What changed in this filing

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Item 9A. Controls and Procedures

2025-03-03 compared with 2024-03-05 · 653 added, 487 removed, 1228 unchanged (48% of the section changed)

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The Company makes modifications to improve the design and effectiveness of its disclosure controls.

As disclosed in Note—3 Business Combinations in the Notes to Consolidated Financial Statements, we completed Durango Acquisition on June 24, 2024.

Durango’s total revenues since its acquisition date constituted approximately 5% of total revenues as shown on our Consolidated Statements of Operations for the year ended December 31, 2024 and Durango’s total assets constituted approximately 13% of total assets as shown on our Consolidated Balance Sheet as of December 31, 2024.

We excluded Durango’s internal control over financial reporting from the scope of management's assessment of the effectiveness of our disclosure controls and procedures for one year following the acquisition.

As part of the Company’s ongoing integration activities, the Company’s financial reporting controls and procedures are in the process of incorporating the financial information of Durango.

The Consolidated Financial Statements presented in this Annual Report on Form 10-K were prepared using certain information obtained from Durango’s separate, legacy systems.

Management’s Annual Report on Internal Control Over Financial Reporting

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OTHER INFORMATION

2024 CEO Compensation

On February 28, 2024, the Board of Directors, upon recommendation of the Compensation Committee, approved changes to the compensation of Jamie Welch, the Company’s Chief Executive Officer, in order to better align his total compensation with market.

The Board of Directors approved, effective January 1, 2024:

(i) an increase to Mr.

Welch’s annualized base salary from $676,000 to $720,000;

(ii) an increase to Mr.

Welch’s target annual bonus opportunity for 2024 from $676,000 to $880,000, which will be subject to achievement with respect to certain predefined financial, operational and individual performance goals established by the Compensation Committee;

and (iii) the grant of equity awards with an aggregate value equal to approximately $4,400,000 on the date of grant, which equity awards will be comprised 25% of restricted stock units (“RSUs”) that will vest on the third anniversary of the date of grant, subject to Mr.

Welch’s continued employment through each such vesting date, and 75% of performance stock units (“PSUs”) that will be subject to achievement of absolute total shareholder return and relative total shareholder return performance goals over a three-year performance period, subject to Mr.

Welch’s continued employment through the end of such performance period.

The foregoing description of the awards of RSUs and PSUs does not purport to be complete and is qualified in its entirety by reference to the form of award agreements governing the RSUs and PSUs, copies of which are filed herewith as Exhibits 10.14 and 10.15, respectively, to this Annual Report on Form 10-K and are incorporated by reference herein.

Departure of General Counsel

As previously announced, Todd Carpenter, General Counsel, Assistant Secretary and Chief Compliance Officer, retired from his position effective February 28, 2025.

In connection with Mr.

Carpenter’s departure, Lindsay Ellis, the Company’s Deputy General Counsel and Corporate Secretary, was appointed General Counsel and Chief Compliance Officer, effective February 26, 2025.

On February 28, 2025, the Company entered into a separation agreement and release agreement with Mr.

Carpenter (the “Separation Agreement”).

The Separation Agreement includes a one-time lump sum payment in the amount of $946,946, to be paid on the first payroll date that occurs on or after 45 days following his termination date.

The Separation Agreement further provides that Mr.

Carpenter’s outstanding and unvested equity awards previously granted under the Company’s long-term

Index to Financial Statements

incentive plan shall continue to be eligible to vest (according to their terms), including in accordance with the terms of the Consulting Agreement (as defined below).

On February 28, 2025, Mr.

Carpenter also entered into a consulting agreement with the Company (the “Consulting Agreement”) and will serve as a consultant to the Company through March 1, 2027 (the “Consulting Period”).

During the Consulting Period, Mr.

Carpenter will provide consulting services at a rate of $200,000 annually, payable in monthly installments, plus reimbursement of reasonable out-of-pocket business-related expenses.

Carpenter shall continue to be eligible to vest in his unvested equity awards, with his service through the Consulting Period counting towards the vesting and payment of such awards.

The Consulting Agreement can be terminated by either party on and after March 1, 2026.

Upon termination by the Company without “cause” any unpaid consulting fees will be paid to Mr.

Carpenter and all unvested awards will be accelerated in full.

Carpenter has also agreed to customary confidentiality restrictions and restrictive covenants within the Consulting Agreement.

Trading Arrangements

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The Company is required to adopt a code of conduct for its directors, officers, and employees.

The Board has adopted the Code of Business Conduct and Ethics (the “Code of Ethics”), which was recently revised in August 2023.

One can access the Company’s Code of Ethics on the Investor - Governance page of the Company’s website at www.kinetik.com.

Any stockholder who so requests may obtain a printed copy of the Code of Ethics without charge by submitting a request to the Company’s corporate secretary at the address on the cover of this Annual Report.

Changes in and waivers to the Code of Ethics for the Company’s directors, chief executive officer, and certain senior financial officers will be posted on the Company’s website within four business days and maintained for at least 12 months.

The Board has adopted the Code of Business Conduct (the “Code of Conduct”), which was revised in August 2023.

One can access the Company’s Code of Conduct the Investor - Governance page of the Company’s website at www.kinetik.com.

Any stockholder who so requests may obtain a printed copy of the Code of Conduct without charge by submitting a request to the Company’s corporate secretary at the address on the cover of this Annual Report.

Changes in and waivers to the Code of Conduct for the Company’s directors, chief executive officer, and certain senior financial officers will be posted on the Company’s website within four business days and maintained for at least 12 months.

Information on the Company’s website or any other website is not incorporated by reference into, and does not constitute a part of, this Annual Report.

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Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Statements of Operation s for th e Years En de d December 31, 2023 , 202 2 , a nd 2 0 2 1

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Statements of Operations for the Years Ended December 31, 202 4 , 202 3 , and 202 2

Consolidated Balance Sheets at December 31, 202 4 and 202 3

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Revenue Recognition

Property, Plant, and Equipment

Property, Plant, and Equipment, Net

Intangible Assets, Net

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(incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on February 2 8 , 2022).

4.1* Description of Securities of the Registrant

4.1 Description of Securities of the Registrant (incorporated by reference to Exhibit 4.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2023) .

4.2 – Amended and Restated Stockholders Agreement, dated October 21, 2021, by and among APA Corporation, Apache Midstream LLC, Altus Midstream Company, New BCP Raptor Holdco, LLC, Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC, and BCP Raptor Holdco, LP.

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4.7 Form of 6.625% Sustainability-Linked Senior Notes (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on December 6, 2023).

4.8 Registration Rights Agreement, dated as of June 24, 2024, by and among Kinetik Holdings Inc.

and Durango Midstream LLC (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed June 28, 2024).

10.1† – Third Amended and Restated Agreement of Limited Partnership of Altus Midstream LP, dated as of October 22, 2021 .

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10.6† – Kinetik Holdings Inc.

2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, SEC File No.

Amended and Restated 2019 Omnibus Compensation Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 23, 2024).

10.7† – Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, SEC File No.

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10.13† – Form of Restricted Stock Unit Agreement (Directors) (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, SEC File No.

– Form of Restricted Stock Unit Agreement (2024 VPs and Above) .

– Form of Performance Stock Unit Agreement (2024) .

10.14† – Form of Restricted Stock Unit Agreement (2024 VPs and Above) ( incorporated by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed on March 5, 2024).

10.15† – Form of Performance Stock Unit Agreement (2024) (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K filed on March 5, 2024) .

10.16† – Form of Restricted Stock Unit Agreement (2024 All Other Employees) (incorporated by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K filed on March 5, 2024) .

Index to Financial Statements

– Form of Restricted Stock Unit Agreement (2024 All Other Employees) .

– Form of Restricted Stock Unit Agreement (2024 Directors) .

– Form of Deferred Stock Unit Agreement (2024 Directors) .

10.17† – Form of Restricted Stock Unit Agreement (2024 Directors) (incorporated by reference to Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K filed on March 5, 2024) .

10.18† – Form of Deferred Stock Unit Agreement (2024 Directors) (incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K filed on March 5, 2024) .

10.19† – Kinetik Holdings Inc.

Executive Severance Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 5, 2024).

10.20† – Form of Participation Agreement pursuant to the Kinetik Holdings Inc.

Executive Severance Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed March 5, 2024).

10.21*** – Receivables Purchase Agreement, dated April 2, 2024, by and among Kinetik Receivables LLC, as the seller, Kinetik Holdings LP, a subsidiary of Kinetik Holdings Inc., as the servicer, PNC Bank, National Association, as administrative agent, PNC Capital Markets LLC, as structuring agent, and the purchasers party thereto (incorporated by reference to Exhibit 10 .1 to the Registrant’s Current Report on Form 8-K filed on A pril 2, 2024 ).

10.22*** – Sale and Contribution Agreement, dated April 2, 2024, by and among Kinetik Holdings LP, a subsidiary of Kinetik Holdings Inc., Kinetik Receivables LLC and the originators party thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 2, 2024 ).

10.23*** – Purchase and Sale Agreement, dated as of May 9, 2024, by and among Kinetik GCX Pipe LLC, GCX Pipeline, LLC, solely for purposes of Section 6.7, Article X and Article XI, AL GCX Holdings, LLC and solely for purposes of Section 6.8, Article X and Article XI, Kinetik Holdings LP (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on May 13, 2024).

10.24*** – Membership Interest Purchase Agreement, dated as of May 9, 2024, by and among Kinetik Holdings Inc., Kinetik Holdings LP and Durango Midstream, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 13, 2024).

– Observer Rights Agreement, dated as of June 24, 2024, by and among Kinetik Holdings Inc., Kinetik Holdings LP and Durango Midstream LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 28, 2024).

– Revolving Credit Agreement, dated June 8, 2022, by and among Kinetik Holdings LP and Bank of America, N.A., as administrative agent, and the banks and other financial institutions party thereto, as lenders (incorporated by reference to Exhibit 10.

1 of the Company's Current Report on Form 8-K filed with the Commission on June 14, 2022).

– Loan Credit Agreement, dated June 8, 2022, by and among Kinetik Holdings LP and PNC Bank, National Association, as administrative agent, and the banks and other financial institutions party thereto, as lenders (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed with the Commission on June 14, 2022).

– First Amendment to Loan Credit Agreement, dated December 6, 2023, by and among Kinetik Holdings LP, Kinetik Holdings Inc., PNC Bank, National Association, as administrative agent, and the banks and other financial institutions party thereto, as lenders (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed with the Commission on December 6, 2023).

– Insider Trading Policy adopted February 26, 2025.

21.1* – Subsidiaries of the Company.

23.1* – Consent of KPMG LLP.

23.2* – Consent of BDO USA, P.C.

relating to the financial statements of Permian Highway Pipeline LLC.

23.2* – Consent of KPMG LLP.

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Kinetik Holdings Inc.

Clawback Policy.

Clawback Policy (incorporated by reference to Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K filed on March 5, 2024).

– Permian Highway Pipeline LLC audited financial statements as of December 31, 202 4 .

– Unaudited pro forma combined financial information for the year ended December 31, 2024.

101* – The following financial statements from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL:

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*** Schedules and exhibits to this Exhibit have been omitted pursuant to Regulation S-K Item 601(b)(2).

The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

The Company agrees to furnish supplemental a copy of any omitted schedule or exhibit to the SEC upon request.

† Management contracts or compensatory plans or arrangements required pursuant to Item 15 hereof.

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Executive Vice President, Chief Accounting and Chief Administrative Officer

(Principal Financial Officer)

(Principal Financial Officer and Principal Accounting Officer)

POWER OF ATTORNEY

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/s/ John Paul Munfa Director March 3, 2025

/s/ Elizabeth Cordia Director March 5, 2024

/s/ Karen Putterman

Director March 3, 2025

/s/ Michael A.

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Director March 3, 2025

/s/ Ben Rogers Director March 5, 2024

/s/ William Ordemann Director March 3, 2025

/s/ Laura Sugg Director March 3, 2025

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/s/ Deborah Byers Director March 3, 2025

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REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

On June 24, 2024, we completed the acquisition of Durango Permian LLC and its wholly owned subsidiaries (“Durango”).

As part of the Company’s ongoing integration activities, the Company’s financial reporting controls and procedures are in the process of incorporating the financial information of Durango.

As permitted under the SEC rules, we have elected to exclude Durango’s internal control over financial reporting from management’s assessment of effectiveness of internal controls as of December 31, 2024.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.

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Executive Vice President, Chief Accounting and Chief Administrative Officer

(Principal Financial Officer)

(Principal Financial Officer and Principal Accounting Officer)

/s/ Jake Loden

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March 3, 2025

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Report of Independent Registered Public Accounting Firm

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The carrying value of property, plant, and equipment, net and intangible assets, net as of December 31, 2024, was $3.4 billion and $652.5 million, respectively.

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Index to Fin ancial Statements

We identified the evaluation of impairment indicators for long-lived assets as a critical audit matter.

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March 3, 2025

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Index to Fin ancial Statements

Report of Independent Registered Public Accounting Firm

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in equity and noncontrolling interests, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated March 3, 2025 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Durango Permian, LLC during 2024, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, Durango Permian, LLC’s internal control over financial reporting associated with approximately 13% of total assets and approximately 5% of total revenues is included in the consolidated financial statements of the Company as of and for the year ended December 31, 2024.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Durango Permian, LLC.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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March 3, 2025

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KINETIK HOLDINGS INC.

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Depreciation and amortization expenses 324,197 280,986 260,345

Loss on disposal of assets 19,402 12,611 382

Loss on disposal of assets, net 4,040 19,402 12,611

Total operating costs and expenses 1,303,696 1,097,157 1,063,001

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

(Loss) gain on debt extinguishment

Loss on debt extinguishment

( 525 ) ( 1,876 ) ( 27,975 )

Gain on sale of equity method investment 89,802 — —

Gain on embedded derivative — — 89,050

1 unchanged sentence

Equity in earnings of unconsolidated affiliates 213,191 200,015 180,956

Total other (expense) income, net

Total other income (expense), net

88,035 ( 5,711 ) 102,848

1 unchanged sentence

267,268 153,544 253,337

Income tax (benefit) expense

Income tax expense (benefit)

23,035 ( 232,908 ) 2,616

Net income including noncontrolling interest 386,452 250,721 1,482

Net income including noncontrolling interests 244,233 386,452 250,721

Net income attributable to Preferred Unit limited partners — — 115,203

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

Refer to the Annual Report basis of presentation in Note 1—Description of Business and Basis of Presentation in the Notes to Consolidated Financial Statements in this Annual Report, for further information.

Refer to Note 1—Description of Business and Basis of Presentation in the Notes to our Consolidated Financial Statements in this Annual Report for further information.

(2) Includes amounts of $ 17.2 million, $ 104.1 million, and $ 107.7 million associated with related parties for the years ended December 31, 2024, 2023, and 2022, respectively.

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(5) Share and per share amounts have been retrospectively restated to reflect the Company’s reverse stock split, which was effected June 8, 2022.

