair value of the contingent consideration liability was $ 0.8 million and $ 0.8 million, respectively.

As part of the Transaction, the Company assumed contingent liabilities of $ 4.5 million related to earn-out consideration of up to 1,250,000 shares of Class A Common Stock as follows:

The Company did not expect PDC’s actual annual Mcf volume amounts to exceed forecasted amounts as of June 30, 2022;

therefore, the estimated fair value of the contingent consideration liability was nil as of June 30, 2022.

The estimated fair value of the contingent consideration liability related to this acquisition was $ 0.8 million as of December 31, 2021.

The Transaction

As part of the Transaction, the Company assumed contingent liabilities of $ 4.5 million related to earn-out a consideration of up to 2,500,000 shares of Class A Common Stock as follows:

• 1,250,000 shares if the per share closing price of the Class A Common Stock as reported by Nasdaq during any 30 -trading-day period ending prior to November 9, 2023 is equal to or greater than $ 140.00 for any 20 trading days within such 30 -trading-day period.

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Immediately subsequent to the Closing, the Company evaluated the earn-out consideration classification in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

The Company determined the earn-out consideration to be classified as an equity based on the settlement provision.

Environmental Matters

As an owner of infrastructure assets and with rights to surface lands, the Company is subject to various local and federal laws and regulations relating to discharge of materials into, and protection of, the environment.

The Company is not aware of any environmental claims existing as of March 31, 2022, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity.

The Company determined the earn-out consideration to be classified as equity based on the settlement provision.

EQUITY METHOD INVESTMENTS

As of March 31, 2022, the Company owned investments in the following long-haul pipeline entities in the Permian Basin.

As of June 30, 2022, the Company owned investments in the following long-haul pipeline entities in the Permian Basin.

These investments were accounted for using the equity method of accounting.

For each equity method investment (“EMIs” or “EMI”) pipeline entity, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the EMI pipeline.

For each equity method investment (“EMI”) pipeline entity, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the EMI pipeline.

The table below presents the ownership percentages and investment balances held by the Company for each entity:

Ownership June 30, 2022 December 31, 2021

(In thousands)

Gulf Coast Express Pipeline LLC

Permian Highway Pipeline LLC (1)

53.3 % $ 1,416,318 $ 626,477

Breviloba, LLC (Shin Oak) 33.0 % 465,444 —

(1) Ownership for Permian Highway Pipeline LLC was 53.3 % and 26.7 % as of March 31, 2022 and December 31, 2021, respectively.

Additionally, as of March 31, 2022, the Company owned 15.0 % of Epic Crude Holdings, LP (“EPIC”).

Gulf Coast Express Pipeline LLC 16.0 % 460,549 —

$ 2,342,311 $ 626,477

(1) Ownership for Permian Highway Pipeline LLC (“PHP”) was 53.3 % and 26.7 % as of June 30, 2022 and December 31, 2021, respectively.

Additionally, as of June 30, 2022, the Company owned 15.0 % of Epic Crude Holdings, LP (“EPIC”).

However, no dollar value was assigned through the purchase price allocation as adjustment was made to eliminate equity in losses of EPIC.

No additional contribution was made to EPIC and no distribution or equity income was received from EPIC during the three months ended March 31, 2022.

As of March 31, 2022, the unamortized basis differences included in the EMI pipelines balances were $ 418.3 million.

No additional contribution was made to EPIC and no distribution or equity income was received from EPIC during the three and six months ended June 30, 2022.

As of June 30, 2022, the unamortized basis differences included in the EMI pipelines balances were $ 414.3 million.

There was no unamortized basis difference as of December 31, 2021.

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Unamortized basis differences will be amortized into equity income over the useful lives of the underlying pipeline assets.

There was capitalized interest of $ 12.3 million and $ 12.8 million as of March 31, 2022 and December 31, 2021, respectively.

There was capitalized interest of $ 12.2 million and $ 12.8 million as of June 30, 2022 and December 31, 2021, respectively.

Capitalized interest is amortized on a straight-line basis into equity income.

The following table presents the activity in the Company’s EMIs for the three months ended March 31, 2022:

Gulf Coast Express Pipeline LLC

Permian Highway Pipeline LLC

Breviloba, LLC

The following table presents the activity in the Company’s EMIs for the six months ended June 30, 2022:

Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC Total (2)

(In thousands)

Balance at December 31, 2021 $ 626,477 $ — $ — $ 626,477

Acquisitions 815,000 470,000 470,000 1,755,000

Contributions 2,675 — — 2,675

Distributions ( 79,508 ) ( 16,868 ) ( 21,168 ) ( 117,544 )

Equity income, net (1)

Balance at March 31, 2022

(1) Net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $ 0.8 million from Gulf Cost Express, $ 1.3 million from Permian Highway Pipeline LLC and $ 0.1 million from Breviloba.

(2) The EMIs acquired in the Transaction are included in the results from February 22, 2022 to March 31, 2022, and this is also the case for the additional 26.67 % of PHP that was acquired in the Transaction.

51,674 12,312 11,717 75,703

Balance at June 30, 2022 $ 1,416,318 $ 465,444 $ 460,549 $ 2,342,311

(1) For the six months ended June 30, 2022, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $ 3.3 million from Permian Highway Pipeline LLC, $ 0.3 million from Breviloba, LLC and $ 2.7 million from Gulf Coast Express Pipeline, LLC.

(2) The EMIs acquired in the Transaction are included in the results from February 22, 2022 to June 30, 2022, and this is also the case for the additional 26.67 % of PHP that was acquired in the Transaction.

The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022.

Refer to Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements of this Form 10-Q, for further information on the Company’s basis of presentation .

Summarized Financial Information

The following table represents selected income statement data for the Company’s EMI pipelines (on a 100 percent basis) for the three months ended March 31, 2022.

Three Months Ended March 31,

Gulf Coast Express Pipeline LLC

Permian Highway Pipeline LLC

The following tables represent selected statement of operations data for the Company’s EMI pipelines (on a 100 percent basis) for the three and six months ended June 30, 2022 and 2021.

Three Months Ended June 30,

Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC Permian Highway Pipeline LLC (1)

Breviloba, LLC (1)

Gulf Coast Express Pipeline LLC (1)

Permian Highway Pipeline LLC (1)

(In thousands)

Revenues $ 98,808 $ 50,091 $ 90,769 $ 99,366 $ 47,447 $ 90,703

Operating income 61,294 25,359 64,816 62,444 28,002 60,766

Net income 61,307 25,284 64,461 62,329 27,645 60,551

Six Months Ended June 30,

Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC Permian Highway Pipeline LLC (1)

Breviloba, LLC (1)

Gulf Coast Express Pipeline LLC (1)

(In thousands)

Revenues $ 196,664 $ 98,612 180,742 $ 197,214 $ 81,976 $ 179,072

Operating income 120,770 51,672 128,259 105,024 45,302 120,874

(1) For the three months ended March 31, 2021, the Company only had equity interest in Permian Highway Pipeline LLC.

Net income 120,520 51,651 127,990 104,909 45,004 120,319

(1) For the three and six months ended June 30, 2021, the Company only had equity interest in Permian Highway Pipeline LLC.

EQUITY AND WARRANTS

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Please refer to the “Transaction” discussed above.

Please refer to “The Transaction” above.

The redemption option of the Common Unit is not legally detachable or separately exercisable from the instrument and is non-transferable, and the Common Unit is redeemable at the option of the holder.

Therefore, the Common Unit is accounted for as redeemable noncontrolling interest and classified as temporary equity on the Company’s Condensed Consolidated Balance Sheet.

During the three months ended March 31, 2022, 2,740,000 common units were redeemed on a one -for-one basis for shares of Class A Common Stock and a corresponding number of shares of Class C Common Stock were cancelled.

There were 47,260,000 Common Units and an equal number of Class C Common Stock issued and outstanding as of March 31, 2022.

The Common Units fair value was approximately $ 3.19 billion as of March 31, 2022.

During the first half of 2022, 5,550,000 common units were redeemed on a one -for-one basis for shares of Class A Common Stock and a corresponding number of shares of Class C Common Stock were cancelled.

There were 94,450,000 Common Units and an equal number of Class C Common Stock issued and outstanding as of June 30, 2022.

The Common Units fair value was approximately $ 3.25 billion as of June 30, 2022.

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

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Refer to Note 11—Series A Cumulative Redeemable Preferred Units for further discussion.

In July 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units.

See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

Public Warrants

As of March 31, 2022 there were 12,577,350 Public Warrants (as defined below) outstanding.

Each whole public warrant entitles the holder to purchase one twentieth of a share of Class A Common Stock at a price of $ 230.00 per share (the “Public Warrants”).

As of June 30, 2022, there were 12,577,350 Public Warrants (as defined below) outstanding.

Each whole public warrant entitles the holder to purchase one tenth of a share of Class A Common Stock at a price of $ 115.00 per share (the “Public Warrants”).

The Public Warrants will expire on November 9, 2023 or upon redemption or liquidation.

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Private Placement Warrants

As of March 31, 2022, there were 6,364,281 Private Placement Warrants (as defined below) outstanding, of which Apache holds 3,182,140 .

As of June 30, 2022, there were 6,364,281 Private Placement Warrants (as defined below) outstanding, of which Apache holds 3,182,140 .

The private placement warrants will expire on November 9, 2023 and are identical to the Public Warrants discussed above, except (i) they will not be redeemable by the Company so long as they are held by the initial holders or their respective permitted transferees and (ii) they may be exercised by the holders on a cashless basis (the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”).

The Company recorded a fair value of $ 0.1 million for the Public Warrants and a fair value of $ 0.1 million for the Private Warrants as of March 31, 2022 on the Condensed Consolidated Balance Sheet in other non-current liabilities.

The Company recorded a fair value of $ 0.1 million for the Public Warrants and a fair value of $ 0.1 million for the Private Warrants as of June 30, 2022 on the Condensed Consolidated Balance Sheet in other non-current liabilities.