Refer to N ote 11 — Equity and Warrants in the Notes to our Consolidated Financial Statements in this Annual Report for further information .

(6) Weighted average Class A common shares have been retrospectively restated due to bonus effect of Class A common shares issued under the Reinvestment Agreement for all periods presented in which the Class A common shares were outstanding.

The accompanying notes to consolidated financial statements are an integral part of this statement.

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Index to Financial Statements

Refer to Note 11—Equity and Warrants in the Notes to our Consolidated Financial Statements in this Annual Report for further information .

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

Index to Fin ancial Statements

KINETIK HOLDINGS INC.

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111,940 215,721

Accounts receivable pledged 140,200 —

Derivative assets 2,308 7,812

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Current portion of operating lease liabilities 18,701 29,203

Current debt obligations 140,200 —

Other current liabilities 35,689 7,786

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$ 0.0001 par, 1,500,000,000 shares authorized, 97,783,034 and 94,089,038 shares issued and outstanding at December 31, 2024 and 2023, respectively

Deferred consideration 1 —

Additional paid-in capital — 192,678

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Total liabilities, noncontrolling interest, and equity $ 6,814,937 $ 6,496,873

(1) Includes amounts of $ 15.8 million and $ 17.6 million associated with related parties as of December 31, 2023 and 2022, respectively.

(1) Includes amounts of nil and $ 15.8 million associated with related parties as of December 31, 2024 and 2023, respectively.

Refer to Note 18—Related Party Transactions in the Notes to our Consolidated Financial Statements in this Annual Report for further information.

(2) Share amounts have been retrospectively restated to reflect the Company’s reverse stock split, which was effected June 8, 2022.

Refer to Note 11 — Equity and Warrants in the Notes to our Consolidated Financial Statements in this Annual Report for further information.

The accompanying notes to consolidated financial statements are an integral part of this statement.

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Index to Financial Statements

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

Index to Fin ancial Statements

KINETIK HOLDINGS INC.

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Amortization of contract costs 6,621 6,620 1,807

Contingent liabilities remeasurement — ( 839 ) ( 661 )

Contingent liabilities fair value adjustment 200 — ( 839 )

Distributions from unconsolidated affiliate 289,992 272,490 256,764

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Warrants fair value adjustment — ( 88 ) ( 133 )

Gain on sale of equity method investment ( 89,802 ) — —

Gain on redemption of mandatorily redeemable Preferred Units — — ( 9,580 )

Loss on disposal of assets 19,402 12,611 382

Loss on disposal of assets, net 4,040 19,402 12,611

Equity in earnings from unconsolidated affiliates

( 213,191 ) ( 200,015 ) ( 180,956 )

Loss (gain) on debt extinguishment 1,876 27,975 ( 4 )

Loss on debt extinguishment 525 1,876 27,975

Share-based compensation 76,536 55,983 42,780

Deferred income tax (benefit) expense

Deferred income tax expense (benefit)

19,503 ( 233,400 ) 2,094

Changes in operating assets and liabilities:

Accounts receivable ( 12,131 ) ( 8,329 ) ( 88,487 )

Accounts receivable and pledged receivable ( 7,033 ) ( 12,131 ) ( 8,329 )

Other assets 8,000 ( 5,910 ) ( 4,242 )

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Investments in unconsolidated affiliate ( 3,273 ) ( 238,803 ) ( 78,171 )

Distributions from unconsolidated affiliates

Cash proceeds from disposals 358 219 3,613

Net cash paid for acquisition of interest in unconsolidated affiliates ( 85,417 ) — —

Distributions from unconsolidated affiliate 4,059 6,679 —

Cash proceeds from sale of equity method investment 524,390 — —

Cash proceeds from disposals of assets 409 358 219

Net cash (paid for) acquired in acquisition ( 341,182 ) ( 125,000 ) 13,401

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CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of long-term debt 800,000 3,000,000 30,189

Proceeds from borrowings under A/R Facility 156,000 — —

Payments on A/R Facility ( 15,800 ) — —

Proceeds from borrowings from long-term debt — 800,000 3,000,000

Principal payments on long-term debt ( 200,000 ) ( 800,000 ) ( 2,294,130 )

Payments of debt issuance costs ( 1,086 ) ( 11,238 ) ( 37,009 )

Payments on debt discount, net ( 500 ) — —

Proceeds from revolver 1,060,000 752,500 565,000

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

Cash dividends paid to Class A Common Stock shareholders ( 81,352 ) ( 39,298 ) —

Distributions paid to Class C Common Unit limited partners ( 697 ) ( 1,230 ) ( 51,189 )

Equity contributions — — 14,890

Repurchase of Class A Common Stock ( 5,757 ) — —

Net cash provided by (used in) financing activities

99,956 ( 339,211 ) ( 136,810 )

Net change in cash $ ( 1,884 ) $ ( 12,335 ) $ ( 862 )

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KINETIK HOLDINGS INC.

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(In thousands)

Cash dividends paid to Class A Common Stock shareholders ( 175,208 ) ( 81,352 ) ( 39,298 )

Distributions paid to Class C Common Unit limited partners ( 220,769 ) ( 697 ) ( 1,230 )

Repurchase of Class A Common Stock — ( 5,757 ) —

Net cash (used in) provided by financing activities

( 461,363 ) 99,956 ( 339,211 )

Net change in cash $ ( 904 ) $ ( 1,884 ) $ ( 12,335 )

CASH, BEGINNING OF PERIOD $ 4,510 $ 6,394 $ 18,729

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Property and equipment and intangible accruals in accounts payable and accrued liabilities $ 21,094 $ 27,316 $ 17,274

Lease assets obtained in exchange for lease liabilities $ 5,189 $ 7,059 $ 43,580

Right-of-use obtained in exchange for lease liabilities $ 43,682 $ 5,189 $ 7,059

Class A Common Stock issued through dividend and distribution reinvestment plan $ 75,633 $ 352,060 $ 263,285

Fair value of ALTM assets acquired $ — $ 2,444,450 $ —

Fair value of assets acquired in Durango and ALTM Acquisition (1)

$ 875,244 $ — $ 2,444,450

Cash consideration paid 357,967 — —

Class C Common Units issued in exchange 148,200 — —

Class A Common Stock issued in exchange — — 1,013,745

ALTM liabilities and mezzanine equity assumed $ — $ 1,430,705 $ —

The accompanying notes to consolidated financial statements are an integral part of this statement.

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Index to Financial Statements

Deferred consideration 275,000 — —

Contingent consideration 4,500 — —

Liabilities and mezzanine equity assumed $ 89,577 $ — $ 1,430,705

(1) See Note 3—Business Combinations in the Notes to Consolidated Financial Statements for additional information regarding the Durango and ALTM Acquisition (as defined herein).

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

Index to Fin ancial Statements

KINETIK HOLDINGS INC.

1 unchanged sentence

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

Redeemable Noncontrolling Interest — Common Unit Limited Partner Class A Common Stock Class C Common Stock Additional Paid-in Capital Accumulated Deficit Treasury

Redeemable Noncontrolling Interest — Common Unit Limited Partner Class A

Deferred Consideration

Additional Paid-in Capital Accumulated Deficit Treasury

Stock Total Equity

Amount Shares (1)

Amount Shares (2)

(In thousands) (In thousands)

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

Contribution — 14,890 — — 491 — — — — —

Distributions paid to Class E Unit limited partners

— ( 51,189 ) — — ( 1,689 ) — — — — —

Net income — 1,482 — — — — — — — —

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

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Balance at December 31, 2022 $ — $ 3,112,409 45,679 $ 5 94,270 $ 9 — $ — $ 118,840 $ ( 958,629 ) $ — $ ( 839,775 )

(1) Share amounts have been retrospectively restated to reflect the Company’s reverse stock split, which was effected June 8, 2022.

Refer to Note 11—Equity and Warrants in the Notes to our Consolidated Financial Statements in this Annual Report for further information.

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KINETIK HOLDINGS INC.

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Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

Redeemable Noncontrolling Interest — Common Unit Limited Partner Class A Common Stock Class C Common Stock Additional Paid-in Capital Accumulated Deficit Treasury

Redeemable Noncontrolling Interest — Common Unit Limited Partner Class A

Deferred Consideration

Additional Paid-in Capital Accumulated Deficit Treasury

Stock Total Equity

Amount Shares (1)

Amount Shares (2)

(In thousands) (In thousands)

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Balance at December 31, 2023 $ — $ 3,157,807 57,097 $ 6 94,089 $ 9 — $ — $ 192,678 $ ( 723,516 ) $ — $ ( 530,823 )

The accompanying notes to consolidated financial statements are an integral part of this statement.

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KINETIK HOLDINGS INC.

STATEMENTS OF CONSOLIDATED CHANGES IN EQUITY AND NONCONTROLLING INTERESTS (CONTINUED)

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

Redeemable Noncontrolling Interest — Common Unit Limited Partner Class A

Deferred Consideration

Additional Paid-in Capital Accumulated Deficit Treasury

Stock Total Equity

Amount Shares (1)

Amount Shares (2)

(In thousands) (In thousands)

Balance at December 31, 2023 $ — $ 3,157,807 57,097 $ 6 94,089 $ 9 — $ — $ 192,678 $ ( 723,516 ) $ — $ ( 530,823 )

Durango Acquisition — 423,200 — — 3,840 — 7,680 1 — — — 1

Redemption of Common Units — ( 5,060 ) 146 — ( 146 ) — — — 5,060 — — 5,060

Issuance of common stock through dividend and distribution reinvestment plan — — 2,213 — — — — — 75,633 — — 75,633

Share-based compensation — — 474 — — — — — 76,536 — — 76,536

Net income — 164,219 — — — — — — — 80,014 — 80,014

Change in redemption value of noncontrolling interests — 2,506,075 — — — — — — ( 353,997 ) ( 2,152,078 ) — ( 2,506,075 )

Recognition of deferred tax asset — — — — — — — — 4,090 — — 4,090

Distribution paid to Common Unit limited partners — ( 290,579 ) — — — — — — — — — —

Dividends on Class A Common Stock ($ 3.03 per share)

— — — — — — — — — ( 181,032 ) — ( 181,032 )

Balance at December 31, 2024 $ — $ 5,955,662 59,930 $ 6 97,783 $ 9 7,680 $ 1 $ — $ ( 2,976,612 ) $ — $ ( 2,976,596 )

(1) Share amounts have been retrospectively restated to reflect the Company’s reverse stock split, which was effected June 8, 2022.

Refer to Note 11—Equity and Warrants in the Notes to our Consolidated Financial Statements in this Annual Report for further information.

(2) Pursuant to the Durango MIPA (as defined herein), deferred consideration of 7.7 million shares of Class C Common Stock is to be issued on July 1, 2025.

Fair value of the deferred consideration was included in the “Redeemable noncontrolling interest—Common Units limited partners” of the Consolidated Balance Sheets as of December 31, 2024.

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

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KINETIK HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

BCP Raptor Holdco, LP (“ BCP”), the predecessor for accounting purposes of Kinetik Holdings Inc., a Delaware corporation (the “Company,” formerly known as Altus Midstream Company), 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 Midstream Ventures, LLC and CR Permian Holdings, LLC.

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 and produced water gathering and disposal assets.

Altus Midstream Company (“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 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.

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 (the “Closing Date”), the Company consummated the business combination transaction (the “Transaction”) contemplated by that certain Contribution Agreement, dated as of October 21, 2021 (the “Contribution Agreement”), by and among the Company, Altus Midstream LP (now known as Kinetik Holdings LP) (the “Partnership”), New BCP Raptor Holdco, LLC, a Delaware limited liability company (“Contributor”) and BCP.

The transactions contemplated by the Contribution Agreement are referred to herein as the “Transaction.” In connection with the closing of the Transaction (the “Closing”), the Company changed its name from “Altus Midstream Company” 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.

Kinetik Holdings Inc, (the “Company”) is a holding company, whose only significant assets are ownership of the non-economic general partner interest and an approximate 38 % limited partner interest in Kinetik Holdings LP, a Delaware limited partnership (the “Partnership”).

As the owner of the non-economic general partner interest in the Partnership, the Company is responsible for all operational, management and administrative decisions related to, and consolidates the results of, the Partnership and its subsidiaries.

BCP Raptor Holdco, LP (“ BCP”), the predecessor for accounting purposes of the Company, formerly known as Altus Midstream Company), was formed on April 25, 2017 as a Delaware limited partnership to acquire and develop midstream oil and gas assets.

On February 22, 2022 (the “Altus Closing Date”), the Company consummated the business combination transaction (the “Altus Acquisition”) contemplated by that certain Contribution Agreement, dated as of October 21, 2021 (the “Contribution Agreement”), by and among the Company, Altus Midstream LP (now known as Kinetik Holdings LP) (the “Partnership”), New BCP Raptor Holdco, LLC, a Delaware limited liability company (“Contributor”) and BCP.

In connection with the closing of Altus Acquisition, the Company changed its name from “Altus Midstream Company” to “Kinetik Holdings Inc.”

On June 24, 2024, the Company consummated the previously announced transaction contemplated by the Membership Interest Purchase Agreement (the “Durango MIPA”), dated May 9, 2024, by and between the Company, the Partnership, and Durango Midstream LLC, an affiliate of Morgan Stanley Equity Partners (the “Durango Seller”), pursuant to which the Partnership purchased all of the membership interests of Durango Permian LLC and its wholly owned subsidiaries (“Durango”) from Durango Seller (“Durango Acquisition”).

The Durango Acquisition allows the Company to further expand its footprint into New Mexico and across the Northern Delaware Basin.

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, NGL and crude oil to market.

Additionally, the Company owns two NGL pipelines and equity interests in four separate Permian Basin pipeline entities that have access to various markets along the U.S.

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

Additionally, the Company owns two NGL pipelines and equity interests in three separate Permian Basin pipeline entities that have access to various markets along the U.S.

Basis of Presentation

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All intercompany balances and transactions have been eliminated in consolidation.

Prior to the Closing, the Company’s financial statements that were filed with the SEC were derived from ALTM’s accounting records.

As the Transaction was determined to be a reverse merger, BCP was considered the accounting acquirer and ALTM was the legal acquirer.

The accompanying Consolidated Financial Statements herein include (1) BCP’s net assets carried at historical value, (2) BCP’s historical results of operations prior to the Transaction, (3) ALTM’s net assets carried at fair value as of the Closing Date and (4) the combined results of operations with the Company’s results presented within the Consolidated Financial Statements from February 22, 2022 going forward.

Refer to Note 3 — Business Combination s in the Notes to our Consolidated Financial Statements in this Annual Report for further information.

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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 retrospectively restated in this Annual Report to reflect the two -for-one stock split, except for the number of common units representing limited partner interests in the Partnership (“Common Units”) and shares of the Company’s Class C Common Stock, par value $ 0.0001 per share (“Class C Common Stock”) described in relation to the Transaction in this Annual Report, which are presented at pre-Stock-Split amounts.

During the year ended December 31, 2024, the Company adopted ASU 2023-07, S egment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”) which has required prior periods to reflect the change in presentation.

See Note 2—Summary of Significant Accounting Policies , Recent Accounting Pronouncements for further discussion.

In addition, the Company completed a two-for-one stock split on June 8, 2022 (the “Stock-Split”).

All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retrospectively restated in this Annual Report to reflect the two-for-one stock split, except for the number of common units representing limited partner interests in the Partnership (“Common Units”) and shares of the Company’s Class C Common Stock, par value $ 0.0001 per share (“Class C Common Stock”) described in relation to the Altus Acquisition in this Annual Report, 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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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(1) Midstream Logistics and (2) Pipeline Transportation.

During the year ended December 31, 2024, the Company adopted ASU 2023-07 and identified significant segment expenses that are provided to CODM on a regular basis.

See No te 19—Segm ents in the Notes to our Consolidated Financial Statements in this Annual Report for further information.

Revenue Recognition

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The Company remits an agreed-upon percentage of proceeds to the producer based on the market price received from third parties or the index price defined in the contract.

Under these arrangements, revenue is recognized net of the agreed-upon proceeds remitted to producers when the Company acts as an agent of the

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producer for the associated third-party sale.

Under these arrangements, revenue is recognized net of the agreed-upon proceeds remitted to producers when the Company acts as an agent of the producer for the associated third-party sale.

However, in certain instances the Company acts as the principal for processed residue gas and NGLs by purchasing these volumes from the associated producer at the tailgate of the plant at index prices.

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Percent-of-products arrangements – Under percent-of-products based contract arrangements, the Company will gather and process natural gas on behalf of producers.

As partial compensation for services, the producer assigns to the Company, for no additional consideration, all right, title and interest to a set percentage, as defined in the contract, of the processed residue volumes.

As partial compensation for services, the producer assigns to the

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Company, for no additional consideration, all right, title and interest to a set percentage, as defined in the contract, of the processed residue volumes.

The Company recognizes the fair value of these products as revenue when the associated performance obligation has been met.

Product sales contracts – Under these contracts, we sell natural gas, NGLs or condensate to third parties.

These sales are presented gross within revenues and cost of sales or net within revenues depending on whether the Company acts as the agent or the principal in the sale transaction as discussed above.

These sales are presented gross within revenues and cost of sales or net within revenues depending on whether the Company acts as the principal or the agent in the sale transaction as discussed above.

Our fee-based service contracts primarily have a single performance obligation to deliver a series of distinct goods or services that are substantially the same and have the same pattern of transfer to our producers.

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See Note 4 — Revenue Recognition in the Notes to our Consolidated Financial Statements in this Annual Report for further information.

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Concentration Risk

All operations and efforts of the Company are focused in the oil and gas industry and are subject to the related risks of the industry.

The Company’s assets are located in the Delaware Basin.

The Company’s assets are located in the Permian Basin, across Texas and New Mexico.

Demand for the Company’s products and services may be influenced by various regional and global factors and may impact the value of the projects the Company is developing.

The Company’s concentration of customers may impact its overall business risk, either positively or negatively, in that these entities may be similarly affected by changes in the economy or other conditions.

The Company’s operations involve a variety of counterparties, both investment grade and non-investment grade.

The Company’s operations involve a

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variety of counterparties, both investment grade and non-investment grade.

The Company analyzes the counterparties’ financial condition prior to entering into an agreement, establishes credit limits and monitors the appropriateness of these limits on an ongoing basis within approved tolerances, with the primary focus on published credit ratings when available and inherent liquidity metrics to mitigate credit risk.

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Consolidated Operating Revenue $ 1,482,929 $ 1,256,412 $ 1,213,490

As of December 31, 2023 and 2022, approximately 39 % and 65 %, respectively, of accounts receivable were derived from the above customers.

As of December 31, 2024 and 2023, approximately 48 % and 40 %, respectively, of accounts receivable and accounts receivable pledged were derived from the above customers.

All operating revenue derived from above customers are included in the Midstream Logistics segment.

Major Producers are defined as our producers who we gather natural gas, crude and/or produced water and process gas and dispose of produced water from and account for 10% or more of our cost of sales as presented in the consolidated financial statements.

For the year ended December 31, 2024, approximately 59 % of the Company’s cost of sales were derived from two producers.

For the year ended December 31, 2023, approximately 60 % of the Company’s cost of sales were derived from three producers.

For the year ended December 31, 2022, approximately 87 % of the Company’s cost of sales were derived from five producers.

For the year ended December 31, 2021, approximately 92 % of the Company’s cost of sales were derived from five producers.

This concentration of producers may impact the Company's overall business risk, either positively or negatively, in that these entities may be similarly affected by changes in the economy or other conditions.

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Topic 820 provides a framework for measuring fair value, establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of the counterparty’s creditworthiness when valuing certain assets.

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Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

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An active market is defined as a market where transactions for a financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

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Level 2 inputs :

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The Company considers all highly liquid short-term investments with a maturity of three months or less at the time of purchase to be cash equivalents.

These investments are carried at cost, which approximates fair value.

These investments are carried at cost, which approximate fair value.

As of December 31, 2024 and 2023, the Company had $ 3.6 million and $ 4.5 million, respectively, of cash and cash equivalents.

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Accounts Receivable and Current Expected Credit Losses

2 unchanged sentences

The Company had an allowance for credit losses of $ 1.0 million as of December 31, 2024 and 2023.

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Accounts Receivable Securitization Facility

Pursuant to ASC 860, Transfers and Servicing, accounts receivable that are sold or contributed by the Partnership to the special purpose vehicle are treated as collateral for borrowings under the third party A/R Facility (as defined below) and are included as “Accounts receivable pledged” within the Consolidated Balance Sheets.

Proceeds from the transfer of the eligible accounts receivable under the third party A/R Facility are secured borrowings included as “Current debt obligations” within our Consolidated Balance Sheets.

Proceeds and repayments under such facility are reflected as cash flows from financing activities in our Consolidated Statements of Cash Flows.

See Note 8 —D ebt and Financing Costs for further discussion.

Gas Imbalance

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The incremental borrowing rate is determined by using the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a

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similar economic environment.

23 unchanged sentences

Liabilities related to environmental assessments and/or remedial efforts are accrued when property or services are probable or can reasonably be estimated.

No environmental liabilities were recorded as of December 31, 2023 and 2022.

See Note 17—Commitments and Contingencies for additional discussion of environmental matter-related assessment.

Intangible Assets

Intangible assets consist of rights of way agreements and customer contracts.

Intangible assets consist of rights of way agreements, primarily relate to underground pipeline easements and 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, and customer contracts, which are capitalized as a result of acquiring favorable customer contracts from business combinations with remaining contract terms that range from five to twenty years on acquisition dates.

Intangible assets are amortized on a straight-line basis over their estimated economic life or remaining term of the contract and are assessed for impairment with the associated long-lived asset group whenever impairment indicators are present.

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Goodwill is not amortized, but instead is tested for impairment in accordance with FASB ASC 350 , Intangibles – Goodwill and Other (“Topic 350”) at the reporting unit level at least annually.

The Company’s reporting unit is subject to impairment testing annually, on November 30, or more frequently if events and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

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The Company’s reporting unit is subject to impairment testing annually, on November 30,

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or more frequently if events and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Topic 350 provides the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill.

4 unchanged sentences

If the carrying value of a reporting unit exceeds its fair value, the Company will recognize an impairment loss equal to the amount of the excess, limited to the amount of goodwill allocated to that reporting unit.

The Company assessed relevant qualitative factors, such as the Company’s operation, actual versus budgeted results of operation, forecast, macroeconomics conditions, etc.

The Company assessed relevant qualitative factors, such as the Company’s operations, actual versus budgeted results of operations, forecast, macroeconomics conditions, etc.

The Company concluded there is no indication that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

1 unchanged sentence

Impairment of Long-Lived Assets

In accordance with 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.

In accordance with FASB ASC 360, Property, Plant and Equipment, long-lived assets, excluding goodwill, to be held and used by the Company are reviewed for impairment 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.

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In the event that the Company is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity would be consolidated in our financial statements.

The Company has determined that it has significant influence over the operating and financial policies of the four pipeline entities in which it is invested, but does not exercise control over them;

The Company has determined that it has significant influence over the operating and financial policies of the three pipeline entities in which it is invested, but does not exercise control over them;

and hence, it accounts for these investments using the equity method.

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Please refer to Note 7—Equity Method Investments in the Notes to our Consolidated Financial Statements in this Annual Report, for further information of the Company’s EMIs.

EMIs acquired in the Transaction were recorded at fair value upon Closing.

See discussion and additional detail in Note 3 — Business Combinations in the Notes to our Consolidated Financial Statements in this Annual Report for the purchase price allocation of the Transaction.

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The Company’s accounting policy is to classify its line fill as an other long-term asset to be consistent with industry practices and given line fill is required on certain third-party and wholly owned pipelines to properly flow the Company’s product.

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The Company’s accounting policy is to classify its line fill as an other long-term asset to be consistent with industry practices and given line fill is required on certain third-party pipelines to properly flow the Company’s product.

Additionally, this line fill is contractually required to be maintained through the life of the contract with our counterparty and therefore will not be settled within an operating period.

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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 Company’s Class A Common Stock, par value $ 0.0001 per share (“Class A Common Stock”).

The redemption value was determined based on a 5-day volume weighted-average closing price of the Company’s Class A Common Stock, par value $ 0.0001 per share.

See discussion and additional details in Note 11—Equity and Warrants in the Notes to our Consolidated Financial Statements in this Annual Report.

2 unchanged sentences

As the Transaction was accounted for as a reverse merger, the Company assumed certain Preferred Units that were issued and outstanding as of the Closing Date for accounting purposes.

At the Close of the Transaction, the Company effectuated the Third Amended and Restated Agreement of Limited Partnership of the Partnership, which among other things, provided for mandatory pro-rata redemptions by the Partnership.

At the Close of the Altus Acquisition, the Company effectuated the Third Amended and Restated Agreement of Limited Partnership of the Partnership, which among other things, provided for mandatory pro-rata redemptions by the Partnership.

Given this mandatory redemption feature and pursuant to FASB ASC 480, liability classification was required for these Preferred Units and the pro rata PIK units.

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During 2022, the Company redeemed all outstanding redeemable noncontrolling Preferred Units and recorded a gain on the related embedded derivative of $ 89.1 million.

Deferred Consideration Shares

The adjusted purchase price of the Durango Acquisition included deferred consideration of approximately 7.7 million shares of Class C Common Stock (and an equivalent number of common units in the Partnership (“OpCo Units”)), valued at $ 275.0 million to be issued on July 1, 2025.

Pursuant to ASC 260—Earnings Per Share , these shares are considered as deferred consideration and outstanding as of the Durango Closing Date for the purpose of earning per share (“EPS”) calculation as issuance of these shares is not subject to any conditions other than the passage of time.

Fair value of the deferred consideration was included in the “Redeemable noncontrolling interest—Common Units limited partners” of the Consolidated Balance Sheets as of December 31, 2024.

The outstanding number of deferred consideration shares is part of the “if-converted method” used by the Company to determine the potential dilutive effect of 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.

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Share-Based Compensation

Immediately upon Closing, all outstanding Class A-1 and Class A-2 units from BCP were cancelled and exchanged for shares of Class A Common Stock (“Class A Shares”).

On Altus Closing Date, all outstanding Class A-1 and Class A-2 units from BCP were cancelled and exchanged for shares of Class A Common Stock (“Class A Shares”).

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

1 unchanged sentence

In addition, the Company granted restricted stock units (“RSUs”) to its officers, directors and employees pursuant to the Company’s 2019 Omnibus Compensation Plan, as amended from time to time.

The Class A and Class C Shares and RSUs are recorded at grant-date fair value and compensation expense is recognized on a straight‑line basis over the vesting period within “General and Administrative Expense” of the Consolidated Statements of Operations in accordance with FASB ASC 718 , C ompensation - Stock Compensation .

Forfeitures are recognized as they occur.

In the first quarter of 2024, the Company granted performance stock units (“PSUs”) pursuant to the Kinetik Holdings Inc.

Amended and Restated 2019 Omnibus Compensation Plan to certain of its employees and executives.

These PSUs vest and become earned upon the achievement of certain performance goals based on the Company’s annualized absolute total stockholder return and the Company’s relative total stockholder return as compared to the performance peer group during a three-year performance period.

Depending on the results achieved during the three-year performance period, the actual number of Class A Common Stock that a holder of the PSUs earns at the end of the performance period may range from 0 % to 200 % of the target number of PSUs granted.

The fair value of the PSUs is determined using a Monte Carlo simulation at the grant date.

The Company recognized compensation expense for PSUs on a straight-line basis over the performance period within “General and Administrative Expense” of the Consolidated Statements of Operations in accordance with FASB ASC 718.

Any PSU not earned at the end of the performance period will be forfeited.

See further discussion of the Company’s assessment in Note 14—Share-Based Compensation in the Notes to our Consolidated Financial Statements in this Annual Report.

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The Company is subject to federal income and Texas margin tax.

The Company is subject to federal income, state income, and Texas margin tax.

The Texas margin tax is assessed on corporations, limited liability companies, and limited partnerships.

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If the Company concludes that it is more likely than not that some or all of its deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance.

See further discussion of the Company’s assessment in N ote 15 —Income Taxes in the Notes to our Consolidated Financial Statements in this Annual Report.

See further discussion of the Company’s assessment in Note 15—Income Taxes in the Notes to our Consolidated Financial Statements in this Annual Report.

Net Income Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income attributable to Class A common shareholders by the weighted-average number of shares of Class A Common Stock outstanding during the period.

Basic EPS is calculated by dividing net income attributable to Class A common shareholders by the weighted-average number of shares of Class A Common Stock outstanding during the period.

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 years ended December 31, 2021, as no Class A Common Stock was outstanding with respect to BCP as the accounting acquirer as of December 31, 2021.

The Company uses the “if-converted method” to determine the potential dilutive effect of 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 and includes the dilutive effect of unvested Class A common shares in the diluted weighted average outstanding shares calculation.

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Recently Adopted Accounting Pronouncement

Effective January 1, 2022, the Company adopted ASU 2022-01, Derivatives and Hedging (Topic 815):

Fair Value Hedging - Portfolio Layer Method (“ASU 2022-01”) .

Current GAAP permits only prepayable financial assets and one or more beneficial interests secured by a portfolio of prepayable financial instruments to be included in a last-of-layer closed portfolio.

The amendments in ASU 2022-01 allow nonprepayable financial assets also to be included in a closed portfolio hedged using the portfolio layer method.

That expanded scope permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges.

The amendments in ASU 2022-01 also clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers as follows:

(1) an entity is required to maintain basis adjustments in an existing hedge on a closed portfolio basis (that is, not allocated to individual assets), (2) an entity is required to immediately recognize and present the basis adjustment associated with the amount of the designated layer that was breached in interest income.