Refer to Note 15—Fair Value Measurement in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding valuation of the Warrants.

On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with selected parties including Blackstone, I Squared Capital, Management and Apache (“Reinvestment Holder”).

The Reinvestment Agreement obligates each Reinvestment Holder to reinvest in shares of Class A Common Stock at least 20 % of all distributions on Common Units or dividends on shares of Class A Common Stock held by such Reinvestment Holder.

On February 22, 2022, the Audit Committee and subsequently the Board approved that for the calendar year 2022, 100 % of all distributions or dividends received by the Reinvestment Holders would be reinvested in newly issued Class A shares.

On April 4, 2022, the Company filed a Registration Statement on Form S-3 related to the Reinvestment Agreement and the establishment of the Dividend and Distribution Reinvestment Plan (the “Plan”) for all other holders.

Refer to Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional details.

On April 20, 2022, the Company’s Board of Directors (the “Board”) declared a cash dividend of $ 1.50 per share on the Company’s Class A Common Stock, which will be payable to stockholders on May 17, 2022.

The Company, through its ownership of the general partner of the Partnership, also declared a distribution of $ 1.50 per Common Unit from the Partnership to the holders of Common Units.

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.” The Company anticipates 7.8 million of the Class A and Class C shares will receive a cash dividend with the balance receiving additional Class A shares under the Reinvestment Agreement (defined above).

On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with certain stockholders including BCP Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC, APA Corporation Apache Midstream LLC, and certain individuals (each, a “Reinvestment Holder”).

Under the Reinvestment Agreement, each Reinvestment Holder is obligated to reinvest at least 20 % of all distributions on Common Units or dividends on shares of Class A Common Stock in the Company’s Class A Common Stock.

Additionally, the Audit Committee and subsequently the Company’s Board of Directors (the “Board”) resolved that for the calendar year 2022, 100 % of all distributions or dividends received by each Reinvestment Holder would be reinvested in newly issued shares of Class A Common Stock.

On May 17, 2022, the Company made cash dividend payments of $ 11.7 million to holders of Class A Common Stock and Common Units and $ 87.7 million was reinvested in shares of Class A Common Stock by each Reinvestment Holder.

On July 20, 2022, the Board declared a cash dividend of $ 0.75 per share on the Company’s Class A Common Stock and a distribution of $ 0.75 per Common Unit from the Partnership to the holders of Common Units.

Dividends are payable on August 17, 2022.

Certain holders of Class A Common Stock and Class C Common Stock will receive a cash dividend with the balance receiving additional shares of Class A Common Stock under the Reinvestment Agreement.

On May 19, 2022, the Company announced that its Board approved and declared a two -for-one stock split with respect to its Class A Common Stock and Class C Common Stock, in the form of a stock dividend (the “Stock Split”).

The Stock Split was accomplished by distributing one additional share of Class A Common Stock for each share of Class A Common Stock outstanding and one additional share of Class C Common Stock for each share of Class C Common Stock outstanding.

The additional shares of Common Stock were issued on June 8, 2022 to holders of record at the close of business on May 31, 2022.

All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated in this Form 10-Q to reflect the Stock Split.

SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS

Prior to the merger close date, the Partnership had 625,000 Preferred Units issued and outstanding.

Prior to the Closing Date of the Transaction, the Partnership had 625,000 Preferred Units issued and outstanding.

Immediately prior to the Closing, on February 22, 2022, the Partnership redeemed for cash, 100,000 Preferred Units in an amount equal to approximately $ 120.1 million.

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The Company values the liability as of each reporting date and records the change in valuation in the “Other income (expenses)” in the Condensed Consolidated Statements of Operations.

The Partnership consummated the first of such redemptions redeeming 50,000 units along with 2,856 PIK units on March 28, 2022 for an aggregate amount equal to $ 60.7 million.

For the remaining 100,000 Preferred Units that contain the mandatory redemption feature, the Company recorded $ 67.2 million and $ 68.9 million in current and noncurrent liabilities, respectively, as of March 31, 2022.

These 100,000 Preferred Units must be redeemed in 50,000 unit increments by February 22, 2023 and August 22, 2023, respectively.

The Partnership LPA also provides the Partnership with an option to redeem Preferred Units early so long as at least 25,000 Preferred Units are redeemed in each redemption, without any dollar-value threshold.

During the first half of 2022, the Partnership declared and paid mandatorily redeemable Preferred Units holders distribution of $ 1.9 million and the Partnership redeemed 125,000 units along with 7,138 PIK units for an aggregate amount totaling $ 152.6 million.

Gains of $ 5.1 million and $ 9.6 million were recorded for the redemption for the three and six months ended June 30, 2022, respectively.

For the remaining 25,000 Preferred Units that contain the mandatory redemption feature, the Company recorded $ 30.7 million as liability in “Other Liabilities” of the Condensed Consolidated Balance Sheet as of June 30, 2022.

These remaining units were subsequently redeemed in July 2022.

See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

Redeemable Noncontrolling Interest Preferred Units

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The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price.

Activities related to Preferred Units for the three months ended March 31, 2022 are as follows:

Units Outstanding

Activities related to Preferred Units for the six months ended June 30, 2022 are as follows:

Units Outstanding Amount (3)

(In thousands, except for unit data)

Redeemable noncontrolling interest — Preferred Units, immediately upon Closing Date of Transaction (1)

396,417 $ 462,717

Cash distribution paid to Preferred Unit limited partners — ( 6,937 )

Distribution payable to Preferred Unit limited partners ( 6,937 )

Allocation of net income — 17,420

Redeemable noncontrolling interest — Preferred Units, as of March 31, 2022

Accreted redemption value adjustment — 97,075

Redeemable noncontrolling interest — Preferred Units, as of June 30, 2022 396,417 563,338

Embedded derivative liability (2)

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Refer to Note 15—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period.

(3) As of March 31, 2022, the Redemption Price would have been based on an 11.1 % percent internal rate of return, which would equate to a redemption value of $ 700.0 million.

(3) As of June 30, 2022, the Redemption Price would have been based on an 11.08 % internal rate of return, which would equate to a redemption value of $ 700.0 million.

On July 8, 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units.

See Note 18 —Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

SHARE-BASED COMPENSATION

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Class A-3 units would have vested upon a change in control, if the participants were employed at the time of the event, or upon termination of the participant by the Company.

Immediately upon Closing, all outstanding Class A-1 and Class A-2 units were cancelled and exchanged for 2,650,000 shares (the “Class A Shares”) of the Company’s Class A Common Stock.

These Class A Shares are issued and outstanding as they were distributed pro rata to all holders of Class A-1 and Class A-2 units by the Common Unit limited partners from the 50,000,000 common units they received upon the Closing.

Before distributing these Common Units, the Common Unit limited partners redeemed them for Class A Common Stock.

Immediately upon Closing, all outstanding Class A-1 and Class A-2 units were cancelled and exchanged for 5,300,000 shares (the “Class A Shares”), post two -for-one stock split, of the Company’s Class A Common Stock.

The Common Unit limited partners redeemed Common Units needed for the Class A shares distribution upon the Closing.

The Class A Shares are held in escrow and will vest over three to four years .

Similarly, the Class A-3 units were exchanged for approximately 163,000 Class C Common Stock and Common Units (the “Class C Shares”) and will vest over four years.

The Company also issued approximately 38,000 replacement restricted share awards (“Replacement Awards”) to new employees that transitioned from ALTM as part of the merger.

Similarly, the Class A-3 units were exchanged for approximately 326,000 , post two-for-one stock split, Class C Common Stock and Common Units (the “Class C Shares”) and will vest over four years .

The Company also issued approximately 76,000 , post two -for-one stock split, replacement restricted share awards (“Replacement Awards”) to new employees that transitioned from ALTM as part of the merger.

These changes for all three share types established a new measurement date.

The Class A Shares, Class C Shares and Replacement Awards were valued based on the Company’s publicly quoted price on the measurement date, which was the Closing Date of the Transaction.

With respect to these shares, the Company recorded compensation expenses of $ 6.1 million for the three months ended March 31, 2022, based on a straight line amortization of the associated awards’ fair value over the respective vesting life of the shares.

With respect to the incentive units, no compensation expenses were recorded for the three months ended March 31, 2021, as the incentive units were considered non-vested prior to their cancellation and exchange for Class A or Class C Common Stock.

The Class A Shares, Class C Shares and Replacement Awards were valued based on the Company’s publicly quoted stock price on the measurement date, which was the Closing Date of the Transaction.

With respect to these shares, the Company recorded compensation expenses of $ 12.2 million and $ 18.3 million for the three and six months ended June 30, 2022, respectively, based on a straight line amortization of the associated awards’ fair value over the respective vesting life of the shares.

With respect to the incentive units, no compensation expenses were recorded for the three and six months ended June 30, 2021, as the incentive units were considered non-vested prior to their cancellation and exchange for Class A or Class C Common Stock.

The Company is subject to U.S.

federal income tax and the Texas margin tax.

The Company’s income tax provision for the three months ended March 31, 2022 consists of following:

Three Months Ended March 31,

Income tax expense included in the Condensed Consolidated Financial Statements in this Form 10-Q is as follows:

Three Months Ended June 30, Six Months Ended June 30,

(In thousands)

Current tax expense:

State and local

Total current tax expense

Deferred tax expense:

State and Local

Total deferred tax expense

Total income tax expense

The Company records income taxes using an estimated annual effective tax rate and recognizes specific events discretely as they occur.

The following table presents reconciliation of the U.S.

statutory income tax rate to the estimated annual effective tax rate:

Three Months Ended

March 31, 2022

statutory rate (1)

Tax attributable to Noncontrolling interest - Common Units limited partners

Tax attributable to Noncontrolling interest - Preferred Units limited partners

State tax rate

Valuation allowance

Effective rate

(1) Prior to the Closing on February 22, 2022, the Company was organized as limited partnership and was not subject to the U.S.

federal income tax for the three months ended March 31, 2021.