In addition, an entity is required to disclose that amount and the circumstances that led to the breach, (3) an entity is required to disclose the total amount of the basis adjustments in existing hedges as a reconciling amount if other areas of GAAP require the disaggregated disclosure of the amortized cost basis of assets included in the closed portfolio, and (4) an entity is prohibited from considering basis adjustments in an existing hedge when determining credit losses.

As the Company does not currently elect to apply hedge accounting, the instruments are marked-to-market each period end and changes in fair value, realized or unrealized, are recognized in earnings.

Therefore, adoption of ASU 2022-01 did not have a material impact on the Company’s Consolidated Financial Statements.

Effective January 1, 2022, the Company adopted ASU 2021-08 , Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) , which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers .

Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree.

Historically, such amounts were recognized by the acquirer at fair value.

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

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 London Interbank Offered Rate, the benchmark interest rate banks use to make short-term loans to each other.

The amendments

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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 interest rate applied to the Company’s new debt resulting from the comprehensive refinance is based on SOFR, which is a broad measure of the cost of borrowing cash overnight collateralized by treasury securities.

Refer to Note 8 — Debt and Financing Costs in the Notes to our Consolidated Financial Statements of this Annual Report for discussion of SOFR applicable to the Company’s debt structures.

Recent Accounting Pronouncement Not Yet Adopted

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements (“ASU 2023-06”).

This update represent changes to clarify or improve disclosure and presentation requirements of a variety of Topics, including 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services—Investment Companies—Investment Company Activities and 974-10 Real Estate—Real Estate Investment Trusts—Overall.

For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

For all other entities, the amendments will be effective two years later.

If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.

The Company is currently evaluating the effect that ASU 2023-06 will have on the disclosures within its Consolidated Financial Statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

Effective January 1, 2024, the Company adopted ASU 2023-07, which was applied retrospectively to all prior periods presented in the financial statements.

The amendment requires a public entity disclose, on an annual and interim basis (1) significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”);

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The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss;

(3) clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources;

(3) clarification if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources;

(4) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

A public entity should apply the amendments in this Update retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company is currently evaluating the effect that ASU 2023-07 will have on the disclosures within its Consolidated Financial Statements.

With adoption of ASU 2023-07, the Company has updated the segment disclosures in Note 19—Segments .

Recent Accounting Pronouncement Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) (“ASU 2023-09”).

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Retrospective application is permitted.

The Company is currently evaluating the effect that ASU 2023-09 will have on the disclosures within its Consolidated Financial Statements.

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We are evaluating the effect of the amendments on our consolidated financial statements and expect to disclose the required information beginning in the Annual Report on Form 10-K for the year ended December 31, 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”).

The new standard requires that at each interim and annual reporting period an entity:

(1) Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (DD&A) (or other amounts of depletion expense) included in each relevant expense caption.

A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e).

(2) Include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements.

(3) Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

(4) Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures - Clarifying the Effective Date (“ASU 2025-01”).

ASU 2024-03 and ASU 2025-01 apply to all public business entities and are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027.

The requirements will be applied prospectively with the option for retrospective application.

Early adoption is permitted.

The Company is currently evaluating the effect that ASU 2024-03 and 2025-01 will have on the disclosures within its Consolidated Financial Statements.

BUSINESS COMBINATIONS

As of December 31, 2023, our allocation of purchase price for acquisitions made during 2023 and 2022 are detailed below:

Acquisition Date Acquisition Consideration Transferred

Current Assets Property Plant & Equipment Intangible Assets Other Long Term Assets Goodwill Liabilities Noncontrolling Interest

Durango Permian LLC Acquisition

On June 24, 2024 (the “Durango Closing Date”), the Company consummated the previously announced transaction contemplated by the Durango MIPA, dated May 9, 2024, by and between the Company, the Partnership, and the Durango Seller, pursuant to which the Partnership purchased all of the membership interests of Durango from Durango Seller for an adjusted purchase price of approximately $ 785.7 million, consisting of (i) $ 358.0 million of cash consideration paid at closing, (ii) approximately 3.8 million shares of Class C Common Stock, par value $ 0.0001 per share, of the Company (“Class C

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Common Stock”) (and an equivalent number of OpCo Units), valued at $ 148.2 million, issued at closing and (iii) approximately 7.7 million shares of Class C Common Stock (and an equivalent number of OpCo Units), valued at $ 275.0 million, to be issued on July 1, 2025.

Durango Seller is also entitled to an earn out of up to $ 75.0 million in cash contingent upon the Kings Landing gas processing complex in Eddy County, New Mexico (the “Kings Landing Project”), which is currently under construction, being placed into service (the “Kings Landing Earnout”).

The Kings Landing Earnout is subject to reduction based on actual capital costs associated with the Kings Landing Project.

The Durango Acquisition allows the Company to further expand its footprint into New Mexico and across the Northern Delaware Basin.

The Durango Acquisition was accounted for as a business combination in accordance with ASC 805 Business Combination (“ASC 805”).

Starting on the Durango Closing Date, our Consolidated Financial Statements reflected Durango as a consolidated subsidiary.

The accompanying Consolidated Financial Statements in this Annual Report herein include (i) the combined net assets of the Company carried at historical costs and net assets of Durango carried at fair value as of the Durango Closing Date and (ii) the combined results of operations of the Company with Durango’s results presented within the Consolidated Financial Statements in this Annual Report from the Durango Closing Date going forward.

Both observable and non-observable market data, thus Level 2 and Level 3 inputs, are used in the assessment of the fair value of the assets acquired and liabilities assumed listed in the table below.

The fair value of the processing plants, gathering system and related facilities and equipment is based on market and cost approaches and will be depreciated over an estimated useful life ranging from one to thirty years , which is consistent with the Company’s policy over similar facilities and equipment.

The fair value of the intangible assets is based on the market and cost approaches for the right-of-way and discounted cash flow approach for customer contracts, which will be amortized over estimated useful lives ranging from eight to nine years .

The assumed liabilities are approximate to fair value as of the Durango Closing Date.

Acquired net assets from this business combination were included in the Midstream Logistic segment.

In addition, the Company recorded a contingent liability related to the Kings Landing Earnout based on project completion probability, see additional information in Note 17—Commitments and Contingencies in the Notes to our Consolidated Financial Statements set forth in this Annual Report.

Since the Durango Closing Date, the Company has made necessary adjustments to the purchase price allocation as information about facts and circumstances that existed at the Durango Closing Date have become available.

This included certain working capital adjustments as a result of obtaining Durango’s closing balance sheet as of June 30, 2024.

During the year ended December 31, 2024, the Company identified working capital adjustments of $ 26.1 million and a reduction of other long-term assets of $ 0.2 million resulting from the final closing balance sheet, identification and assessment of environmental liabilities totaling $ 24.0 million, valuation adjustments related to the long-lived assets and intangible assets of $ 50.6 million, valuation of deferred tax liabilities of $ 0.4 million and valuation of contingent liabilities related to the Kings Landing Earnout of $ 59.5 million, resulting in a decrease in goodwill of $ 10.4 million.

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The following table summarizes the estimated fair value of assets acquired and liabilities assumed in the Durango Acquisition as of June 24, 2024, in accordance with ASC 805:

(In thousands) Amount

Cash and cash equivalents $ 16,785

Accounts receivable 29,386

Prepaid and other current assets 15,000

Property, plant, and equipment, net 627,452

Intangible assets, net 183,000

Deferred charges and other assets 4

Operating lease ROU assets 3,617

Total assets acquired 875,244

Accounts payable 34,443

Accrued expenses 7,140

Environmental liabilities

Contract liabilities 642

Operating lease liabilities 3,617

Deferred tax liabilities 19,735

Total liabilities assumed 89,577

Contingent consideration (1)

Consideration transferred $ 781,167

(1) Pursuant to ASC 805, the Company evaluated the earn-out consideration classification in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”).

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

Therefore, the Company records the contingent consideration at fair value as of December 31, 2024.

Additional discussion in Note 17—Commitments and Contingencies in the Notes to our Consolidated Financial Statements set forth in this Annual Report.

The Company incurred acquisition-related costs of $ 3.2 million for the year ended December 31, 2024, which were included in the “General and administrative expenses” of the Consolidated Statements of Operations.

The Company’s Consolidated Statement of Operations included results of operations from Durango starting from the Durango Closing Date through December 31, 2024, which included revenues of $ 75.9 million and net income of $ 4.1 million for the year ended December 31, 2024.

Supplemental Pro Forma Information

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

The results below for the years ended December 31, 2024 and 2023, respectively, combine the results of the Company and Durango, giving effect to the Durango Acquisition as if it had been completed on January 1, 2023.

Pro Forma Financials For the Year Ended December 31,

(In thousands)

(1) Q1 2023 Midstream Infrastructure Assets and Incentive and Acceleration Agreement (a)

$ 125,000 $ 4,736 $ 61,850 $ 3,150 $ 55,264 $ — $ — $ —

(2) Q1 2022 Altus Midstream Company (“ALTM”) $ 1,013,745 $ 38,750 $ 634,923 $ 13,200 $ 1,752,500 $ 5,077 $ ( 967,988 ) $ ( 462,717 )

(a) Consideration includes $ 65.0 million paid for certain midstream assets and $ 60.0 million paid related to the incentive and acceleration agreement.

Revenues $ 1,595,973 $ 1,560,541

Net income including noncontrolling interest $ 246,022 $ 378,997

Given the assumed pro forma transaction date of January 1, 2023, we removed $ 3.5 million of acquisition-related expenses for the year ended December 31, 2024 and recognized $ 3.5 million of acquisition-related expenses for the year ended December 31, 2023.

We also removed $ 24.0 million of interest expense on Durango’s debt for the year ended December 31, 2024, and $ 16.1 million for the year ended December 31, 2023, as if the business combination had occurred and the debt had been paid off on January 1, 2023.

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Midstream Infrastructure Assets

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Acquired net assets from this business combination were included in the Midstream Logistic segment.

Altus Midstream Company

On February 22, 2022, the Company consummated the Transaction.

Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of BCP and BCP Raptor Holdco GP, LLC, a Delaware limited liability company and the general partner of BCP (the “Contributed Entities”) to the Partnership;

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

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

During the 12-month measurement period following the acquisition date, the Company made necessary adjustments as information became available to the purchase price allocation, including, but not limited to, working capital and valuation of the underlying assets of the EMIs.

The Company recorded goodwill of $ 5.1 million related to operational synergies .

The Company incurred acquisition-related costs of nil and $ 6.4 million for the years ended December 31, 2023 and 2022, respectively, related to the Transaction.

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REVENUE RECOGNITION

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$ 1,482,929 $ 1,256,412 $ 1,213,490

There have been no significant changes to the Company’s contracts with customers during the years ended December 31, 2023, 2022, and 2021.

There have been no significant changes to the Company’s contracts with customers during the years ended December 31, 2024, 2023, and 2022 aside from the addition of certain gas gathering and processing agreements associated with the Durango Acquisition in 2024.

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

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

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Contract Liabilities

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Current and noncurrent contract liabilities are included in “Other Current Liabilities” and “Contract Liabilities”, respectively, of the Consolidated Balance Sheets.

Contract liabilities balance as of December 31, 2023 increased $ 2.9 million compared to that as of December 31, 2022.

Higher contract liabilities balance reflected new projects started during 2023 that included provisions for customer capital reimbursements.

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Contract liabilities balance as of December 31, 2024 decreased $ 5.6 million compared to that as of December 31, 2023.

Lower contract liabilities balance is primarily due to the reclassification of beginning contract liabilities to revenue as a result of performance obligations being satisfied during the year slightly offset by additional provisions for customer capital reimbursements.

Contract Cost Assets

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For the years ended December 31, 2024, 2023, and 2022, the Company recognized cost of sales associated with these assets of $ 6.6 million, $ 6.6 million and $ 1.8 million, respectively.

Contract cost assets balance as of December 31, 2023 increased $ 53.4 million compared to that as of December 31, 2022.

The increase was primarily related to the $ 60.0 million consideration paid for the incentive and acceleration agreement the Company entered into along with the midstream infrastructure assets acquisition consummated in first quarter of 2023.

See further discussion in Note 3—Business Combinations in the Notes to our Consolidated Financial Statements in this Annual Report.

PROPERTY, PLANT AND EQUIPMENT

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

Contract cost assets balance as of December 31, 2024, decreased $ 6.6 million compared to that as of December 31, 2023 related to the amortization of these assets during 2024.

PROPERTY, PLANT AND EQUIPMENT, NET

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

(In thousands)

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The Company recorded $ 184.1 million, $ 158.6 million and $ 139.6 million of depreciation expense for the years ended December 31, 2024, 2023, and 2022, respectively.

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Capitalized interest included in property, plant and equipment amounted to $ 8.3 million, $ 6.4 million and $ 1.4 million for the years ended December 31, 2024, 2023, and 2022, respectively.

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Total amortizable intangible assets, net $ 652,490 $ 591,670

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

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customer contracts, which range from one to twenty 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.

At December 31, 2023, the remaining weighted average amortization periods for customer contracts and right of way assets were approximately 6.94 years and 6.59 years, respectively.

At December 31, 2024, the remaining customer contract amortization terms range from one to seventeen years with weighted average amortization periods of approximately 7.87 years, and the right-of-way assets remaining amortization terms range from one to fifteen years with weighted average amortization periods of approximately 6.53 years.

The overall remaining weighted average amortization period for the intangible assets as of December 31, 2024 was approximately 7.63 years.

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For each 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.

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

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Ownership Amount Ownership Amount

Permian Highway Pipeline LLP (“PHP”) (1)

55.5 % $ 1,666,254 53.3 % $ 1,474,800

Permian Highway Pipeline LLC (“PHP”) 55.5 % $ 1,607,323 55.5 % $ 1,666,254

Breviloba LLC (“Breviloba”) 33.0 % 428,383 33.0 % 443,684

Epic Crude Holdings, LP (“EPIC”) (1)

27.5 % 82,172 15.0 % —

Gulf Coast Express Pipeline LLC (“GCX”) (2)

— % — 16.0 % 431,051

(1) The PHP expansion project, started in June 2022, was completed and went into service in December 2023.

The Company’s ownership increased to 55.5 % upon completion.

Additionally, as of December 31, 2023, the Company owned 15.0 % of Epic Crude Holdings, LP (“EPIC”).

However, no dollar value was assigned through the Transaction’s purchase price allocation as an 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 year-ended December 31, 2023.

As of December 31, 2023 and 2022, the unamortized basis differences included in the EMI pipelines’ investment balances were $ 349.3 million and $ 363.2 million.

$ 2,117,878 $ 2,540,989

(1) As of December 31, 2023 and until the purchase of the 12.5 % equity interest in EPIC in July 2024, the Company owned 15.0 % of EPIC.

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

(2) The Company owned 16 % of GCX as of December 31, 2023 and divested its entire ownership in June 2024.

During the third quarter 2024, the Company entered into an Equity Sale and Purchase Agreement with third parties to purchase a 12.5 % equity interest in EPIC, increasing our total equity interest in EPIC to 27.5 %.

As the increase in ownership did not result in a controlling interest, and did not represent the funding of prior losses, the Company resumed accounting for its investment in EPIC using the equity method of accounting upon the closing of the acquisition of the additional interests during July 2024.