For state purposes, the Company records deferred tax assets and liabilities based on the differences between the carrying value and tax basis of assets and liabilities recorded on the consolidated balance sheets.

The deferred tax liabilities recorded as of March 31, 2022 and December 31, 2021 relate to these differences.

For federal purposes, the Company has a deferred tax asset related to our investment in the Partnership and net operating losses.

The Company recorded a full allowance valuation on its deferred tax assets, as it has determined that more-likely-than-not that the benefit of the deferred tax assets will not be realized.

Income before income taxes $ 131,610 $ 153,675

Income tax expense $ 162 $ 838

Effective tax rate (1)

0.12 % 0.55 %

(1) Prior to the Closing on February 22, 2022, BCP, the accounting acquirer, was organized as limited partnership and was not subject to the U.S.

federal income tax for the three and six months ended June 30, 2021.

The effective tax rate for the three and six months ended June 30, 2022 was lower than the statutory rate mainly due to the impact of tax attributable to noncontrolling interests related to the Common Units and Preferred Units limited partners and valuation allowance.

Upon Closing, the Company assumed certain uncertain tax positions from ALTM.

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Reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:

(In thousands)

Balance as of January 1, 2022

(In thousands) Amount

Balance at December 31, 2021 $ —

Increase related to ALTM acquisition 5,238

Reduction related to current year activities ( 2,455 )

Balance as of March 31, 2022

Balance at June 30, 2022 $ 2,783

NET INCOME PER SHARE

The computation of basic and diluted net income (loss) per share for the periods presented in the Condensed Consolidated Financial Statements is shown in the table below.

Three Months Ended March 31,

Weighted-average shares

The computation of basic and diluted net income per share for the periods presented in the Condensed Consolidated Financial Statements is shown in the tables below.

Three Months Ended June 30,

Income Weighted-average shares (3)

Per Share Income Weighted-average shares (3)

(In thousands, except per share data)

Net income attributable to Class A common shareholders $ 6,438 39,297 $ 0.16 $ — — $ —

Net income available to participating unvested restricted Class A common shareholders (4)

( 4,184 ) — $ — — — $ —

Total net income attributable to Class A common shareholders $ 2,254 39,297 $ 0.06 $ — — $ —

Effect of dilutive securities:

Replacement Awards

Unvested Class A common shares — 32 $ — — — $ —

Diluted (1)(2) :

Net income attributable to Class A common shareholders $ 2,254 39,329 $ 0.06 $ — — $ —

Six Months Ended June 30,

Income Weighted-average shares (3)

Per Share Income Weighted-average share (3)

(In thousands, except per share data)

Net income attributable to Class A common shareholders $ 10,303 38,766 $ 0.27 $ — — $ —

Net income available to participating unvested restricted Class A common shareholders (4)

( 4,184 ) — $ — — — $ —

Total net income attributable to Class A common shareholders $ 6,119 38,766 $ 0.16 $ — — $ —

Effect of dilutive securities:

Unvested Class A common shares — 30 $ — — — $ —

Diluted (1)(2) :

Net income attributable to Class A common shareholders $ 6,119 38,796 $ 0.16 $ — — $ —

(1) The effect of an assumed exchange of the outstanding Preferred Units and outstanding public and private warrants for shares of Class A Common Stock would have been anti-dilutive for all periods presented in which the Preferred Units and public and private warrants were outstanding.

(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 all periods presented in which the Common Units were outstanding.

(3) Share amounts have been retroactively restated to reflect the Company’s two -for-one Stock Split.

Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

(4) Represents dividends paid to unvested restricted Class A common shareholders.

FAIR VALUE MEASUREMENTS

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These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity.

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

March 31, 2022

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021:

June 30, 2022

Level 1 Level 2 Level 3 Total

(In thousands)

Interest rate derivatives

Mandatorily redeemable Preferred Units $ — $ — $ 30,717 $ 30,717

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Private warrants — — 95 95

Interest rate derivatives

Total liabilities $ 126 $ — $ 31,300 $ 31,426

December 31, 2021

Level 1 Level 2 Level 3 Total

(In thousands)

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Refer to Note 16—Derivatives and Hedging Activities in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further discussion related to commodity swaps and interest rate derivatives.

The Company bifurcated and recognized the embedded derivative associated with the Preferred Units related to the exchange option provided to the Preferred Unit holders under the terms of the Amended LPA.

The valuation of the embedded derivative, (using an income approach), was based on expected future interest rates using the Black-Karasinski model, the Company’s imputed interest rate ranged from 7.32 % to 11.58 %, interest rate volatility of 39.79 %, the expected timing of periodic cash distributions, the estimated timing for the potential exercise of the exchange option of 4.2 years and anticipated dividend yields of the Preferred Units.

The Company recorded an unrealized loss of $ 2.9 million for the three months ended March 31, 2022, which was recorded as an “Unrealized loss on embedded derivative” in the Condensed Consolidated Statement of Operations.