On June 4, 2024, the Company consummated the previously announced transaction contemplated by the Purchase and Sale Agreement dated as of May 9, 2024, to sell its 16 % equity interest in GCX to GCX Pipeline, LLC (the "GCX Buyer") for an adjusted price of $ 524.4 million (the "GCX Sale"), including a $ 30.0 million earn out in cash upon the approval by the GCX Board of Directors of one or more capital projects that achieve certain capacity expansion criteria.

The Company recognized a net gain of $ 89.8 million for the year ended December 31, 2024 in relation to this transaction.

As of December 31, 2024 and 2023, the unamortized net basis differences included in the EMI pipelines’ investment balances were $ 40.3 million and $ 349.3 million, respectively.

These amounts represent differences in the Company’s contributions to date and the Company’s underlying equity in the separate net assets within the financial statements of the respective entities.

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

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

There was capitalized interest of $ 23.9 million and $ 24.7 million as of December 31, 2024 and 2023, respectively.

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

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The following table presents the activities in the Company’s EMIs:

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$ 1,474,800 $ 455,057 $ 451,483 $ — $ 2,381,340

Acquisitions 817,500 467,500 467,500 1,752,500

Contributions 226,948 — — — 226,948

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$ 1,666,254 $ 443,684 $ 431,051 $ — $ 2,540,989

Acquisitions — — — 85,417 85,417

Contributions 3,273 — — — 3,273

Distributions ( 236,285 ) ( 42,156 ) ( 15,610 ) — ( 294,051 )

Capitalized interest 11,855 — — 11,855

Disposition — — ( 430,941 ) — ( 430,941 )

Equity income, net (1)

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$ 1,607,323 $ 428,383 $ — $ 82,172 $ 2,117,878

(1) For the year ended December 31, 2023, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $ 7.5 million from PHP, $ 0.7 million from Breviloba and $ 6.2 million from GCX.

(1) For the year ended December 31, 2024, net of amortization and accretion of basis differences and capitalized interests, which represents undistributed earnings, the amortization (accretion) was $ 7.9 million from PHP, $ 0.7 million from Breviloba, $ 2.7 million from GCX, and $( 3.2 ) million from EPIC.

For the year ended December 31, 2023, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $ 7.5 million from PHP, $ 0.7 million from Breviloba and $ 6.2 million from GCX.

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Summarized Financial Information

The following represented selected income statement and balance sheet data for the Company’s EMI pipeline entities (on a 100 percent basis):

The following represented selected income statement and balance sheet data for the Company’s EMI pipeline entities (on a 100 percent balance):

For the Year Ended December 31, 2024

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Operating income 326,338 87,301 110,679 92,566

Net income 261,332 94,378 273,194

Net income (loss) 327,335 87,886 110,458 ( 46,986 )

For the Year Ended December 31, 2023

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Operating income 259,872 93,763 267,019 55,830

Net income 261,028 97,834 268,493

Net income (loss) 261,332 94,378 273,194 ( 77,825 )

For the Year Ended December 31, 2022

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Operating income 261,040 98,119 269,150 12,174

Net income 236,528 92,005 253,535

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Net income (loss) 261,028 97,834 268,493 ( 71,821 )

Balance Sheets (In thousands)

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Total liabilities and equity $ 2,558,687 $ 1,266,164 $ 1,572,447 $ 2,118,925 $ 2,677,743 $ 1,307,756 $ 1,559,516 $ 2,153,295

(1) Represented summarized financial information from GCX for the five months period ended and as of May 31, 2024 as the Company sold all its equity interest in GCX on June 4, 2024.

DEBT AND FINANCING COSTS

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The 2030 Notes were issued under our Sustainability-Linked Financing Framework and include certain Sustainability Performance Targets (“SPT”) that the Company needs to meet from and including June 15, 2027.

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In addition, the Partnership entered into the revolving credit agreement with Bank of America, N.A.

as administrative agent, which provides for a $ 1.25 billion revolving credit facility (the “Revolving Credit Facility”) maturing on June 8, 2027, and the Term Loan with PNC Bank as administrative agent, which provided for a $ 2.00 billion senior unsecured term loan credit facility (“Term Loan”) maturing on June 8, 2025, which was amended on December 6, 2023 to extend the maturity date from June 8, 2025 to June 8, 2026, with an additional automatic six-month extension of the amended maturity date to December 8, 2026, at such time as no more than $ 1.00 billion of an aggregate principal amount of loans under the Term Loan remain outstanding, subject to customary conditions.

Both the Revolving Credit Facility and Term Loan include certain “Sustainability Adjustment” features that could result in an interest rate adjustment that depends on the Company meeting the sustainability targets defined in respective agreement.

Proceeds from the Notes and the Term Loan were used to repay all outstanding borrowings under previous credit facilities and to pay fees and expenses related to the offering.

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The Original 2028 Notes and the Additional 2028 Notes are treated as a single series of securities under the indenture governing the 2028 Notes, vote together as a single class, and have substantially identical terms, other than the issue date and issue price.

The 2028 Notes are fully and unconditionally guaranteed by the Company and issued under our Sustainability-Linked Financing Framework, and include sustainability-linked features described below.

Proceeds from the 2028 Notes, together with cash on hand and borrowings under the Partnership’s Revolving Credit Facility, were used to repay a portion of the outstanding borrowings under the Partnership’s existing Term Loan.

See additional information regarding the 2023 Term Loan Amendment below.

The 2028 Notes are fully and unconditionally guaranteed by the Company and include certain Sustainability Performance Targets (“SPT”) that the Company needs to meet from and including June 15, 2027.

Interest on the 2028 Notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing June 15, 2024.

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The $ 1.5 million premium was added to the 2028 Notes.

The debt issuance cost was amortized and debt premium was accreted to interest expense over the term of the 2028 Notes using the effective interest method.

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From and including June 15, 2027, the interest rate accruing on the 2028 Notes will be increased by an additional 0.250 % per annum unless the Partnership delivers written notice to the trustee on or before the date that is 15 days prior to June 15, 2027 that the Partnership has satisfied, and an independent external verifier has confirmed satisfaction of the SPT as defined in the indenture governing the 2028 Notes related to three key performance indicators:(1) Reduction of Scope 1 and Scope 2 greenhouse gas emissions intensity, (2) Reduction of Scope 1 and Scope 2 methane gas emissions intensity and (3) female representation in corporate officer positions.

If the conditions set forth above have only been satisfied for one or two of the SPTs rather than all three, the interest rate accruing on the 2028 Notes will be increased by an additional 0.0833 % per annum for each SPT which has not been satisfied and externally verified on June 15, 2027.

If the interest rate accruing on the 2028 Notes is increased in the manner set forth above and the Partnership subsequently delivers written notice to the trustee that it has satisfied the SPTs set forth in clause (1) and (2) above and such satisfaction has been confirmed by an independent external verifier, on or before the date that is 15 days prior to June 15, 2028, the interest rate accruing on the 2028 Notes will be reduced by 0.0833 % per annum for each such SPT.

The debt issuance cost is amortized and debt premium was accreted to interest expense over the term of the 2028 Notes using the effective interest method.

The Partnership may redeem in whole or in part, at a redemption price equal to the Make-Whole-Redemption Price, which is the greater of (1) 100 % of the principal amount of the 2028 notes to be redeemed or (2) the present value of the 2028 Notes to be redeemed at such redemption date, prior to December 15, 2025.

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Furthermore, the partial paydown of the principal under the Term Loan totaled $ 800.0 million, using proceeds from the 2028 Notes, resulting in the write off (loss extinguishment) of a proportional amount of the remaining unamortized debt issuance cost and original discount from the Term Loan immediately prior to the paydown.

The Company recorded a $ 1.9 million loss on extinguishment from these write offs in the Consolidated Statements of Operations.

The Company recorded a $ 1.9 million loss on extinguishment from these write offs in the Consolidated Statements of Operations for the year ended December 31, 2023.

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Accounts Receivable Securitization Facility

On April 2, 2024, Kinetik Receivables LLC (“Kinetik Receivables”), a bankruptcy remote special purpose entity formed as a direct subsidiary of the Partnership , which is a subsidiary of the Company, entered into an accounts receivable securitization facility with an initial facility limit of $ 150.0 million (“A/R Facility”) with PNC Bank, as the administrative agent, and certain purchasers party thereto from time to time, which has a scheduled termination date of April 1, 2025.

The aggregate fees and expenses paid directly to third parties in obtaining the A/R Facility totaled $ 1.1 million and were capitalized as debt issuance costs and included in the Consolidated Balance Sheets as a current asset within “Prepaid and other current assets”, amortized over the term of the A/R Facility to interest expense using the effective-interest method.

There were unamortized debt issuance costs related to the A/R Facility of $ 0.3 million as of December 31, 2024.

Pursuant to the A/R Facility, the Company and certain of its subsidiaries continuously transfer receivables to Kinetik Receivables and Kinetik Receivables transfers receivables that meet certain qualifying conditions to third-party purchasers in exchange for cash.

These receivables are held by Kinetik Receivables and are pledged to secure the collectability of the sold receivables and are accounted for as secured borrowings.

The amount available for borrowing at any one time under the A/R Facility is limited to an amount calculated based on the outstanding balance of eligible receivables sold to the purchasers, subject to certain reserves, concentration limits, and other limitations.

Under the A/R Facility, the Company is subject to pay a yield to the purchasers equal to SOFR plus a spread adjustment of 0.10 % and a drawn fee of 0.90 %.

The Company also pays a fee of 0.40 % on the undrawn committed amount of the A/R Facility.

Yield and fees payable by the Company under the AR Facility are due monthly.

The effective interest rate on the A/R Facility was 5.55 % as of December 31, 2024.

As of December 31, 2024, eligible accounts receivable of $ 140.2 million were pledged to the A/R Facility as collateral.

The Partnership has continuing involvement with the receivables transferred by Kinetik Receivables to the third-party purchasers by providing collection services.

The net proceeds of the A/R Facility were used, together with cash on hand, to repay a portion of the outstanding borrowings under the existing Term Loan Credit Facility, lowering the remaining balance to $ 1.0 billion.

As a result, the maturity of the Term Loan Credit Facility extended to December 8, 2026.

The Company recognized a loss on debt extinguishment of $ 0.5 million for the partial payment made on the Term Loan Credit Facility.

Sustainability Performance Targets

The Partnership’s outstanding debts were 100 % linked to sustainability performance targets as of December 31, 2023 and 2022, among which, the Partnership’s 2030 Notes and the 2028 Notes have SPTs that would result in interest rate adjustments starting on June 15, 2027, and the Partnership’s Term Loan and Revolving Credit Facility have SPTs to be met for each calendar year starting in 2022 and onward.

The Partnership delivered a certificate regarding performance of SPTs under the Term Loan and Revolving Credit Facility, which are linked to key performance indicators with respect to methane emission intensity ratio and female officer representation, in 2023.

The Company met both SPTs by achieving a reduction of 12.0 % of methane emission intensity from 2021 (base year) to 2022, which was 8.7 % higher than the respective SPT under the Term Loan and Revolving Credit Facility, and a 17.7 % female participation rate in 2022, which was 8.0 % higher than the respective SPT under the Term Loan and Revolving Credit Facility.

As a result of meeting both SPTs under the Term Loan and Revolving Credit Facility, there was a negative 0.05 % sustainability rate adjustment made to both instruments.

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The Partnership’s outstanding debts were 100 % linked to sustainability performance targets as of December 31, 2024 and 2023, among which, the Partnership’s 2030 Notes and the 2028 Notes have SPTs that would result in interest rate adjustments starting on June 15, 2027, and the Partnership’s Term Loan, Revolving Credit Facility and A/R Facility have SPTs to be met for each calendar year starting in 2022 and onward.

In 2023, the Company met both SPTs under the Term Loan and Revolving Credit Facility.

As a result of meeting both SPTs under the Term Loan and Revolving Credit Facility, the Company maintained the favorable rate adjustment for these facilities during 2024.

The 2024 SPTs will be verified in 2025 for rate adjustment.

Compliance with our Covenants

Both the Revolving Credit Facility with Bank of America, N.A.

as administrative agent, and the Term Loan with PNC Bank as administrative agent, contain customary covenants and restrictive provisions which may, among other things, limit the 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.

The 2030 Notes and the 2028 Notes also contain covenants and restrictive provisions, which may, among other things, limit the Partnership’s and its subsidiaries’ ability to create liens to secure indebtedness and the Partnership’s ability to consolidate or combine with or merge into any other person.

Each of the revolving credit agreements with Bank of America, N.A.

as administrative agent and the Term Loan Credit Facility, contain customary covenants and restrictive provisions which may, among other things, limit the Partnership’s ability to create liens, incur additional indebtedness and make restricted payments and the Partnership’s ability to liquidate, dissolve, consolidate with or merge into or with any other person.

The A/R Facility contains covenants and restrictive provisions with respect to the Partnership and Kinetik Receivables that are customary for accounts receivable securitization facilities.

As of December 31, 2024, the Partnership is in compliance with all customary and financial covenants.

Index to Fin ancial Statements

Fair Value of Financial Instruments

The fair value of the Company and its subsidiaries’ consolidated debt as of December 31, 2024 and 2023 was $ 3.52 billion and $ 3.57 billion, respectively.

At December 31, 2023, the 2030 Notes and the 2028 Notes’ fair value were based on Level 1 inputs and the Term Loan and Revolving Credit Facility’s fair value was based on Level 3 inputs.

At December 31, 2024, the 2030 Notes and the 2028 Notes’ fair value was based on Level 1 inputs and the Term Loan and Revolving Credit Facility’s fair value was based on Level 3 inputs and the A/R Facility’s fair value approximates its carrying value due to its short term nature.

The following table summarizes the Company’s debt obligations:

(In thousands)

A/R Facility $ 140,200 $ —

Total current debt obligations $ 140,200 $ —

Unsecured term loan (1)

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$ 0.80 billion 2028 senior unsecured notes

800,000 800,000

$ 1.25 billion revolving line of credit (2)

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$ 3,363,996 $ 3,562,809

(1) The effective interest rate was 6.25 % and 7.06 % as of December 31, 2024 and 2023, respectively.

(2) The weighted average effective interest rate was 6.43 % and 7.06 % as of December 31, 2024 and 2023, respectively.

(3) Excludes unamortized debt issuance cost related to the Revolving Credit Facility.

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Total financing costs, net of capitalized interest $ 217,235 $ 205,854 $ 149,252

As of December 31, 2023 and 2022, unamortized debt issuance costs associated with the 2030 Notes, the 2028 Notes and the Term Loan were $ 31.5 million and $ 26.5 million, respectively, and unamortized debt premium and discount, net, associated with the 2028 Notes and Term Loan were $ 0.3 million and nil , respectively.

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The following table reflects future maturities of long-term debt for each of the next five years and thereafter.

These amounts exclude approximately $ 31.2 million in unamortized deferred financing costs, debt premium and discount:

As of December 31, 2024 and 2023, unamortized debt issuance costs associated with the 2030 Notes, the 2028 Notes and the Term Loan Credit Facility were $ 26.2 million and $ 31.5 million, respectively, and unamortized debt premium and discount, net, associated with the 2028 Notes and Term Loan Credit Facility were $ 0.2 million and $ 0.3 million, respectively.

Index to Fin ancial Statements

The following table reflects future maturities of our outstanding debt for each of the next five years and thereafter.

These amounts exclude approximately $ 26.0 million in unamortized deferred financing costs, debt premium and discount, net:

Fiscal Year Amount

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2025 $ 140,200

2026 1,000,000

Thereafter 1,000,000

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(In thousands)

Operating cash flows from operating lease $ 45,366 $ 37,420

Operating cash flows from operating leases $ 39,247 $ 45,366

Right-of-use assets obtained in exchange for new operating lease liabilities $ 43,682 $ 5,189

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Weighted-average discount rate — operating leases 6.82 % 8.76 %

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The following table presents future minimum lease payments under operating leases:

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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 Consolidated Balance Sheet.

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

During 2024, 146,250 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.

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Upon Closing, the Company assumed certain Preferred Units that were issued and outstanding as of the Closing Date.

At the Closing, the Company assumed liabilities of $ 200.7 million related to mandatory redeemable Preferred Units and temporary equity of $ 462.7 million related to redeemable noncontrolling interest - Preferred Units Limited Partners.

At the Closing, the Company assumed liabilities of $ 200.7 million related to mandatorily redeemable Preferred Units and temporary equity of $ 462.7 million related to redeemable noncontrolling interest - Preferred Units Limited Partners.

During 2022, the Company redeemed all assumed Preferred Units from the Closing and recorded a gain on the redemption of mandatorily redeemable Preferred Units of $ 9.6 million and a gain on embedded derivative related to the redeemable noncontrolling interest - Preferred Units Limited Partners of $ 89.1 million.

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All Public Warrants and Private Placement Warrants expired on November 9, 2023.

The Company recorded favorable fair value adjustments of $ 0.1 million and $ 0.1 million in “Interest and other income” of the Consolidated Statements of Operations for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2024, there were 59.9 million and 97.8 million shares, respectively, of Class A Common Stock and Class C Common Stock issued and outstanding (collectively, “Common Stock”).

In addition, 7.7 million shares of Class C Common Stock will be issued as deferred consideration for the Durango Acquisition on July 1, 2025.

Index to Fin ancial Statements

Stock Repurchase Program

In February 2023, the Board of Directors (the “Board”) approved a stock repurchase program (“Repurchase Program”), authorizing discretionary purchases of the Company’s Class A Common Stock up to $ 100.0 million in the aggregate.

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Repurchases may be made at management’s discretion from time to time, in accordance with applicable securities laws, on the open market or through privately negotiated transactions and may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act.

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The repurchases will depend on market conditions and may be discontinued at any time without prior notice.

During the year ended December 31, 2024, the Company did no t repurchase any of its Class A Common Stock under the Repurchase Program.

During the year ended December 31, 2023, the Company repurchased 194,174 shares at a total cost of $ 5.8 million.

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Additionally, the Audit Committee resolved that for the calendar year 2023, 100 % of all distributions or dividends received by each Reinvestment Holder would be reinvested in newly issued shares of Class A Common Stock.

The Reinvestment Agreement will terminate automatically on March 8, 2024.

The Reinvestment Agreement automatically terminated on March 8, 2024.

As described in these 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.”

During 2023, the Company made cash dividend payments of $ 82.0 million to holders of Class A Common Stock and Common Units and $ 352.1 million was reinvested in shares of Class A Common Stock by each Reinvestment Holder.

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”).

During 2024 and 2023, the Company made cash dividend payments of $ 396.0 million and $ 82.0 million, respectively, to holders of Class A Common Stock and Common Units and $ 75.6 million and $ 352.1 million, respectively, was reinvested in shares of Class A Common Stock by each Reinvestment Holder.

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, excluding the Transaction, for periods prior to June 8, 2022 have been retrospectively restated in this Annual Report to reflect the Stock Split.

All corresponding per-share and share amounts, excluding the Altus Acquisition, for periods prior to June 8, 2022 have been retrospectively restated in this Annual Report to reflect the Stock Split.

Index to Fin ancial Statements

FAIR VALUE MEASUREMENTS

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Interest rate derivatives — 1,206 — 1,206

Contingent liabilities — — 4,700 4,700

Total liabilities $ — $ 11,948 $ 4,700 $ 16,648

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December 31, 2023

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Interest rate derivatives — 5,348 — 5,348

Public warrants 50 — — 50

Private warrants — — 38 38

Total liabilities $ — $ 7,097 $ — $ 7,097

Our derivative contracts consist of interest rate swaps and commodity swaps.

Valuation of these derivative contracts involved both observable publicly quoted prices and certain credit valuation inputs that may not be readily observable in the marketplace.

The valuation of these derivative contracts involved both observable publicly quoted prices and certain credit valuation inputs that may not be readily observable in the marketplace.

As such derivative contracts are classified as Level 2 in the hierarchy.

Refer to Note 13—Derivatives and Hedging Activities in the Notes to our Consolidated Financial Statements for further discussion related to commodity swaps and interest rate swaps.

Refer to Note 13—Derivatives and Hedging Activities in the Notes to our Consolidated Financial Statements in this Annual Report for further discussion related to commodity swaps and interest rate swaps.

The Company recorded a contingent liability related to the Kings Landing Earnout using Level 3 inputs, including projected spending and completion probability of the project.

Refer to Note 17 — Commitments and Contingencies in the Notes to our Consolidated Financial Statements in this Annual Report for further discussion related to Kings Landing Earnout contingent liability.

Long-term debt’s carrying value can vary from fair value.

See Note 8 —Debt and Financing Costs in the Notes to Consolidated Financial Statements for further information.

See Note 8—Debt and Financing Costs in the Notes to Consolidated Financial Statements in this Annual Report for further information.

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

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The Company did not elect to apply hedge accounting to these derivative contracts and recorded the fair value of the derivatives on the Consolidated Balance Sheets as of December 31, 2024 and 2023.

Index to Fin ancial Statements

Interest Rate Risk

4 unchanged sentences

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

In November 2022 and March 2023, the Company entered into three interest rate swap contracts with total notional amounts of $ 2.25 billion effective on May 1, 2023 and maturing on May 31, 2025.

Upon closing of the First Amendment of the Term Loan, the Company terminated one existing interest rate swap contract and partially terminated another in December 2023.

As of December 31, 2023, the Company had two interest rate swap contracts with total notional amounts of $ 1.70 billion maturing on May 31, 2025 that pay a fixed rate ranging from 4.38 % to 4.48 % for the respective notional amounts.

As of December 31, 2024, the Company had two interest rate swap contracts with total notional amounts of $ 1,700.0 million effective on May 1, 2023 and maturing on May 31, 2025 that pay a fixed rate ranging from 4.38 % to 4.48 % and four interest rate swap with a total notional amount of $ 300.0 million effective May 30, 2025 and maturing on December 31, 2025 that pays a fixed rate ranging from 3.02 % to 4.06 %.

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

Interest rate swap derivative assets were $ 4.3 million and $ 2.7 million as of December 31, 2023 and 2022, respectively.

Interest rate swap derivative liabilities were $ 5.3 million and $ 8.3 million as of December 31, 2023 and 2022, respectively.

The Company recorded cash settlements on interest rate swap derivatives of $ 12.7 million, $ 10.9 million and $( 2.9 ) million, for the years ended December 31, 2023, 2022 and 2021, respectively, in “Interest Expense” of the Consolidated Statements of Operations.

In addition, the Company recorded favorable fair value adjustments of $ 17.3 million,

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$ 7.9 million and $ 4.5 million for the years ended December 31, 2023, 2022 and 2021, respectively, in “Interest Expense” of the Consolidated Statements of Operations.

The following table presents the fair value of derivative assets and liabilities related to the interest rate swap contracts:

December 31 December 31

(In thousands)

Derivatives assets - current $ 504 $ 4,314

Total derivative assets $ 504 $ 4,314

Derivative liabilities - current 1,206 —

Derivatives liabilities - noncurrent — 5,348

Total derivative liabilities $ 1,206 $ 5,348

The Company recorded cash settlements and changes in fair value of the interest rate swap contracts in “Interest expense” of the Consolidated Statements of Operations.

The following table presents interest rate swap derivatives activities for the years ended December 31, 2024, 2023 and 2022:

For the Year Ended December 31,

2024 2023 2022

Realized gain on interest rate swaps $ 13,149 $ 12,651 $ 10,872

Favorable fair value adjustment $ 13,482 $ 17,270 $ 7,880

Commodity Price Risk

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Management regularly reviews the Company’s potential exposure to commodity price risk and manages exposure of such risk through commodity hedge contracts.

During 2023, the Company entered into multiple commodity swap contracts based on the OPIS NGL Mont Belvieu prices for ethane, propane and butane, the Waha Basis index and the NYMEX West Texas Intermediate Control index.

These contracts are on various notional quantities of NGLs, natural gas and crude.

During the past twelve months, the Company entered into multiple commodity swap contracts based on the OPIS NGL Mont Belvieu prices for ethane, propane and butane, the Waha Basis index, the HSC index and the NYMEX West Texas Intermediate Control index.

These contracts are for various notional quantities of NGLs, natural gas and crude.

Similarly, the Company has entered into various natural gas and crude basis spread swaps.

These contracts are effective over the next 1 to 17 months and are used to hedge against location price risk of the respective commodity resulting from supply and demand volatility and protect cash flows against price fluctuations.

Index to Fin ancial Statements

The table below presents detail information of commodity swaps outstanding as of December 31, 2024 (in thousands, except volumes):

6 unchanged sentences

Crude Collars Commodity Swap Bbl 145,400 468

Crude Basis Spread Swaps

Commodity Swap Bbl 132,000 ( 49 )

Natural Gas Basis Spread Swaps Commodity Swap MMBtus 5,440,000 ( 1,647 )

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

Commodity swap derivative assets were $ 3.7 million and $ 4.3 million as of December 31, 2023 and 2022, respectively.

Commodity swap derivative liabilities were $ 1.7 million and $ 5.7 million as of December 31, 2023 and 2022, respectively.

The Company recorded cash settlements on commodity swap derivatives of $ 13.1 million, $( 0.2 ) million and $( 16.5 ) million for the years ended December 31, 2023, 2022 and 2021, respectively, in “Product Revenue” of the Consolidated Statements of Operations.

In addition, the Company recorded favorable (unfavorable) fair value adjustments of $ 16.4 million, $( 1.4 ) million and $( 16.9 ) million for the years ended December 31, 2023, 2022 and 2021, respectively, in “Product Revenue” of the Consolidated Statements of Operations.

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

The following table presents the fair value of derivative assets and liabilities related to commodity swaps:

December 31 December 31

(In thousands)

Derivatives assets - current $ 1,804 $ 3,498

Derivative assets - noncurrent 65 165

Total derivative assets $ 1,869 $ 3,663

Derivative liabilities - current $ 8,805 $ 1,734

Derivatives liabilities - noncurrent 1,937 15

Total derivative liabilities $ 10,742 $ 1,749

The Company recorded cash settlements and fair value adjustments on commodity swap derivatives in “Product revenue” of the Consolidated Statements of Operations.

The following table presents commodity swap derivatives activities for the years ended December 31, 2024, 2023 and 2022:

For the Year Ended December 31,

2024 2023 2022

(In thousands)

Realized (loss) gain on commodity swaps $ ( 20,407 ) $ 13,056 $ ( 205 )

(Unfavorable) favorable fair value adjustment $ ( 31,195 ) $ 16,400 $ ( 1,429 )

SHARE-BASED COMPENSATION

Class A Shares and Class C Shares

Prior to the Closing, the Company issued incentive units, which included performance and service conditions, to certain employees and Board members.

The units consisted of Class A-1, Class A-2, and Class A-3 units.

Immediately upon Closing, all outstanding Class A-1 and Class A-2 units were cancelled and exchanged for 5,300,000 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 (pre Stock Split), that such limited partners received upon the Closing.

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 326,000 Class C Shares and will vest over four years .

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

These changes for all three

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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 stock price on the measurement date, which was the Closing Date of the Transaction.

The table below summarizes Class A Shares and Class C Shares activity for the year ended December 31, 2024:

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Weighted Avg Grant-Date Fair Market Value Per Unit

Outstanding and unvested shares at December 31, 2022

5,468,798 $ 28.92

Outstanding and unvested shares at December 31, 2023

5,444,488 $ 28.91

Table below summarizes aggregate intrinsic value (market value at vesting date) and grant-date fair value of vested Class A Shares for the years ended December 31, 2023 and 2022.

Outstanding and unvested units as of December 31, 2023 5,444,488 $ 28.91

Outstanding and unvested units as of December 31, 2024 5,399,730 $ 28.89

The table below summarizes aggregate intrinsic value (market value at vesting date) and grant-date fair value of vested Class A Shares for the years ended December 31, 2024 and 2023.

No vesting or forfeitures occurred for Class C Shares during 2024 or 2023.

Index to Fin ancial Statements

Year Ended December 31,

2 unchanged sentences

Grant-date fair value of vested Class A Shares

As of December 31, 2024, there were $ 27.5 million of unrecognized compensation costs related to unvested Class A Shares and Class C Shares.

These costs are expected to be recognized over a weighted average period of 1.03 years.

Restricted Stock Units

During 2023, pursuant to the Company’s 2019 Omnibus Compensation Plan, as amended from time to time, the Company granted (i) approximately 370,000 RSUs to employees that are scheduled to vest in full on January 1, 2026, subject to continued employment requirements, (ii) approximately 181,000 RSUs to employees in lieu of cash bonus awards that vested immediately upon grant and (iii) approximately 16,000 RSUs to certain members of the Board that vested immediately upon grant.

These RSUs are valued at their fair value at the date of grant.

RSUs were granted to certain executives and employees under the Kinetik Holdings Inc.

Amended and Restated 2019 Omnibus Compensation Plan (the “2019 Plan”) with various service vesting requirements.

Such RSUs may be settled only for shares of Class A Common Stock on a one-for-one basis, contingent upon continued employment.

The table below summarizes RSUs activity for the year ended December 31, 2024:

1 unchanged sentence

Weighted Avg Grant-Date Fair Market Value Per Unit (1)

Outstanding and unvested shares at December 31, 2022 110,490 $ 25.18

Outstanding and unvested units as of December 31, 2023 435,220 $ 31.15

Granted 770,227 39.83

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Forfeited 13,450 32.40

Outstanding and unvested shares at December 31, 2023 435,220 $ 31.15

(1) Number of shares and weighted average fair market value per share here include restricted share awards issued to new employees transitioned from ALTM as part of the merger.

Outstanding and unvested units as of December 31, 2024 698,595 $ 33.11

(1) The number of shares and weighted average fair market value per share here includes restricted share awards issued to new employees transitioned from ALTM as part of the merger.