The valuation of the embedded derivative, (using an income approach), was based on expected future interest rates using the Black-Karasinski model, the Company’s imputed interest rate of 5.88 %, interest rate volatility of 39.51 %, the expected timing of periodic cash distributions, the estimated timing for the potential exercise of the exchange option of 4.0 years and anticipated dividend yields of the Preferred Units.

The Company recorded unrealized gains of $ 91.4 million and $ 88.6 million for the three and six months ended June 30, 2022, which was recorded as an “Unrealized gain on embedded derivative” in the Condensed Consolidated Statement of Operations.

The Company has classified these recurring fair value measurements as Level 3 in the fair value hierarchy.

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These assumptions are estimated utilizing historical trends of the Company’s common stock, Public Warrants and other factors.

The Company has recorded a liability of $ 0.2 million as of March 31, 2022.

The Company has recorded a liability of $ 0.2 million as of June 30, 2022.

There was no change in fair value of the warrants since closing of the Transaction through reporting date.

The carrying amounts reported on the Condensed Consolidated Balance Sheet for the Company’s remaining financial assets and liabilities approximate fair value due to their short-term nature.

The carrying amount of the revolving credit facility approximates fair value because the interest rate is variable and reflective of market rates.

There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three months ended March 31, 2022.

The carrying amounts reported on the Condensed Consolidated Balance Sheets for the Company’s remaining financial assets and liabilities approximate fair value due to their short-term nature.

There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three and six months ended June 30, 2022 and 2021.

DERIVATIVES AND HEDGING ACTIVITIES

The Company is exposed to certain risks arising from both its business operations and economic conditions, and it enters into certain derivative contracts to manage exposure to these risks.

The Company did not elect to apply hedge accounting to these derivative contracts and recorded fair value of the derivatives on the Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

The Company did not elect to apply hedge accounting to these derivative contracts and recorded fair value of the derivatives on the Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021.

Interest Rate Risk

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Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract.

In September of 2019, BCP PHP entered into two interest rate swaps on 75.0 % of the outstanding $ 513.0 million term loan.

These instruments were effective September 30, 2019 and have a mandatory termination date on November 19, 2024.

The notional amounts of these swaps float monthly such that 75.0 % of the total outstanding term loan is covered by the notional of the two swaps over the life of the associated term facility.

These swaps result in fixed LIBOR rates ranging from 1.76 % to 1.78 % for the respective notional amounts of our debt for the LIBOR component of our interest rate and are paid in monthly installments.

In June 2022, all of BCP PHP, LLC’s (“BCP PHP”) outstanding interest rate swaps were terminated as BCP PHP’s outstanding term loan credit facility was extinguished on June 8, 2022.

Refer to Note 6 —Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements for additional information about the refinancing transactions.

The fair value or settlement value of the consolidated interest rate swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets.

Interest rate swap derivative liabilities were $ 7 thousand and $ 2.7 million as of March 31, 2022 and December 31, 2021, respectively.

Interest rate swap derivative assets were $ 9.7 million as of March 31, 2022.

BCP PHP recorded cash settlements on interest rate swap derivatives of $ 0.9 million and $ 0.6 million for the three months ended March 31, 2022 and 2021, respectively, in the “Interest Expense” of the Condensed Consolidated Statements of Operations.

In addition, BCP PHP recorded unrealized gain of $ 11.6 million and unrealized loss of $ 10.6 million for the change in fair value of the interest rate swap derivatives for the three months ended March 31, 2022 and 2021, respectively, in the “Interest Expense” of the Condensed Consolidated Statements of Operations.

Interest rate swap derivative liabilities were nil and $ 2.7 million as of June 30, 2022 and December 31, 2021, respectively.

The Company recorded cash settlements on interest rate swap derivatives of $ 12.0 million and $ 0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $ 11.3 and $ 1.5 million for the six months ended June 30, 2022 and 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations.

In addition, the Company recorded fair value adjustments of $ 2.4 million and $ 1.9 million for the change in fair value of the interest rate swap derivatives for the three months ended June 30, 2022 and 2021, respectively, and $ 14.0 million and $ 3.1 million for the six months ended June 30, 2022 and 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations.

Commodity Price Risk

Similarly, in 2020 and 2021 the Company entered into WTI crude hedges at a specific notional that provides for a fixed price for crude in the Permian Basin.

Similarly, in 2020 and 2021 BCP Raptor, LLC (“BCP I”) and BCP Raptor II, LLC (“BCP II”) had WTI crude hedges at a specific notional that provides for a fixed price for crude in the Permian Basin and Waha basis hub hedges on various notional quantities of gas that either provided for a fixed price differential of natural gas in the Permian Basin relative to the NYMEX natural gas contract or provided for a fixed price for natural gas in the Permian Basin.

All of the Company’s commodity swaps had reached maturity as of December 31, 2021.

The fair value or settlement value of the swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheet.

Commodity swap derivative liability was nil and $ 0.2 million as of March 31, 2022 and December 31, 2021, respectively.