The table below summarizes aggregate intrinsic value (market value at vesting date) and grant-date fair value of vested RSUs for the years ended December 31, 2024 and 2023.

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$ 20,667 $ 6,931

With respect to above Class A Shares, Class C Shares and RSUs, the Company recorded compensation expenses of $ 56.0 million, $ 42.8 million and nil in “General and administrative expenses” of the Consolidated Statements of Operations, for the years ended December 31, 2023, 2022 and 2021, 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 above incentive units, no compensation expense was recognized during 2021 as they were considered non-vested prior to their cancellation and exchange.

As of December 31, 2023,

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there were $ 73.0 million and $ 9.0 million of unrecognized compensation costs related to unvested Class A Shares and Class C Shares, and RSUs, respectively, and these costs are expected to be recognized over a weighted average period of 1.77 years and 1.97 years, respectively.

As of December 31, 2024, there were $ 10.4 million of unrecognized compensation costs related to unvested RSUs.

These costs are expected to be recognized over a weighted average period of 1.49 years.

Performance Stock Units

The Company granted PSUs pursuant to the 2019 Plan to certain of its employees and executives during 2024.

The fair value of the PSUs is determined using a Monte Carlo simulation at the grant date.

The Company recognized compensation expense for PSUs on a straight-line basis over the performance period.

Any PSU not earned at the end of the performance period will be forfeited.

Index to Fin ancial Statements

The table below summarizes PSU activities for the year ended December 31, 2024:

Number of Shares

Weighted Avg Grant-Date Fair Market Value Per Unit

Granted in 2024 198,703 $ 36.76

Outstanding and unvested units as of December 31, 2024 198,703 $ 36.76

No vesting or forfeiture occurred for PSUs for the year ended December 31, 2024.

The table below presents a summary of the grant-date fair value assumptions used to value the PSUs on the grant date:

Grant-date fair value per unit $ 36.76

Beginning average price

Risk-free interest rate 4.21 %

Volatility factor 37 %

Expected term

As of December 31, 2024, there were $ 5.2 million of unrecognized compensation costs related to the PSUs.

These costs are expected to be recognized over a weighted average period of 2.00 years.

With respect to above Class A Shares, Class C Shares, RSUs and PSUs, the Company recorded compensation expenses of $ 76.5 million, $ 56.0 million and $ 42.8 million in “General and administrative expenses” of the Consolidated Statements of Operations, for the years ended December 31, 2024, 2023 and 2022, respectively, based on a straight-line amortization of the associated awards’ fair value over the respective vesting life of the shares.

The total income tax provision consists of the following:

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Current income tax expense:

Federal $ 1,329 $ — $ —

State 2,203 492 522

3,532 492 522

Deferred tax (benefit) expense:

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Total $ 23,035 $ ( 232,908 ) $ 2,616

Index to Fin ancial Statements

The difference between the effective income tax rate and the U.S.

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statutory rate 21.00 % 21.00 %

21.00 % 21.00 %

Tax attributable to noncontrolling interest

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Effective rate 8.62 % ( 151.69 ) %

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

federal income tax for the year ended December 31, 2021.

The net deferred tax assets reflect the tax impact of temporary differences between the asset and liability amounts carried on the balance sheet under U.S.

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Other 2,705 849

Valuation allowance

— ( 219,730 )

Total deferred tax assets 203,996 235,627

2 unchanged sentences

16,761 13,244

Net deferred tax assets (liabilities)

Net deferred tax assets

$ 187,235 $ 222,383

1 unchanged sentence

For federal purposes, the Company has deferred tax assets related to (i) its investment in the Partnership and (ii) net operating losses (“NOLs”) with no expiration date.

The Company has evaluated all positive and negative evidence to conclude

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that it is more likely than not that such deferred tax assets will be realized.

As of December 31, 2024, embedded in the investment in partnership deferred tax asset is approximately $ 21.3 million related to the carryover of interest expense limitation under IRC 163(j).

The carryover for the interest expense limitation has no expiration.

The Company has evaluated all positive and negative evidence to conclude that it is more likely than not that such deferred tax assets will be realized.

This determination was based, in part, on the fact that the Company achieved a three-year cumulative position of profitability as of December 31, 2024.

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Internal Revenue Code (“IRC”) Section 382 addresses company ownership changes and specifically limits the utilization of certain deductions and other tax attributes on an annual basis following an ownership change.

The Company experienced an ownership change within the meaning of IRC Section 382 during 2022 (prior to the closing of the Transaction) that subjected certain of the Company’s tax attributes, including NOLs, to an IRC Section 382 limitation.

The Company experienced ownership changes within the meaning of IRC Section 382 that subjected certain of the Company's tax attributes, including NOLs, to an IRC Section 382 limitation.

Subsequent ownership changes could further impact the limitation in future years.

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The Company had no uncertain tax position as of December 31, 2024 and 2023.

Index to Fin ancial Statements

The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense.

2 unchanged sentences

NET INCOME PER SHARE

Basic earning per share (“EPS”) is computed by dividing net income attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period.

EPS is computed by dividing net income attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period.

Diluted EPS is computed by dividing net income attributable to the Company by the weighted average number of shares of common stock outstanding and the assumed issuance of all potentially dilutive securities.

3 unchanged sentences

Under the if-converted method, dilutive Common Units are assumed to be exchanged from the date of the issuance and the resulting shares of Class A Common Stock are included in the denominator of the diluted EPS calculation for the period being presented.

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

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Weighted average shares outstanding - diluted

60,115 146,197 41,665

Net income available per common share - basic $ 1.03 $ 5.25 $ 1.47

Net income available per common share - diluted $ 1.02 $ 2.52 $ 1.47

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

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

(2) Represented excess of carrying value of redeemable noncontrolling interest Preferred Units over redemption price at redemption.

(3) The effect of an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for the years ended December 31, 2024 and 2022.

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

Refer to Note 11—Equity and Warrants in the Notes to our Consolidated Financial Statements for further information.

(4) The effect of an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for the year ended December 31, 2022.

(5) Weighted average Class A common shares have been retrospectively restated due to bonus effect of Class A common shares issued under the Reinvestment Agreement for all periods presented in which the Class A common shares were outstanding.

Further discussion of the Company’s outstanding common stock, warrants, Preferred Units and any applicable redemption rights is provided in Note 11—Equity and Warrants in the Notes to our Consolidated Financial Statements.

Refer to Note 11—Equity and Warrants in the Notes to our Consolidated Financial Statements in this Annual Report for further information.

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

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

As of December 31, 2024 and 2023, there were no accruals for loss contingencies.

Index to Fin ancial Statements

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

3 unchanged sentences

Thus, the Company’s exposure and ultimate losses may be higher, and possibly significantly more, than the amounts accrued.

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The Company has entered into litigation with two third parties to collect outstanding receivables totaling $ 19.6 million that remain outstanding from the Winter Storm Uri during February of 2021.

The Company has entered into litigation with a third party to collect receivables totaling $ 11.6 million and is waiting on settlement of $ 8.0 million in outstanding vendor credits from another counterparty related to prior litigation the Company had previously entered into and subsequently dropped.

These amounts remain outstanding from the Winter Storm Uri during February of 2021.

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 December 31, 2023, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity.

The Company is subject to various local, state, and federal laws and regulations relating to various environmental matters during the ordinary course of business.

Although we believe our operations are in substantial compliance with applicable environmental laws and relations, risks of additional costs and liabilities are inherent in our operations.

Moreover, changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly requirements could require the Company to make significant expenditures to attain and maintain compliance or may otherwise have a material adverse effect on its operations, competitive position, or financial condition.

As of the Durango Closing Date, the Company became a potential responsible party to certain potential civil penalties related to excess emission violations of certain gas plants and compressor stations acquired.

The Company estimated a liability of $ 24.0 million based on information related to the alleged violations available as of the Durango Closing Date and December 31, 2024.

Contingent Liabilities

Durango Acquisition

On June 24, 2024, the Company consummated the previously announced Durango Acquisition.

Pursuant to the Durango MIPA, Durango Seller is entitled to an earn out of up to $ 75.0 million in cash contingent upon the completion of the Kings Landing Project and placing it into service in Eddy County, New Mexico.

This earn out is subject to reduction based on actual capital costs associated with the Kings Landing Project.

Upon Closing, the Company evaluated the earn-out consideration classification in accordance with ASC 480.

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

As of Closing, the Company recorded an initial contingent liability of $ 64.0 million and further reduced such contingent liability through a measurement period adjustment of $ 59.5 million, based on information available as of the Durango Acquisition Date, but obtained subsequent thereto.

The earn-out liability is a function of the present value of projected spend as evaluated using a weighted probability model.

Pursuant to ASC 805, the Company also recorded a fair value adjustment of $ 0.2 million within “Costs of sales (exclusive of depreciation and amortization)” of the Consolidated Statement of Operations for the year ended December 31, 2024.

The contingent liability associated with the Kings Landing Project of $ 4.7 million was included in “Other current liabilities” of the Consolidated Balance Sheet as of December 31, 2024.

2019 PDC Acquisition

1 unchanged sentence

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.

Amounts are payable on an annual basis over the earn-out period.

The fair value of the contingent liability recognized on the acquisition date of $ 3.9 million was estimated utilizing the following key assumptions:

(1) present value factors based on the Company’s weighted-average cost of capital, 2) a probability weighted payout based on an estimate of future volumes and (3) a discount period consistent with the arrangement’s life and the respective due dates of the potential future payments.

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

The Company did not expect PDC’s actual annual Mcf volume amounts to exceed forecasted amounts during the remaining measurement periods as of December 31, 2023 and 2022;

therefore, the estimated fair value of the contingent consideration liability was nil as of each date.

Original Altus Transaction

As part of the Transaction, the Company assumed contingent liabilities of $ 4.5 million related to earn-out consideration of up to 2,500,000 shares of Class A Common Stock, which was part of the original ALTM transaction.

The earn-out consideration expired with no value on November 9, 2023.

Pursuant to ASC 805, this earn-out consideration was a pre-existing contingency and accounted for as an assumed liability to the acquirer on the acquisition date.

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 equity based on the settlement provision.

The total monies paid under this arrangement are capped at $ 60.5 million and are payable on an annual basis over the earn-out period.

PDC’s actual annual Mcf volume did not exceed the incentive forecast volume during the past five years and is not expected to over the next five years ;

therefore, the estimated fair value of the contingent consideration liability was nil as of December 31, 2024 and 2023.

Index to Fin ancial Statements

Letters of Credit

Our Revolving Credit Facility maturing on June 8, 2027, can be used for letters of credit.

Our obligations with respect to related letters of credit totaled $ 12.6 million and nil as of December 31, 2023 and 2022, respectively.

Our obligations with respect to related letters of credit totaled $ 12.6 million and $ 12.6 million as of December 31, 2024 and 2023, respectively.

RELATED PARTY TRANSACTIONS

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FASB ASC 850, Related Party Transactions (“Topic 850”), requires that transactions with related parties that would make a difference in decision making shall be disclosed so that users of the financial statements can evaluate their significance.

Upon the Closing of the Transaction on February 22, 2022, the following shareholders own more than 10 % of the Company’s issued and outstanding Common Stock:

BCP Raptor Aggregator, LP, Blackstone Management Partners, LLC, BX Permian Pipeline Aggregator LP, Buzzard Midstream LLC and Apache Midstream LLC (“Apache Midstream”).

Upon closing of the Altus Acquisition, the Company had the following shareholders that owned more than 10 % of the Company’s issued and outstanding Common Stock:

BCP Raptor Aggregator, LP, Blackstone Management Partners, LLC, BX Permian Pipeline Aggregator LP, Buzzard Midstream LLC and Apache Midstream LLC (“Apache”).

Out of these affiliates, the Company has product and service revenue contracts and operating expense contracts with Apache Midstream.

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Index to Financial Statements

addition, Apache Midstream acquired Titus Oil and Gas, LLC (“Titus”) in October 2022, at which time Titus became a related party.

Furthermore, in December 2023, Apache entered into an Underwriting Agreement to sell 7,475,000 shares of the Company’s Class A Common Stock in a secondary offering.

Apache owned less than 10 % of the Company’s issued and outstanding Common Stock after the sale.

Also, upon Closing of the Transaction, the Company acquired initial equity interests in Breviloba, GCX and EPIC, and an additional equity interest in PHP.

In addition, Apache acquired Titus Oil and Gas, LLC (“Titus”) in October 2022, at which time Titus became a related party.

Through secondary offerings completed in December 2023 and March 2024, Apache sold all of the Company’s Class A Common Stock it owned.

Pursuant to ASC 850, Apache was no longer a related party after the completion of its secondary offering in December 2023 as it owned less than 10 % of the Company’s common stock.

Pursuant to Regulation S-K, Item 404(a), Apache ceased to be a related party as of March 18, 2024 as it no longer owned any of the Company’s common stock.

The Company also has equity interests in PHP, Breviloba and EPIC as of December 31, 2024.

Investments in these EMIs are accounted for using the equity investment method and are considered unconsolidated affiliates.

4 unchanged sentences

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

Apache Midstream, Titus, GCX, EPIC and Breviloba were not considered related parties during 2021.

For the Year Ended December 31,

2023 2022 2021

(In thousands)

2 unchanged sentences

Cost of sales $ 58,496 $ 59,118 $ 39,304

As of December 31, 2023, accounts receivable due from Apache Midstream and Titus totaled $ 15.8 million and immaterial accounts payable were due to Apache Midstream or Titus.

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

As of December 31, 2024, the Company had no accounts receivable or accounts payable due from or to related parties.

As of December 31, 2023, accounts receivable from Apache Midstream and Titus totaled $ 15.8 million and immaterial accounts payable were due to Apache Midstream and Titus.

As of December 31, 2023 and 2022, No accounts receivable or payable were due from or to PHP or Breviloba.

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 CODM to make key operating decisions, assess performance and allocate resources.

5 unchanged sentences

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

Index to Fin ancial Statements

• Pipeline Transportation:

The Pipeline Transportation segment consists of equity investment interests in four Permian Basin pipelines that access various points along the U.S.

Gulf Coast, Kinetik NGL Pipelines and Delaware Link Pipeline.

The Pipeline Transportation segment consists of equity investment interests in three Permian Basin pipelines that access various points along the U.S.

Gulf Coast, Kinetik NGL Pipeline and Delaware Link Pipeline.

The current operating pipelines transport crude oil, natural gas and NGLs.

Our Chief Executive Officer, who is the CODM, uses segment adjusted EBITDA to measure profitability and allocate resources among segments.

Segment Adjusted EBITDA is defined as segment net earnings adjusted to exclude interest expense, income tax expense, depreciation and amortization, the proportionate effect of these same items for our EMI pipelines and other non-recurring items.

The CODM considers budget-to-actual and forecast-to-actual variances on a monthly basis when making decisions about allocating capital and personnel to the segments.

Our Chief Executive Officer, who is the CODM, uses segment net income or loss including noncontrolling interests adjusted for taxes, depreciation and amortization, gain or loss on disposal of assets, the proportionate EBITDA from our EMI pipelines, equity income and gain from sale of investments recorded using the equity method, noncash increases and decreases related to hedging activities, fair value adjustments for contingent liabilities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges (“Segment Adjusted EBITDA”) to access performance of each operating segment.

For both segments, the CODM uses Segment Adjusted EBITDA to allocate resources.

The CODM considers budget-to-actual and forecast-to-actual variances on a monthly basis for both measures when making decisions about allocating capital and personnel to the segments.

The Midstream Logistics segment accounts for more than 98 % of the Company’s operating revenues, cost of sales (excluding depreciation and amortization), operating expenses and ad valorem expenses.

The Pipeline Transportation segment contains all of the Company’s EMIs, which contribute more than 98 % of the segment’s adjusted EBITDA.

Corporate and Other contains the Company’s executive and administrative functions, including 81 % of the Company’s general and administrative expenses and all of the Company’s debt service costs.

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Index to Financial Statements

The following tables present the reconciliation of the segment profit measures for the years ended December 31, 2023, 2022 and 2021:

The Pipeline Transportation segment contains all of the Company’s equity method investments, which contribute more than 91 % of the Segment’s Adjusted EBITDA.

Corporate and Other contains the Company’s executive and administrative functions, including 84 % of the Company’s general and administrative expenses and all of the Company’s stock compensation and debt service costs.

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

The following tables present the Segment Adjusted EBITDA of the Company’s reportable segments and reconciliations of the segment profits to consolidated income before income tax expenses for the years ended December 31, 2024, 2023 and 2022:

Index to Fin ancial Statements

Midstream Logistics Pipeline Transportation Corporate and Other (1)

1 unchanged sentence

(In thousands)

Segment income (loss) before income taxes

Revenue $ 1,461,898 $ 9,088 $ — $ — $ 1,470,986

Other revenue 11,652 291 — — 11,943

Intersegment revenue (2)

— 26,099 — ( 26,099 ) —

Interest expense

Total segment operating revenue 1,473,550 35,478 — ( 26,099 ) 1,482,929

Costs of sales (excluding depreciation and amortization expense)

( 620,617 ) ( 1 ) — — ( 620,618 )

Depreciation and amortization 275,568 5,395 23 280,986

Intersegment cost of sales

( 26,099 ) — — 26,099 —

Operating expenses (3)

( 217,780 ) ( 2,904 ) — — ( 220,684 )

General and administrative expenses ( 19,623 ) ( 1,689 ) ( 112,845 ) — ( 134,157 )

Proportionate EMI EBITDA — 346,666 — — 346,666

Other segment items (4)

25,452 — 91,530 116,982

Segment Adjusted EBITDA (5)

$ 614,883 $ 377,550 $ ( 21,315 ) $ — $ 971,118

Reconciliation of Segment Adjusted EBITDA to income before income taxes

Segment Adjusted EBITDA (5)

$ 614,883 $ 377,550 $ ( 21,315 ) $ — $ 971,118

Other interest income — — 1,988 — 1,988

Gain on sale of equity method investment — 89,802 — — 89,802

Equity in earnings of unconsolidated affiliates — 213,191 — — 213,191

Interest expense 81 — 217,154 — 217,235

Depreciation and amortization expenses 314,970 9,204 23 — 324,197

Contract assets amortization

6,621 — — — 6,621

Proportionate EMI EBITDA — 346,666 — — 346,666

Share-based compensation

Loss on disposal of assets

— — 76,536 — 76,536

Loss on debt extinguishment

Loss on disposal of assets, net 4,040 — — — 4,040

Commodity hedging unrealized loss

10,788 — — — 10,788

Loss on debt extinguishment — — 525 — 525

Contingent liabilities fair value adjustment 200 — — — 200

Integration costs 2,110 — 3,716 — 5,826

Transaction costs 33 — 615 648

Other one-time costs or amortization 5,996 — 5,905 11,901

Interest income

Warrant valuation adjustment — — 88 88

Unrealized gain on derivatives 4,291 — — 4,291

Equity income from unconsolidated affiliates — 200,015 — 200,015

Segment adjusted EBITDA (3)

Acquisition transaction costs — — 4,096 — 4,096

Other one-time costs and amortization

4,919 — 7,182 — 12,101

Income (loss) before income taxes

$ 271,154 $ 324,673 $ ( 328,559 ) $ — $ 267,268

Index to Fin ancial Statements

Midstream Logistics Pipeline Transportation Corporate and Other (1)

Consolidated (2)

For the year ended December 31, 2022 (In thousands)

Segment income (loss) before income taxes

For the year ended December 31, 2023

(In thousands)

Revenue $ 1,236,304 $ 3,857 $ — $ — $ 1,240,161

Other revenue 13,343 2,908 — — 16,251

Intersegment revenue (2)

— 1,678 — ( 1,678 ) —

Interest expense (income) 47,419 ( 664 ) 102,497 149,252

Depreciation and amortization 259,318 1,016 11 260,345

Total segment operating revenue 1,249,647 8,443 — ( 1,678 ) 1,256,412

Costs of sales (excluding depreciation and amortization expense) ( 514,035 ) ( 1,686 ) — ( 515,721 )

Intersegment cost of sales

( 1,678 ) — — 1,678 —

Operating expenses (3)

( 182,684 ) ( 458 ) — — ( 183,142 )

General and administrative expenses ( 17,216 ) ( 1,265 ) ( 79,425 ) — ( 97,906 )

Proportionate EMI EBITDA — 306,072 — — 306,072

Other segment items (4)

9,156 — 63,959 — 73,115

Segment Adjusted EBITDA (5)

$ 543,190 $ 311,106 $ ( 15,466 ) $ — $ 838,830

Reconciliation of Segment Adjusted EBITDA to income before income taxes

Segment Adjusted EBITDA (5)

$ 543,190 $ 311,106 $ ( 15,466 ) $ — $ 838,830

Other interest income — — 677 — 677

Warrant valuation adjustment — — 88 — 88

Commodity hedging unrealized gain 4,291 — — — 4,291

Equity in earnings of unconsolidated affiliates — 200,015 — — 200,015

Interest expense 47 — 205,807 — 205,854

Depreciation and amortization expenses 275,568 5,395 23 — 280,986

Contract assets amortization

6,620 — — — 6,620

Proportionate EMI EBITDA — 306,072 — — 306,072

Share-based compensation

Loss (gain) on disposal of assets 12,645 — ( 34 ) 12,611

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

— — 55,983 — 55,983

Loss on disposal of assets, net 19,402 — — — 19,402

Loss on debt extinguishment — — 1,876 — 1,876

Integration costs 59 — 956 — 1,015

Acquisition transaction costs 33 — 615 — 648

Other one-time costs or amortization 14,137 4 2,214 16,355

Warrant valuation adjustment — — 133 133

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

Gain on embedded derivative — — 89,050 89,050

Equity income from unconsolidated affiliates — 180,956 — 180,956

Segment adjusted EBITDA (3)

Other one-time costs and amortization

5,996 — 5,905 — 11,901

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Index to Financial Statements

Income (loss) before income taxes

$ 239,756 $ 199,654 $ ( 285,866 ) $ — $ 153,544

Index to Fin ancial Statements

Midstream Logistics Pipeline Transportation Corporate and Other (1)

2 unchanged sentences

(In thousands)

Segment income (loss) before income taxes

Revenue $ 1,198,474 $ 1,833 $ — $ 1,200,307

Other revenue 13,175 8 — 13,183

Total segment operating revenue 1,211,649 1,841 — 1,213,490

Costs of sales (excluding depreciation and amortization expense) ( 541,518 ) — — ( 541,518 )

Operating expenses (3)

( 153,456 ) ( 239 ) ( 564 ) ( 154,259 )

General and administrative expenses ( 18,155 ) ( 1,288 ) ( 74,825 ) ( 94,268 )

Proportionate EMI EBITDA — 268,826 — 268,826

Other segment items (4)

17,525 97 62,296 79,918

Segment Adjusted EBITDA (5)

$ 516,045 $ 269,237 $ ( 13,093 ) $ 772,189

Reconciliation of segment adjusted EBITDA to income before income taxes

Segment Adjusted EBITDA (5)

$ 516,045 $ 269,237 $ ( 13,093 ) $ 772,189

Warrant valuation adjustment — — 133 133

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

Gain on embedded derivative — — 89,050 89,050

Equity in earnings of unconsolidated affiliates — 180,956 — 180,956

Interest expense 47,419 ( 664 ) 102,497 149,252

Depreciation and amortization 243,045 513 — 243,558

Depreciation and amortization expenses 259,318 1,016 11 260,345

Contract assets amortization

1,807 — — 1,807

Proportionate EMI EBITDA — 268,826 — 268,826

Loss on disposal of assets 359 23 — 382

Derivatives loss due to Winter Storm Uri 13,456 — — 13,456

Share-based compensation

— — 42,780 42,780

Loss (gain) on disposal of assets

12,645 — ( 34 ) 12,611

Loss (gain) on debt extinguishment

27,983 ( 8 ) — 27,975

Integration costs 1,314 93 10,801 12,208

Acquisition transaction costs 9 — 6,403 6,412

Other one-time costs or amortization 2,494 182 180 2,856

Producer settlement 6,827 — — 6,827

Interest income 115 — — 115

Equity income from unconsolidated affiliates — 63,074 — 63,074

Gain on debt extinguishment 4 — — 4

Segment adjusted EBITDA (3)

Other one-time costs and amortization

14,137 4 2,214 16,355

Income (loss) before income taxes

$ 151,413 $ 180,926 $ ( 79,002 ) $ 253,337

(1) Corporate and Other represents those results that:

2 unchanged sentences

Items included here to reconcile operating segments profit and loss with the Company’s consolidated profit and loss.

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

Refer to Note 1 —Description of Business and Basis of Presentation in the Notes to our Consolidated Financial Statements in this Annual Report, for further information on the Company’s basis of presentation.

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

Intersegment revenue is eliminated at consolidation.

(3) Operating expenses includes ad valorem taxes.

(4) Other segment items include other income related to sales tax refund, proceeds from insurance claims and legal settlements, and warrants fair value adjustments, share-based compensation, and one-time or nonrecurring cost adjustments related to amortization of contract costs, commodity hedging unrealized (gain)/loss, contingent liabilities fair value adjustment, integration costs, acquisition transaction costs and other one-time cost or amortization.

(5) Segment adjusted EBITDA is a non-GAAP measure;

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Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report, for a definition and reconciliation to the GAAP measure.

The following tables present the revenue for the individual operating segment for the years ended December 31, 2023, 2022 and 2021:

Midstream Logistics Pipeline Transportation Elimination

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

Index to Fin ancial Statements

The following tables present supplemental segment information that are not included in the segment profit measurements above for the years ended December 31, 2024, 2023 and 2022:

Midstream Logistics Pipeline Transportation Corporate and Other (1)

For the year ended December 31, 2024

(In thousands)

$ 1,236,304 $ 3,857 $ — $ 1,240,161

Other revenue

Income tax expenses

$ — $ — $ 23,035 $ 23,035

Intersegment revenue (1)

Segment assets (2)

4,326,954 2,270,403 217,580 6,814,937

Total segment operating revenue $ 1,249,647 $ 8,443 $ ( 1,678 ) $ 1,256,412

Midstream Logistics Pipeline Transportation Consolidated (2)

For the year ended December 31, 2022

(In thousands)

Revenue $ 1,198,474 $ 1,833 $ 1,200,307

Other revenue 13,175 8 13,183

Total segment operating revenue

Total capital expenditures (3)

273,783 2,080 10 275,873

Midstream Logistics Pipeline Transportation Consolidated (2)

For the year ended December 31, 2021

(In thousands)

Revenue $ 658,299 $ — $ 658,299

Other revenue 3,737 8 3,745

Total segment operating revenue

Midstream Logistics Pipeline Transportation Corporate and Other (1)

For the year ended December 31, 2023 (In thousands)

Income tax benefit

$ — $ — $ ( 232,908 ) $ ( 232,908 )

(1) The Company accounts for intersegment sales at market prices, while it accounts for asset transfers at book value.

Intersegment revenue is eliminated at consolidation.

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

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Index to Financial Statements

The following table presents total capital expenditures, including property, plant and equipment and intangible assets, for each operating segment:

For the Year Ended December 31,

Segment assets (2)

3,772,764 2,703,588 20,521 6,496,873

(In thousands)

Midstream Logistics $ 234,879 $ 195,346 $ 82,662

Pipeline Transportation 94,675 26,233 50

Total capital expenditures (3)

234,879 94,675 — 329,554

(1) Excludes contributions to the Company’s EMIs.

The following table presents total assets for each operating segment:

(In thousands)

Midstream Logistics $ 3,772,764 $ 3,486,948

Pipeline Transportation (1)

Midstream Logistics Pipeline Transportation Corporate and Other (1)

For the year ended December 31, 2022 (In thousands)

Income tax expenses

$ — $ — $ 2,616 $ 2,616

Segment total assets 6,476,352 5,901,777

Corporate and other 20,521 17,934

Total assets $ 6,496,873 $ 5,919,711

(1) Includes investment in unconsolidated affiliates of $ 2,541.0 million and $ 2,381.3 million as of December 31, 2023 and 2022, respectively.

Segment assets (2)

3,486,948 2,414,829 17,934 5,919,711

Total capital expenditures (3)

195,346 26,233 — 221,579

(1) Corporate and Other represents those results that:

(i) are not specifically attributable to an operating segment;

(ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

(2) Pipeline Transportation includes investment in unconsolidated affiliates of $ 2.12 billion, $ 2.54 billion and $ 2.38 billion as of December 31, 2024, 2023 and 2022, respectively.

(3) Excludes contributions, acquisition and divestiture of equity interest in the Company’s EMIs included in Pipeline Transportation segment assets.

See Note 7 —Equity Method Invest ments in the Notes to our Consolidated Financial Statements in this Annual Report for additional information.

SUBSEQUENT EVENTS

On January 23, 2024, 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 of record as of February 22, 2024 on March 7, 2024.

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, which will be payable on March 7, 2024.

Reinvestment Holders will reinvest 100 % of dividends received on Class A Common Stock and Common Units based on the Reinvestment Agreement.

On January 14, 2025, the Company consummated the previously announced transaction contemplated by the definitive agreement with Permian Resources Corporation (“Permian Resources”) to acquire certain natural gas and crude oil gathering systems assets, primarily located in Reeves County, Texas, for approximately $ 178.4 million of cash consideration (“Permian Resources Midstream Acquisition”).

We are currently evaluating the Permian Resources Midstream Acquisition and have not completed the purchase accounting.

On January 22, 2025, the Board declared a cash dividend of $ 0.78 per share on the Company’s Class A Common Stock which was paid to stockholders of record as of February 3, 2025, on February 12, 2025.

The Company, through its ownership of the general partner of the Partnership, declared a distribution of $ 0.78 per Common Unit from the Partnership to the holders of Common Units, which was paid on February 12, 2025.

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-K

Item 9A. Controls and Procedures