Commodity swap derivative liability was nil and $ 0.2 million as of June 30, 2022 and December 31, 2021, respectively.

The Company recorded cash settlements on commodity swap derivatives of nil and $ 14.1 million for the three months ended June 30, 2022 and 2021, respectively, and $ 0.2 million and $ 14.8 million for the six months ended June 30, 2022 and 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations.

In addition, the Company recorded fair value adjustments of $ 1.0 million and $ 16.5 million for the change in fair value of commodity swap derivatives for the three and six months ended June 30, 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations.

No fair value adjustment recognized for the three and six months ended June 30, 2022.

Our two operating segments represent the Company’s segments for which discrete financial information is available and is utilized on a regular basis by our chief operating decision maker (“CODM”) to make key operating decisions, assess performance and allocate resources.

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• Pipeline Transportation:

The Pipeline Transportation segment consists of equity investment interests in four Permian Basin pipelines that access to various points along the Texas Gulf Coast, and our Delaware Link Pipeline that is under construction.

The Pipeline Transportation segment consists of equity investment interests in four Permian Basin pipelines that access various points along the Texas Gulf Coast, and our Delaware Link Pipeline that is under development.

The current operating pipelines transport crude oil, natural gas and NGLs to the Texas Gulf Coast.

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The Company then renamed its Gathering and Processing segment to Midstream Logistics and its Transmission segment to Pipeline Transportation.

These name changes were made to better align segment activities with the name of respective segment.

There was no change in segment composition or structure for the three months ended March 31, 2022.

The following tables present the operating results and other key financial measures for the individual operating segment as of and for the three months ended March 31, 2022 and 2021:

Midstream Logistics

Pipeline Transportation

Corporate and Other (1)

These name changes were made to better align segment activities with the name of the respective segment.

There was no change in segment composition or structure for the three and six months ended June 30, 2022.

The following tables present the reconciliation of the segment profit measure as of and for the three and six months ended June 30, 2022 and 2021:

Midstream Logistics Pipeline Transportation Corporate and Other (1)

Consolidated (2)

For the three months ended 3/31/2022

(In thousands)

Segment net income (loss) including noncontrolling interests

Interest expense (income)

For the three months ended June 30, 2022 (In thousands)

Segment net income including noncontrolling interests $ 14,563 $ 46,277 $ 70,608 $ 131,448

Interest expense 20,641 942 3,764 25,347

Income tax expense 162 — — 162

Depreciation and amortization 66,459 122 — 66,581

Contract assets amortization 448 — — 448

Proportionate EMI EBITDA — 71,340 — 71,340

Share-based compensation — — 12,174 12,174

Loss (gain) on disposal of assets 8,580 — ( 34 ) 8,546

(Gain) loss on debt extinguishment 27,983 ( 8 ) — 27,975

Integration costs 579 — 4,707 5,286

Acquisition transaction costs — — 674 674

Other one-time costs or amortization 1,239 — 1,020 2,259

Gain on redemption of mandatorily redeemable Preferred units — — 5,087 5,087

Unrealized gain on embedded derivatives — — 91,448 91,448

Equity income from unconsolidated affiliates — 47,786 — 47,786

Segment adjusted EBITDA $ 140,654 $ 70,887 $ ( 3,622 ) $ 207,919

Midstream Logistics Pipeline Transportation Corporate and Other (1)

Consolidated (2)

For the three months ended June 30, 2021 (In thousands)

Segment net income (loss) including noncontrolling interests $ ( 24,222 ) $ 11,310 $ ( 2,454 ) $ ( 15,366 )

Interest expense 27,829 4,778 — 32,607

Depreciation and amortization 57,038 128 — 57,166

Contract assets amortization 448 — — 448

Proportionate EMI EBITDA — 21,717 — 21,717

Loss on disposal of assets 422 — — 422

Gain on debt extinguishment ( 60 ) — — ( 60 )

Other one-time costs or amortization 485 13 17 515

Producer settlement 6,827 — — 6,827

Interest and other income 24 — — 24

Equity income from unconsolidated affiliates — 16,511 — 16,511

Segment adjusted EBITDA $ 68,743 $ 21,435 $ ( 2,437 ) $ 87,741

Midstream Logistics Pipeline Transportation Corporate and Other (1)

Consolidated (2)

For the six months ended June 30, 2022 (In thousands)

Segment net income including noncontrolling interests $ 23,749 $ 75,412 $ 53,676 $ 152,837

Interest expense 47,412 ( 672 ) 5,381 52,121

Income tax expense (benefit) 457 ( 39 ) 420 838

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Share-based compensation — — 18,304 18,304

Loss on disposal of assets

Loss (gain) on disposal of assets 8,690 — ( 34 ) 8,656

Loss on debt extinguishment 27,983 ( 8 ) — 27,975

Unrealized loss on derivatives

Integration costs 4,683 — 6,755 11,438

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Other one-time costs or amortization 2,157 — 1,297 3,454

Interest and other income — — — —

Gain on redemption of mandatorily redeemable Preferred units — — 9,580 9,580

Unrealized gain on embedded derivatives — — 88,562 88,562

Equity income from unconsolidated affiliates — 75,703 — 75,703

Segment adjusted EBITDA $ 243,383 $ 111,323 $ ( 5,997 ) $ 348,709

Midstream Logistics

Pipeline Transportation

Corporate and Other (1)

Midstream Logistics Pipeline Transportation Corporate and Other (1)

Consolidated (2)

For the three months ended 3/31/2021

(In thousands)

For the six months ended June 30, 2021 (In thousands)

Segment net income (loss) including noncontrolling interests $ ( 16,027 ) $ 23,739 $ ( 4,942 ) $ 2,770

Interest expense (income)

Interest expense 55,285 2,632 — 57,917

Depreciation and amortization 112,880 257 — 113,137

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Other one-time costs or amortization 874 21 ( 52 ) 843

Producer settlement 6,827 — — 6,827

Interest and other income 41 — — 41

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(2) Results do not include legacy ALTM prior to February 22, 2022.

The following tables present the revenue for individual operating segment for the three months ended March 31, 2022 and 2021:

Midstream Logistics

Pipeline Transportation

Corporate and Other (1)

For the three months ended 3/31/2022

(In thousands)

Refer to Note 1 —Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q, for further information on the Company’s basis of presentation.

Adjusted EBITDA is a non-GAAP measure;

please see Key Performance Metrics in Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q, for a definition and reconciliation to the GAAP measure.

The following tables present the revenue for individual operating segment for the three and six months ended June 30, 2022 and 2021:

Midstream Logistics Pipeline Transportation Consolidated

For the three months ended June 30, 2022 (In thousands)

Revenue $ 331,731 $ — $ 331,731

Other revenue 3,839 2 3,841

Total segment operating revenue $ 335,570 $ 2 $ 335,572

Midstream Logistics

Pipeline Transportation

Corporate and Other (1)

For the three months ended 3/31/2021

(In thousands)

Midstream Logistics Pipeline Transportation Consolidated

For the three months ended June 30, 2021 (In thousands)

Revenue $ 133,341 $ — $ 133,341

Other revenue 2,423 2 2,425

Total segment operating revenue $ 135,764 $ 2 $ 135,766

(1) Corporate and Other represents those results that:

(i) are not specifically attributable to a reportable 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.

The following table present total assets for individual operation segment as of March 31, 2022 and December 31, 2021:

Midstream Logistics Pipeline Transportation Consolidated

For the six months ended June 30, 2022 (In thousands)

Revenue $ 587,104 $ — $ 587,104

Other revenue 5,713 4 5,717

Total segment operating revenue $ 592,817 $ 4 $ 592,821

Midstream Logistics Pipeline Transportation Consolidated

For the six months ended June 30, 2021 (In thousands)

Revenue $ 280,996 $ — $ 280,996

Other revenue 2,869 4 2,873

Total segment operating revenue $ 283,865 $ 4 $ 283,869

The following table presents total assets for each operating segment as of June 30, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

(In thousands)

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Corporate and other 14,700 648

Total assets $ 5,996,348 $ 3,553,206

SUBSEQUENT EVENTS

On April 4, 2022, the Company filed a registration statement on Form S-3 with the SEC to reserve 15,000,000 shares of Class A Common Stock for issuance under the Plan, refer to Note—10 Equity and Warrants for additional information.

On April 20, 2022, the Company’s Board of Directors declared a cash dividend of $ 1.50 per share on the Company’s Class A Common Stock which will be payable to stockholders on May 17, 2022.

In July 2022, the Company redeemed the remaining 400,000 Preferred Units along with 22,845 PIK units for an aggregate redemption price of $ 492.2 million.

Following the July redemptions, there were no outstanding Preferred Units or PIK units.

On July 12, 2022, the Company filed a registration statement on Form S-3 with the SEC to register up to a maximum offering price of $ 400,000,000 of shares of Class A Common Stock, shares of preferred stock, depositary shares and warrants of the Company and debt securities of the Partnership and to register 107,580,912 shares of Class A Common Stock that may be offered and sold by the selling stockholders named in the registration statement Form S-3 filed from time to time on any exchange on which the shares of Class A Common Stock are listed.

On July 20, 2022, the Board declared a cash dividend of $ 0.75 per share on the Company’s Class A Common Stock which will be payable to stockholders on August 17, 2022.

The Company, through its ownership of the general partner of the Partnership, declared a distribution of $ 0.75 per Common Unit from the Partnership to the holders of Common Units.

Please refer to Note 10—Equity and Warrants for additional information.

On May 10, 2022, the Company’s Board of Directors amended the Company’s 2019 Omnibus Compensation Plan (as amended from time to time, the “2019 Plan”), in order to reflect the Company’s name change and certain other non-material updates.

Under the 2019 Plan, the Company is authorized to grant equity-based awards to its employees and directors.

The foregoing description of the 2019 Plan is qualified in its entirety by reference to the 2019 Plan, a copy of which is attached as Exhibit 10.5 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Please refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional information.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements