Kinetik Holdings Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures The Company’s Chief Executive Officer, President and Director, in his capacity as principal executive officer, and the Company’s Executive Vice President, Chief Accounting and Chief Administrative Officer, in his capacity as principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) or 15d-15(e)) as of December 31, 2024, the end of the period covered by this Annual Report. Based on that evaluation and as of the date of that evaluation, these officers concluded that the Company’s disclosure controls and procedures were effective, providing effective means to ensure that the information the Company is required to disclose under applicable laws and regulations is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms and accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The Company periodically reviews the design and effectiveness of its disclosure controls, including compliance with various laws and regulations that apply to operations. 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 Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. The Management’s Report on Internal Control Over Financial Reporting is included on page F-1 in Part IV, Item 15 of this Annual Report and is incorporated herein by reference. Management concluded that our internal control over financial reporting was effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by KPMG LLP, an independent registered public accounting firm. See Attestation Report of Independent Registered Public Accounting Firm under Part IV, Item 15 of this Annual Report. Changes in Internal Control Over Financial Reporting There were no changes in the Company’s internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting. ITEM 9B. OTHER INFORMATION 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 45 Table of Contents 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. Mr. 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. Mr. Carpenter has also agreed to customary confidentiality restrictions and restrictive covenants within the Consulting Agreement. Trading Arrangements During the three months ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted , terminated or modified a “Rule 10b5-1 trading arrangement” or non-Rule 10b5-1 trading arrangement (as each term is defined in Item 408 of Regulation S-K). Disclosure pursuant to Section 13(r) of the Exchange Act Pursuant to Section 13(r) of the Exchange Act, we may be required to disclose in our annual and quarterly reports to the SEC whether we or any of our “affiliates” knowingly engaged in certain activities, transactions or dealings relating to Iran or with certain individuals or entities targeted by U.S. economic sanctions. Disclosure is generally required even where the activities, transactions or dealings were conducted in compliance with applicable law. Because the SEC defines the term “affiliate” broadly, it includes any entity under common “control” with us (and the term “control” is also construed broadly by the SEC). The description of the activities below has been provided to us by Blackstone, affiliates of which: (i) beneficially own more than 10% of our outstanding common stock and are members of our Board, and (ii) hold a minority non-controlling interest in Mundys S.p.A. (formerly Atlantia S.p.A). Mundys S.p.A may therefore be deemed to be under common “control” with us; however, this statement is not meant to be an admission that common control exists. The disclosure below relates solely to activities conducted by Mundys S.p.A. The disclosure does not relate to any activities conducted by us or by Blackstone and does not involve our or Blackstone’s management. Neither we nor Blackstone has had any involvement in or control over the disclosed activities, and neither we nor Blackstone has independently verified or participated in the preparation of the disclosure. Neither we nor Blackstone is representing as to the accuracy or completeness of the disclosure nor do we or Blackstone undertake any obligation to correct or update it. We understand that Blackstone disclosed the following in its Annual Report, filed with the SEC on February 28, 2025: Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934. Funds affiliated with Blackstone first invested in Mundys S.p.A. on November 18, 2022 in connection with the voluntary public tender offer by Schema Alfa S.p.A. for all of the shares of Mundys S.p.A., pursuant to which such funds obtained a minority non-controlling interest in Mundys S.p.A. Mundys S.p.A. owns and controls Aeroporti di Roma S.p.A. (“ADR”), an operator of airports in Italy including Leonardo da Vinci-Fiumicino Airport. Iran Air has historically operated periodic flights to and from Leonardo da Vinci-Fiumicino Airport as authorized, from time to time, by an aviation-related bilateral agreement between Italy and Iran, scheduled in compliance with European Regulation 95/93, and approved by the Italian Civil Aviation Authority. ADR, as airport operator, is under a mandatory obligation to provide airport services to all air carriers (including Iran Air) authorized by the applicable Italian authority. The relevant turnover attributable to these activities (whose consideration is calculated on the basis of general tariffs determined by such independent Italian authority) in the fiscal year ended December 31, 2024 was less than €210,000. Mundys S.p.A. does not track profits specifically attributable to these activities. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 46 Table of Contents Index to Financial Statements PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information set forth under the captions “Election of Directors” and “Information About Our Executive Officers” in the proxy statement relating to the Company’s 2024 Annual Meeting of Stockholders (the “Proxy Statement”), which will be filed no later than 120 days after December 31, 2024, is incorporated herein by reference. Code of Ethics 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 (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. ITEM 11. EXECUTIVE COMPENSATION The information set forth under the caption “Executive Compensation” in the Proxy Statement is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information set forth under the captions “Securities Ownership and Principal Holders,” “Securities Authorized for Issuance Under Equity Compensation Plans,” and “Delinquent Section 16(a) Reports” (if such a caption is included) in the Proxy Statement is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE See Note 18—Related Party Transactions in the Notes to the Company’s Consolidated Financial Statements, under Part IV—Item 15. Exhibits, Financial Statement Schedule s, for information regarding related party transactions. The information set forth under the captions “Certain Business Relationships and Transactions” and “Director Independence” in the Proxy Statement is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information set forth under the caption “Ratification of the Appointment of Independent Auditor” in the Proxy Statement is incorporated herein by reference. 47 Table of Contents Index to Financial Statements PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) Documents included in this Annual Report: 1. Financial Statements Report of Management on Internal Control Over Financial Reporting F- 1 Reports of Independent Registered Public Accounting Firm (PCAOB ID: 185 ) F- 2 Report of Independent Registered Public Accounting Firm (PCAOB ID: 185) F-4 Consolidated Statements of Operations for the Years Ended December 31, 202 4 , 202 3 , and 202 2 F- 5 Consolidated Balance Sheets at December 31, 202 4 and 202 3 F- 6 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 4 , 202 3 , and 202 2 F- 7 Statements of Consolidated Changes in Equity and Noncontrolling Interests for the Years Ended December 31, 202 4 , 202 3 , and 202 2 F- 9 Notes to Consolidated Financial Statements 1. Description of Business and Basis of Presentation F- 12 2. Summary of Significant Accounting Policies F- 13 3. Business Combination F- 22 4. Revenue Recognition F- 25 5. Property, Plant, and Equipment, Net F- 26 6. Intangible Assets, Net F- 27 7. Equity Method Investments F- 27 8. Debt and Financing Costs F- 29 9. Accrued Expenses F- 33 10. Leases F- 33 11. Equity and Warrants F- 34 12. Fair Value Measurements F- 36 13. Derivatives and Hedging Activities F- 36 14. Share-Based Compensation F- 38 15. Income Taxes F- 40 16. Net Income Per Share F- 42 17. Commitments and Contingencies F- 42 18. Related Party Transactions F- 44 19. Segments F- 44 20. Subsequent Events F- 49 2. Financial Statement Schedules Financial statement schedules have been omitted because they are either not required, not applicable or the information required to be presented is included in the Company’s consolidated financial statements and related notes. Pursuant to Rule 3-09 of Regulation S-X, the audited financial statements of Permian Highway Pipeline LLC, which is an equity method investment of the Company, is included in this Annual Report as Exhibit 99.1 48 Table of Contents Index to Financial Statements 3. Exhibits EXHIBIT NO. DESCRIPTION 2.1*** – Contribution Agreement, dated October 21, 2021, by and among Altus Midstream Company, Altus Midstream LP, New BCP Raptor Holdco, LLC, and BCP Raptor Holdco, LP (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on October 21, 2021). 3.1 – Third Amended and Restated Certificate of Incorporation of Kinetik Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 2 8 , 2022). 3.2 Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of Kinetik Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 2, 2023). 3.3 – Amended and Restated Bylaws of Kinetik Holdings Inc. (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 (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. (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on February 2 8 , 2022). 4.3 – Second Amended and Restated Registration Rights Agreement, dated February 22, 2022, by and among Altus Midstream Company, Apache Midstream LLC, Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC and the other holders party thereto. (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on February 2 8 , 2022). 4.4 – Indenture, dated June 8, 2022, by and among Kinetik Holdings Inc., Kinetik Holdings LP, as issuer. and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on June 14, 2022). 4.5 – Form of 5.875% Sustainability-Linked Senior Notes (included in Exhibit 4.3) (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on June 14, 2022). 4.6 – Indenture, dated December 6, 2023, by and among Kinetik Holdings Inc., Kinetik Holdings LP and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on December 6, 2023). 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 . (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 22, 2022). 10.2† – Altus Midstream Company Restricted Stock Units Plan, dated December 31, 2018 (incorporated by reference to Exhibit 10.19 of the Company’s Annual Report on Form 10-K for year ended December 31, 2018, SEC File No. 001-38048). 10.3† – Form of Director Grant Agreement, dated December 17, 2018 (incorporated by reference to Exhibit 10.20 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, SEC File No. 001-38048). 10.4† – Altus Midstream Company 2019 Omnibus Compensation Plan, dated February 12, 2019, effective May 30, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 31, 2019, SEC File No. 001-38048). 10.5† – Altus Midstream Company Deferred Delivery Plan, dated May 30, 2019 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 31, 2019, SEC File No. 001-38048). 10.6† – Kinetik Holdings Inc. 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. 001-38048). 10.8† – Form of Stock Award Grant Letter (incorporated by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, SEC File No. 001-38048). 10.9† – Form of Restricted Stock Unit Agreement (Directors) (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, SEC File No. 001-38048). 10.10† – Form of Deferred Stock Unit Agreement (Directors) (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report for the quarter ended June 30, 2022, SEC File No. 001-38048). 10.11† – Dividend and Distribution Reinvestment Agreement, dated February 22, 2022, by and among Altus Midstream Company, Altus Midstream LP, APA Corporation, Apache Midstream LLC, Buzzard Midstream LLC, Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP and each of the other parties set forth on the signature pages thereto. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on February 22, 2022). 10.12† – Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, SEC File No. 001-38048). 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. 001-38048). 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) . 49 Table of Contents Index to Financial Statements 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). 10.25 – 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). 10.26 – 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). 10.27 – 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). 10.28 – 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). 19.1* – Insider Trading Policy adopted February 26, 2025. 21.1* – Subsidiaries of the Company. 23.1* – Consent of KPMG LLP. 23.2* – Consent of KPMG LLP. relating to the financial statements of Permian Highway Pipeline LLC. 31.1* – Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a). 31.2* – Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a). 32.1** – Certification of the Principal Executive Officer required by 18 U.S.C. 1350. 32.2** – Certification of the Principal Financial Officer required by 18 U.S.C. 1350. 97.1 Kinetik Holdings Inc. Clawback Policy (incorporated by reference to Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K filed on March 5, 2024). 99.1* – Permian Highway Pipeline LLC audited financial statements as of December 31, 202 4 . 99.2* – 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: (i) Consolidated Statements of Operations, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Changes in Equity and Noncontrolling Interests and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. 101.SCH* – Inline XBRL Taxonomy Schema Document. 101.CAL* – Inline XBRL Calculation Linkbase Document. 101.DEF* – Inline XBRL Definition Linkbase Document. 101.LAB* – Inline XBRL Label Linkbase Document. 101.PRE* – Inline XBRL Presentation Linkbase Document. 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Filed herewith. ** Furnished herewith *** Schedules and exhibits to this Exhibit have been omitted pursuant to Regulation S-K Item 601(b)(2). 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. ITEM 16. ANNUAL REPORT ON FORM 10-K SUMMARY Not Applicable. 50 Table of Contents Index to Financial Statements SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. KINETIK HOLDINGS INC. Dated: March 3, 2025 /s/ Jamie Welch Jamie Welch Chief Executive Officer, President and Director (Principal Executive Officer) Dated: March 3, 2025 /s/ Steven Stellato Steven Stellato Executive Vice President, Chief Accounting and Chief Administrative Officer (Principal Financial Officer and Principal Accounting Officer) POWER OF ATTORNEY The officers and directors of Kinetik Holdings Inc., whose signatures appear below, hereby constitute and appoint each of them (with full power to each of them to act alone), the true and lawful attorney-in-fact to sign and execute, on behalf of the undersigned, any amendment(s) to this report and each of the undersigned does hereby ratify and confirm all that said attorneys shall do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date /s/ Jamie Welch Chief Executive Officer, President and Director March 3, 2025 /s/ Steven Stellato Executive Vice President, Chief Accounting and Chief Administrative Officer March 3, 2025 /s/ David Foley Chair March 3, 2025 /s/ John Paul Munfa Director March 3, 2025 /s/ Karen Putterman Director March 3, 2025 /s/ Michael A. Kumar Director March 3, 2025 /s/ Jesse Krynak Director March 3, 2025 /s/ William Ordemann Director March 3, 2025 /s/ Laura Sugg Director March 3, 2025 /s/ Kevin McCarthy Director March 3, 2025 /s/ Mark Leland Director March 3, 2025 /s/ Deborah Byers Director March 3, 2025 51 Table of Contents Index to Fin ancial Statements REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of Kinetik Holdings Inc. (the “Company”) is responsible for the preparation and integrity of the consolidated financial statements appearing in this Annual Report. The financial statements were prepared in conformity with accounting principles generally accepted in the United States and include amounts that are based on management’s best estimates and judgments. Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements. Our internal control over financial reporting is supported by a program of internal audits and appropriate reviews by management, written policies and guidelines, careful selection and training of qualified personnel and a written code of business conduct adopted by our Company’s Board, applicable to all Company directors and all officers of our Company. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. 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”). 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. 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. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013) . Based on our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2024. The Company’s independent auditors, KPMG, a registered public accounting firm, are appointed by the Audit Committee of the Company’s Board. KPMG has audited and reported on the consolidated financial statements of Kinetik Holdings Inc. and its subsidiaries. /s/ Jamie Welch Jamie Welch Chief Executive Officer, President and Director (Principal Executive Officer) /s/ Steven Stellato Steven Stellato Executive Vice President, Chief Accounting and Chief Administrative Officer (Principal Financial Officer and Principal Accounting Officer) /s/ Jake Loden Jake Loden Vice President Controller Houston, Texas March 3, 2025 F-1 Table of Contents Index to Fin ancial Statements Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors Kinetik Holdings Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Kinetik Holdings Inc. and subsidiaries (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). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 3, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Evaluation of impairment indicators for long-lived assets As discussed in Note 2 to the consolidated financial statements, the Company assesses property, plant, and equipment, net and intangible assets, net (collectively, long-lived assets) for impairment when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Impairments exist when the carrying value of a long-lived asset exceeds the total estimated undiscounted net cash flows from the future use and eventual disposition of the asset. 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. F-2 Table of Contents Index to Fin ancial Statements We identified the evaluation of impairment indicators for long-lived assets as a critical audit matter. Evaluating the Company’s judgments in determining whether events or changes in circumstances indicate carrying values may not be recoverable required a higher degree of subjective auditor judgment. Sustained decreases in pricing or throughput volumes and significant increases in competition or operating costs could significantly affect the recoverability of the long-lived assets, and the evaluation of these factors required a higher degree of auditor judgment. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to evaluate triggering events related to the impairment of long-lived assets. We assessed the Company’s identification of potential impairment indicators by evaluating the Company’s assessment of the factors identified. Specifically, we: • read publicly available information to evaluate the performance of industry peers, commodity price trends, and overall macro-economic conditions • analyzed the financial results for the current period compared to historical results for long-lived assets to determine if there were significant degradations in the related cash flows • compared the remaining useful lives of the long-lived assets to the period of time required to recover the carrying value of the assets based on historical cash flows • read publicly available information for the industry, peers, and customers to determine whether a potential impairment indicator was not considered in management’s analysis. /s/ KPMG LLP We have served as the Company’s auditor since 2017. Houston, Texas March 3, 2025 F-3 Table of Contents Index to Fin ancial Statements Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors Kinetik Holdings Inc.: Opinion on Internal Control Over Financial Reporting We have audited Kinetik Holdings Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 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 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. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. /s/ KPMG LLP Houston, Texas March 3, 2025 F-4 Table of Contents Index to Fin ancial Statements KINETIK HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS For the Year Ended December 31, 2024 2023 2022 (1) (In thousands, except per share data) Operating revenues: Service revenue $ 408,000 $ 417,751 $ 393,954 Product revenue 1,062,986 822,410 806,353 Other revenue 11,943 16,251 13,183 Total operating revenues (2) 1,482,929 1,256,412 1,213,490 Operating costs and expenses: Costs of sales (exclusive of depreciation and amortization expenses) (3)(4) 620,618 515,721 541,518 Operating expenses 195,970 161,520 137,289 Ad valorem taxes 24,714 21,622 16,970 General and administrative expenses 134,157 97,906 94,268 Depreciation and amortization expenses 324,197 280,986 260,345 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 Operating income 179,233 159,255 150,489 Other income (expense): Interest and other income 2,802 2,004 489 Gain on redemption of mandatorily redeemable Preferred Units — — 9,580 Loss on debt extinguishment ( 525 ) ( 1,876 ) ( 27,975 ) Gain on sale of equity method investment 89,802 — — Gain on embedded derivative — — 89,050 Interest expense ( 217,235 ) ( 205,854 ) ( 149,252 ) Equity in earnings of unconsolidated affiliates 213,191 200,015 180,956 Total other income (expense), net 88,035 ( 5,711 ) 102,848 Income before income taxes 267,268 153,544 253,337 Income tax expense (benefit) 23,035 ( 232,908 ) 2,616 Net income including noncontrolling interests 244,233 386,452 250,721 Net income attributable to Preferred Unit limited partners — — 115,203 Net income attributable to common shareholders 244,233 386,452 135,518 Net income attributable to Common Unit limited partners 164,219 97,010 94,783 Net income attributable to Class A Common Stock Shareholders $ 80,014 $ 289,442 $ 40,735 Net income attributable to Class A Common Shareholders per share Basic $ 1.03 $ 5.25 $ 1.47 Diluted $ 1.02 $ 2.52 $ 1.47 Weighted-average shares (5) Basic 59,284 51,823 41,630 Diluted 60,115 146,197 41,665 (1) The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to Note 1—Description of 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. Refer to Note 18—Related Party Transactions in the Notes to our Consolidated Financial Statements in this Annual Report for further information . (3) Cost of sales (exclusive of depreciation and amortization) is net of gas service revenues totaling $ 219.7 million, $ 148.3 million and $ 70.4 million for the years ended December 31, 2024, 2023 and 2022, respectively, for certain volumes where we act as principal. (4) Includes related party amounts of $ 58.5 million , $ 59.1 million, and $ 39.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. Refer to Note 18—Related Party Transaction s in the Notes to our Consolidated Financial Statements in this Annual Report for further information. (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 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. F-5 Table of Contents Index to Fin ancial Statements KINETIK HOLDINGS INC. CONSOLIDATED BALANCE SHEETS December 31, 2024 2023 (In thousands, except share data) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 3,606 $ 4,510 Accounts receivable, net of allowance for credit losses of $ 1,000 in 2024 and 2023 (1) 111,940 215,721 Accounts receivable pledged 140,200 — Derivative assets 2,308 7,812 Prepaid and other current assets 36,705 29,256 294,759 257,299 NONCURRENT ASSETS: Property, plant and equipment, net 3,433,864 2,743,227 Intangible assets, net 652,490 591,670 Derivative asset, non-current 65 165 Operating lease right-of-use assets 29,814 37,569 Deferred tax asset 203,996 235,627 Deferred charges and other assets 76,994 85,250 Investments in unconsolidated affiliates 2,117,878 2,540,989 Goodwill 5,077 5,077 6,520,178 6,239,574 Total assets $ 6,814,937 $ 6,496,873 LIABILITIES, NONCONTROLLING INTEREST, AND EQUITY CURRENT LIABILITIES: Accounts payable $ 27,239 $ 34,000 Accrued expenses 186,714 177,421 Derivative liabilities 10,011 1,734 Current portion of operating lease liabilities 18,701 29,203 Current debt obligations 140,200 — Other current liabilities 35,689 7,786 418,554 250,144 NONCURRENT LIABILITIES Long term debt, net 3,363,996 3,562,809 Contract liabilities 20,985 25,761 Operating lease liabilities 11,490 9,349 Derivative liabilities 1,937 5,363 Other liabilities 2,148 3,219 Deferred tax liabilities 16,761 13,244 3,417,317 3,619,745 Total liabilities 3,835,871 3,869,889 COMMITMENTS AND CONTINGENCIES ( NOTE 17 ) Redeemable noncontrolling interest — Common Unit limited partners 5,955,662 3,157,807 EQUITY: Class A Common Stock: $ 0.0001 par, 1,500,000,000 shares authorized, 59,929,611 and 57,096,538 shares issued and outstanding at December 31, 2024 and 2023, respectively 6 6 Class C Common Stock: $ 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 9 9 Deferred consideration 1 — Additional paid-in capital — 192,678 Accumulated deficit ( 2,976,612 ) ( 723,516 ) Total equity ( 2,976,596 ) ( 530,823 ) Total liabilities, noncontrolling interest, and equity $ 6,814,937 $ 6,496,873 (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. The accompanying notes are an integral part of the Consolidated Financial Statements. F-6 Table of Contents Index to Fin ancial Statements KINETIK HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2024 2023 2022 (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income including noncontrolling interests $ 244,233 $ 386,452 $ 250,721 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 324,197 280,986 260,345 Amortization of deferred financing costs 7,438 6,194 9,569 Amortization of contract costs 6,621 6,620 1,807 Contingent liabilities fair value adjustment 200 — ( 839 ) Distributions from unconsolidated affiliate 289,992 272,490 256,764 Derivatives settlement ( 7,258 ) 25,708 10,667 Derivative fair value adjustment 17,713 ( 33,671 ) ( 95,501 ) 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, net 4,040 19,402 12,611 Equity in earnings from unconsolidated affiliates ( 213,191 ) ( 200,015 ) ( 180,956 ) Loss on debt extinguishment 525 1,876 27,975 Share-based compensation 76,536 55,983 42,780 Deferred income tax expense (benefit) 19,503 ( 233,400 ) 2,094 Changes in operating assets and liabilities: Accounts receivable and pledged receivable ( 7,033 ) ( 12,131 ) ( 8,329 ) Other assets 8,000 ( 5,910 ) ( 4,242 ) Accounts payable ( 40,849 ) 19,804 ( 1,598 ) Accrued liabilities ( 2,913 ) ( 6,521 ) 38,672 Operating leases ( 606 ) 701 179 Net cash provided by operating activities 637,346 584,480 613,006 CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and equipment expenditures ( 263,544 ) ( 312,860 ) ( 206,160 ) Intangible assets expenditures ( 12,329 ) ( 16,694 ) ( 15,419 ) Investments in unconsolidated affiliate ( 3,273 ) ( 238,803 ) ( 78,171 ) 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 Net cash used in investing activities ( 176,887 ) ( 686,320 ) ( 286,130 ) CASH FLOWS FROM FINANCING ACTIVITIES: 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 Payments on revolver ( 1,064,000 ) ( 553,500 ) ( 879,000 ) Redemption of mandatorily redeemable Preferred Units — — ( 183,297 ) Redemption of redeemable noncontrolling interest Preferred Units — — ( 461,460 ) Distributions paid to mandatorily redeemable Preferred Unit holders — — ( 1,850 ) Distributions paid to redeemable noncontrolling interest Preferred Unit limited partners — — ( 6,937 ) F-7 Table of Contents Index to Fin ancial Statements KINETIK HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) For the Year Ended December 31, 2024 2023 2022 (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 CASH, END OF PERIOD $ 3,606 $ 4,510 $ 6,394 SUPPLEMENTAL SCHEDULE OF INVESTING AND FINANCING ACTIVITIES Cash paid for interest, net of amounts capitalized $ 244,603 $ 207,700 $ 120,270 Cash paid for income taxes, net $ 560 $ 480 $ — Property and equipment and intangible accruals in accounts payable and accrued liabilities $ 21,094 $ 27,316 $ 17,274 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 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 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. F-8 Table of Contents Index to Fin ancial Statements KINETIK HOLDINGS INC. STATEMENTS OF CONSOLIDATED CHANGES IN EQUITY AND NONCONTROLLING INTERESTS Redeemable Noncontrolling Interest — Preferred Unit Limited Partners Redeemable Noncontrolling Interest — Common Unit Limited Partner Class A Common Stock Class C Common Stock Class C Common Stock Deferred Consideration Additional Paid-in Capital Accumulated Deficit Treasury Stock Total Equity Shares (1) Amount Shares (1) Amount Shares (2) Amount (In thousands) (In thousands) Balance at December 31, 2021 $ — $ 1,006,838 — $ — 100,000 $ 10 — $ — $ — $ — $ — $ 10 ALTM acquisition 462,717 — 32,493 3 — — — — 1,013,742 — — 1,013,745 Distributions paid to Preferred Unit limited partners ( 6,937 ) — — — — — — — — — — — Redemption of Preferred Units ( 461,460 ) — — — — — — — — — — — Redemption of Common Units — ( 179,323 ) 5,730 1 ( 5,730 ) ( 1 ) — — 179,323 — — 179,323 Excess of carrying amount over Preferred Units redemption price ( 109,523 ) 76,623 — — — — — — — 32,900 — 32,900 Issuance of common stock through dividend and distribution reinvestment plan — — 7,452 1 — — — — 263,284 — — 263,285 Share-based compensation — — 4 — — — — — 42,780 — — 42,780 Step up in tax basis for Common Unit conversion — — — — — — — — 297 — — 297 Remeasurement of contingent consideration — — — — — — — — 4,451 — — 4,451 Net income 115,203 94,783 — — — — — — — 40,735 — 40,735 Change in redemption value of noncontrolling interests — 2,325,918 — — — — — — ( 1,385,037 ) ( 940,881 ) — ( 2,325,918 ) Distributions paid to Common Units limited partners — ( 212,430 ) — — — — — — — — — — Dividends on Class A Common Stock $ 2.25 per share) — — — — — — — — — ( 91,383 ) — ( 91,383 ) Balance at December 31, 2022 $ — $ 3,112,409 45,679 $ 5 94,270 $ 9 — $ — $ 118,840 $ ( 958,629 ) $ — $ ( 839,775 ) F-9 Table of Contents Index to Fin ancial Statements 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 Common Stock Class C Common Stock Class C Common Stock Deferred Consideration Additional Paid-in Capital Accumulated Deficit Treasury Stock Total Equity Shares (1) Amount Shares (1) Amount Shares (2) Amount (In thousands) (In thousands) Balance at December 31, 2022 $ — $ 3,112,409 45,679 $ 5 94,270 $ 9 — $ — $ 118,840 $ ( 958,629 ) $ — $ ( 839,775 ) Redemption of Common Units — ( 5,634 ) 181 — ( 181 ) — — — 5,634 — — 5,634 Issuance of common stock through dividend and distribution reinvestment plan — — 11,215 1 — — — — 352,059 — — 352,060 Retirement of treasury stock — — — — — — — — — ( 5,757 ) 5,757 — Repurchase of Class A Common Stock — — ( 194 ) — — — — — — — ( 5,757 ) ( 5,757 ) Share-based compensation — — 216 — — — — — 55,983 — — 55,983 Net income — 97,010 — — — — — — — 289,442 — 289,442 Change in redemption value of noncontrolling interests — 236,288 — — — — — — ( 339,838 ) 103,550 — ( 236,288 ) Distribution paid to Common Units limited partners — ( 282,266 ) — — — — — — — — — — Dividends on Class A Common Stock ($ 3.00 per share) — — — — — — — — — ( 152,122 ) — ( 152,122 ) Balance at December 31, 2023 $ — $ 3,157,807 57,097 $ 6 94,089 $ 9 — $ — $ 192,678 $ ( 723,516 ) $ — $ ( 530,823 ) F-10 Table of Contents Index to Fin ancial Statements 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 Common Stock Class C Common Stock Class C Common Stock Deferred Consideration Additional Paid-in Capital Accumulated Deficit Treasury Stock Total Equity Shares (1) Amount Shares (1) Amount Shares (2) Amount (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. F-11 Table of Contents Index to Fin ancial Statements KINETIK HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Organization 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, 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. Gulf Coast. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with GAAP. All adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations have been made and are of a recurring nature unless otherwise disclosed herein. All intercompany balances and transactions have been eliminated in consolidation. 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. F-12 Table of Contents Index to Fin ancial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its Consolidated Financial Statements, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include the valuation of enterprise value, assets acquired and liabilities assumed in a business combination, derivatives, tangible and intangible assets and impairment of long-lived assets and equity method investments (“EMI” or “EMIs”). Segment Information The Company applies FASB ASC 280, Segment Reporting , in determining reportable segments for its financial statement disclosure. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. Our Chief Executive Officer is the CODM. The Company has determined it has two operating segments: (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 We provide gathering, processing, transportation, and disposal services and we sell commodities (including condensate, natural gas, and NGLs) under various contracts. The Company recognizes revenue in accordance with the provisions of FASB ASC 606, Revenue from Contracts with Customers (“Topic 606”). We recognize revenues for services and products under revenue contracts as our obligations to perform services or deliver/sell products under the contracts are satisfied. A contract’s transaction price is allocated to each performance obligation in the contract and recognized as revenue when, or as, the performance obligation is satisfied. These contracts include: a. Fee-based arrangements – Under fee-based contract arrangements, the Company provides gathering, processing and disposal services to producers and earns a net margin based on volumes. While transactions vary in form, the essential element of each transaction is the use of the Company’s assets to transport a product or provide a processed product to an end-user at the tailgate of the plant or pipeline. This revenue stream is generally directly related to the volume of water, natural gas, crude oil, NGLs, and condensate that flows through the Company’s systems and facilities and is not normally dependent on commodity prices. The Company primarily acts as an agent under these contracts selling the underlying commodities on behalf of the producer and remitting back to the producer the net proceeds. These such sales and remitted proceeds are presented net within revenue. However, in certain instances, the Company acts as the principal for processed residue gas and NGLs by purchasing them from the associated producer at the tailgate of the plant at index prices. This purchase and the associated third-party sale are presented gross within revenues and cost of sales. b. Percent-of-proceeds arrangements – Under percentage-of-proceeds based contract arrangements, the Company will gather and process natural gas on behalf of producers and sell the outputs, including residue gas, NGLs and condensate, at market prices. 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 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. This purchase and the associated third-party sale are presented gross within revenues and cost of sales. c. 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 F-13 Table of Contents Index to Fin ancial Statements 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. d. 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 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. For performance obligations associated with these contracts, we recognize revenues over time utilizing the output method based on the actual volumes of products delivered/sold or services performed, because the single performance obligation is satisfied over time using the same performance measure of progress toward satisfaction of the performance obligation. The transaction price under our fee-based service contracts includes variable consideration that varies primarily based on actual volumes that are delivered under the contracts. Because the variable consideration specifically relates to our efforts to transfer the services and/or products under the contracts, we allocate the variable consideration entirely to the distinct service utilizing the allocation exception guidance under Topic 606, and accordingly recognize the variable consideration as revenues at the time the good or service is transferred to the producer. We recognize revenues at a point in time for performance obligations associated with percent-of-proceeds contract elements, percent-of-products contract elements and product sale contracts, and these revenues are recognized because control of the underlying product is transferred to the customer or producer. The evaluation of when performance obligations have been satisfied and the transaction price that is allocated to our performance obligations requires judgments and assumptions, including our evaluation of the timing of when control of the underlying good or service has transferred to our producers or customers. Actual results can vary from those judgments and assumptions. Minimum Volume Commitments The Company has certain agreements that provide for quarterly or annual MVCs. Under these MVCs, our producers agree to ship and/or process a minimum volume of production on our gathering and processing systems or to pay a minimum monetary amount over certain periods during the term of the MVC. A producer must make a shortfall payment to us at the end of the contracted measurement period if its actual throughput volumes are less than its contractual MVC for that period. None of the Company’s MVC provisions allow for producers to make up past deficient volumes in a future period. However, certain MVC provisions allow producers to carryforward volumes delivered in excess of a current period MVC to future periods. The Company recognizes revenue associated with MVCs when a counterparty has not met the contractual MVC at the completion of the measurement period for the specific commitment or we determine that the counterparty cannot meet the contractual MVC by the end of the contracted measurement period. Disaggregation of Revenue The Company disaggregates revenue into categories that depict the nature, amount, and timing of revenue and cash flows based on differing economic risk profiles for each category. In concluding such disaggregation, the Company evaluated the nature of the products and services, consumer markets, sales terms, and sales channels which have similar characteristics such that the level of disaggregation provides an understanding of the Company’s business activities and historical performance. The level of disaggregation is evaluated annually and as appropriate for changes to the Company or its business, either from internal growth, acquisitions, divestitures, or otherwise. See Note 4 — Revenue Recognition in the Notes to our Consolidated Financial Statements in this Annual Report for further information. 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 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 F-14 Table of Contents Index to Fin ancial Statements 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. Typically, through our customer contracts, the Company takes title to the rich gas and associated plant products (NGLs and residue gas). As such, the inherent risk with these types of contracts is mitigated as the Company receives funds for the disposition and sale of such products from downstream counterparties that are large investment grade entities and is able to deduct all fees owed to it by its customers and associated costs before remitting the balance of any funds back to the relevant customer. For those few counterparties’ that retain ownership of their plant products, the Company attempts to minimize credit risk exposure through its credit policies and monitoring procedures as well as through customer deposits, and letters of credit. The Company manages credit risk to mitigate credit losses and exposure to uncollectible trade receivables and generally receivables are collected within 30 days. Below is a summary of operating revenue by major customer that individually exceeded 10% of consolidated operating revenue: For the Year Ended December 31, 2024 2023 2022 (In thousands) Customer 1 $ 372,949 $ 205,079 $ 71,055 Customer 2 335,107 278,408 211,093 Customer 3 190,318 223,714 326,899 Customer 4 158,451 9,395 — Others 426,104 539,816 604,443 Consolidated Operating Revenue $ 1,482,929 $ 1,256,412 $ 1,213,490 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. 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. We do not believe that a loss of revenues from any single customer would have a material adverse effect on our business, financial position, results of operations or cash flows. The Company regularly maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses with respect to the related risks to cash and does not believe its exposure to such risk is more than nominal. Fair Value Measurements FASB ASC Topic 820, Fair Value Measurement (“Topic 820”), establishes a framework for measuring fair value in U.S. GAAP, clarifies the definition of fair value within that framework, and requires disclosures about the use of fair value measurements. Topic 820 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. 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. Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level 1 inputs). The three levels of the fair value hierarchy under Topic 820 are described below: Level 1 inputs : Unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 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. F-15 Table of Contents Index to Fin ancial Statements Level 2 inputs : Inputs, other than quoted prices in active markets, that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 inputs : Prices or valuations that require unobservable inputs that are both significant to the fair value measurement and unobservable. Valuation under Level 3 generally involves a significant degree of judgment from management. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Where available, fair value is based on observable market prices or inventory parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity. The Company’s Consolidated Balance Sheets reflect a mixture of measurement methods for financial assets and liabilities. Public and private warrants and derivative financial instruments are reported at fair value. See Note 12—Fair Value Measurements and Note 13—Derivatives and Hedging Activities in the Notes to our Consolidated Financial Statements in this Annual Report for further information. Other financial instruments are reported at historical cost or amortized cost on our Consolidated Balance Sheets. Long-term debt is primarily the other financial instrument for which carrying value could vary significantly from fair value. See Note 8—Debt and Financing Costs in the Notes to our Consolidated Financial Statements in this Annual Report for further information. Derivative Instruments and Hedging Activities FASB ASC Topic 815, Derivatives and Hedging (“Topic 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by Topic 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company has not elected to apply hedge accounting to any of its current or recent derivative transactions. When the Company does not 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. Cash and Cash Equivalents 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 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. Accounts Receivable and Current Expected Credit Losses Accounts receivable include billed and unbilled amounts due from customers for gas, NGLs and condensate sales, pipeline transportation, and gathering, processing and disposal fees, under normal trade terms, generally requiring payment within 30 days. The Company’s current expected credit losses are determined based upon reviews of individual accounts, existing economics, and other pertinent factors. The Company had an allowance for credit losses of $ 1.0 million as of December 31, 2024 and 2023. F-16 Table of Contents Index to Fin ancial Statements 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 Quantities of natural gas over-delivered or under-delivered related to imbalance agreements are recorded monthly as receivables or payables using weighted-average prices at the time of the imbalance. These imbalances are typically settled with deliveries of natural gas. We had imbalance receivables of $ 5.0 million and $ 1.3 million at December 31, 2024 and 2023, respectively, which are carried at the lower of cost or market value. We had no imbalance payables at December 31, 2024 and 2023. Imbalance receivables and imbalance payables are included in “Accounts Receivable” and “Accounts Payable”, respectively, on the Consolidated Balance Sheets. Inventory Other current assets include condensate, residue gas and NGL inventories that are valued at the lower of cost or net realizable value. At the end of each reporting period, the Company assesses the carrying value of inventory and makes any adjustments necessary to reduce the carrying value to the applicable net realizable value. Inventory was valued at $ 3.6 million and $ 3.1 million as of December 31, 2024 and 2023, respectively. Property, Plant, and Equipment Property, plant and equipment are carried at cost or fair market value at the date of acquisition less accumulated depreciation. The cost basis of constructed assets includes materials, labor, and other direct costs. Major improvements or betterment are capitalized, while repairs that do not improve the life of the respective assets are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets as follows: Estimated Useful Life Buildings 30 years Gathering and processing systems and facilities 20 years Furniture and fixtures 5 years Vehicles 5 years Computer hardware and software 3 years Leases The Company's lease portfolio includes certain real estate and equipment. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. Operating leases are recorded on the balance sheet with operating lease assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. The Company has elected to account for the lease and non-lease components together as a single component for all classes of underlying assets. The Company excludes variable lease payments in measuring right-of-use (“ROU”) assets and lease liabilities, other than those that depend on an index, a rate or are in-substance fixed payments. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. In addition, ROU assets include initial direct costs incurred by the lessee as well as any lease payments made at or before the commencement date are reduced by lease incentives. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. 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 F-17 Table of Contents Index to Fin ancial Statements similar economic environment. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of one year or less are excluded from ROU assets and liabilities. Capitalized Interest The Company’s policy is to capitalize interest cost incurred on debt during the construction of major projects. Deferred Financing Costs Deferred financing costs consist of fees incurred to secure debt financing and are amortized over the life of the related debt using the effective interest rate method. Deferred financing costs associated with the Company’s unsecured term loans and senior notes are presented with the related debt on the Consolidated Balance Sheets, as a reduction to the carrying amounts. Deferred financing costs associated with the Company's revolving credit facilities are presented within “Other Current Assets” and “Deferred Charges and Other Assets” on the Consolidated Balance Sheets. Asset Retirement Obligation The Company follows the provisions of FASB ASC Topic 410, Asset Retirement and Environmental Obligations , which require the fair value of a liability related to the retirement of long-lived assets to be recorded at the time a legal obligation is incurred if the liability can be reasonably estimated. The liability is based on future retirement cost estimates and incorporates many assumptions, such as time to permanent removal, future inflation rates and the credit-adjusted risk-free rate of interest. The retirement obligation is recorded at its estimated present value with an offsetting increase to the related asset on the balance sheet. Over time, the liability is accreted to its future value, with the accretion recorded to expense. The Company’s assets generally consist of gas processing plants, crude storage terminals, saltwater disposal wells, and underground gathering and transportation pipelines installed along rights-of-way acquired from landowners and related above-ground facilities. The majority of the rights-of-way agreements do not require the dismantling and removal of the pipelines and reclamation of the rights-of-way upon permanent removal of the pipelines from service. Further, we have in place a rigorous repair and maintenance program that keeps our gathering and processing systems in good working order. As a result, the ultimate dismantlement and removal dates of the Company’s assets are not determinable. As such, the fair value of the liability is not estimable and, therefore, no asset retirement obligation has been recognized in the Consolidated Financial Statements as of December 31, 2024 and 2023. Environmental Costs The Company is subject to extensive federal, state, and local environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites, if applicable. Environmental costs that relate to current operations are expensed or capitalized as appropriate. Costs are expensed when they relate to an existing condition caused by past operations and will not contribute to current or future revenue generation. Liabilities related to environmental assessments and/or remedial efforts are accrued when property or services are probable or can reasonably be estimated. See Note 17—Commitments and Contingencies for additional discussion of environmental matter-related assessment. Intangible Assets 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. Goodwill Goodwill represents the excess of cost over the fair value of assets of businesses acquired. 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, F-18 Table of Contents Index to Fin ancial Statements 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. The Company has the unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing a quantitative goodwill impairment test. If the assessment of all relevant qualitative factors indicates that it is more likely than not that the fair value of a reporting unit is more than its carrying amount, a quantitative goodwill impairment test is not necessary. If the assessment of all relevant qualitative factors indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company will perform a quantitative goodwill impairment test. The quantitative impairment test for goodwill consists of a comparison of the fair value of a reporting unit with its carrying value, including the goodwill allocated to that reporting unit. 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 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. As such, no quantitative impairment test is necessary and the Company’s goodwill was no t impaired as of December 31, 2024 and 2023. 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 if events or circumstances indicate that the fair value of the assets have decreased below their carrying value. For long-lived assets to be held and used, the Company bases their evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. The Company’s management assesses whether there has been an impairment trigger, and if a trigger is identified, then the Company would perform an undiscounted cash flow test at the lowest level for which identifiable cash flows are independent of cash flows from other assets. If the sum of the undiscounted future net cash flows is less than the net book value of the property, an impairment loss is recognized for any excess of the property’s net book value over its estimated fair value. There was no impairment trigger event observed in 2024 and 2023. The Company did no t recognize impairment losses for long-lived assets during the years ended December 31, 2024 and 2023. Variable Interest Entity The Company uses a qualitative approach in assessing the consolidation requirement for variable interest entities. The approach focuses on identifying which enterprise has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. 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 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. Refer to Note 7—Equity Method Investments in the Notes to our Consolidated Financial Statements in this Annual Report. Equity Method Investments The Company follows the equity method of accounting when it does not exercise control over its equity interests but can exercise significant influence over the operating and financial policies of the entity. Under this method, the equity investments are carried originally at acquisition cost, increased by the Company’s proportionate share of the equity interest’s net income and contributions made, and decreased by the Company’s proportionate share of the equity interest’s net losses and distributions received. The Company determines whether distributions are a return on or a return of the investment based on the nature of the distribution approach, under which the Company classifies distributions from an investee by evaluating the facts, circumstances and nature of each distribution. For distributions from the Company’s EMI pipeline entities that are generated from their respective normal course of business, the Company classifies the distributions as return on investments and as cash flows from operating activities. For distributions that are a return of the investment, the Company classifies the distribution as cash flows from investing activities. 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. F-19 Table of Contents Index to Fin ancial Statements Other Assets 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. Accordingly, the Company had NGL and gas line fill of $ 16.8 million and $ 16.4 million within other assets as of December 31, 2024 and 2023, respectively. Redeemable Noncontrolling Interest — Common Units Limited Partners Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $ 0.0001 per share, to Contributor. Please refer to Note 1—Description of Business and Basis of Presentation in the Notes to our Consolidated Financial Statements in this Annual Report. The Common Units are redeemable at the option of unit holders and accounted for in the Company’s Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity. The Company records the redeemable noncontrolling interest at the higher of (i) its initial value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the maximum redemption value as of the balance sheet date. The redemption value was determined based on a 5-day volume weighted-average closing price of the 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. Mandatorily Redeemable Preferred Units The Partnership issued Series A Cumulative Redeemable Preferred Units (“Preferred Units”) on June 12, 2019. 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 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. The Company valued the liability as of each reporting date and recorded the change in valuation in “Other income (expenses)” in the Consolidated Statements of Operations. During 2022, the Company redeemed all outstanding mandatorily redeemable preferred units and recorded a gain on the redemption of $ 9.6 million. Redeemable Noncontrolling Interest — Preferred Unit Limited Partners The remaining Preferred Units assumed on the Closing Date were accounted for on the Company’s Consolidated Balance Sheets as a redeemable noncontrolling interest classified as temporary equity in accordance with the terms of the Preferred Units. 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. F-20 Table of Contents Index to Fin ancial Statements Share-Based Compensation 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 . Similarly, the Class A-3 units from BCP were exchanged for shares of Class C Common Stock and a corresponding number of Common Units (“Class C Shares”) and vest over four years . 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 (“ASC 718”). 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. Income Taxes 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. As such, the Company accounts for state income taxes in accordance with the asset and liability method of accounting for income taxes. Deferred income taxes are recognized for the tax consequences of temporary differences, at enacted statutory rates, between the consolidated financial statement carrying amounts and the tax bases of existing assets and liabilities. Income tax or benefit represents the current tax payable or refundable for the period, as applicable, plus or minus the tax effect of the net change in the deferred tax assets and liabilities. The Company routinely assesses its ability to realize its deferred tax assets. 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 Note 15—Income Taxes in the Notes to our Consolidated Financial Statements in this Annual Report. Net Income Per Share 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. 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. F-21 Table of Contents Index to Fin ancial Statements Recently Adopted Accounting Pronouncement 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”); (2) an amount for other segment items by reportable segment and a description of its composition. 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) 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. 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”). The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). A public business entity is required to provide an explanation, if not otherwise evident, of the individual reconciling items disclosed, such as the nature, effect, and underlying causes of the reconciling items and the judgment used in categorizing the reconciling items. The amendments in this update require that all entities disclose on an annual basis (1) the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and (2) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amendments in this update eliminate the requirement for all entities to (1) disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or (2) make a statement that an estimate of the range cannot be made. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. 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. 3. BUSINESS COMBINATIONS 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 F-22 Table of Contents Index to Fin ancial Statements 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. F-23 Table of Contents Index to Fin ancial Statements 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 24,000 Contract liabilities 642 Operating lease liabilities 3,617 Deferred tax liabilities 19,735 Total liabilities assumed 89,577 Contingent consideration (1) 4,500 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, 2024 2023 (In thousands) 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. F-24 Table of Contents Index to Fin ancial Statements Midstream Infrastructure Assets In the first quarter of 2023, the Partnership closed on a purchase and sale agreement for certain midstream assets for $ 65.0 million together with a new 20-year midstream service agreement. Midstream assets acquired consisted of water gathering and disposal assets and intangible right-of-way assets. As the net book value of the acquired assets were approximate to their fair market value, consideration was allocated to property plant and equipment and intangible based on the historical long-lived assets and intangible assets ratio acquired. In addition, the Partnership entered into an incentive and acceleration agreement related to near term supplemental development activities on acreage dedicated for midstream services to affiliates of the Partnership. Such development activities began in October 2023 and are subject to semi-annual performance milestones and subject to refund with consequential monetary penalty if not satisfied. Consideration for the incentive and acceleration agreement of $ 60.0 million was capitalized as a contract asset in accordance with ASC 606, of which $ 4.7 million was included in “Prepaid and Other Current Assets” and $ 55.3 million was included in “Deferred Charges and Other Assets” in the Consolidated Balance Sheet as of the date of acquisition. Acquisition-related costs were immaterial for this transaction. Acquired net assets from this business combination were included in the Midstream Logistic segment. 4. REVENUE RECOGNITION The following table presents a disaggregation of the Company’s revenue: For the Year Ended December 31, 2024 2023 2022 (In thousands) Gathering and processing services $ 408,000 $ 417,751 $ 393,954 Natural gas, NGLs and condensate sales 1,062,986 822,410 806,353 Other revenue 11,943 16,251 13,183 Total revenues $ 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, 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. For the years ended December 31, 2024, 2023, and 2022 the Company recognized revenues from producer MVC short falls of $ 0.1 million, $ 1.6 million and $ 4.0 million, respectively. Remaining Performance Obligations The following table presents our estimated revenue from contracts with customers for remaining performance obligations that has not yet been recognized, representing our contractually committed revenues as of December 31, 2024: Fiscal Year Amount (In thousands) 2025 $ 58,710 2026 73,265 2027 73,981 2028 72,873 2029 70,674 Thereafter 160,076 $ 509,579 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. F-25 Table of Contents Index to Fin ancial Statements Contract Liabilities The following provides information about contract liabilities from contracts with customers: (In thousands) 2024 2023 Balance as of January 1 $ 32,238 $ 29,300 Reclassification of beginning contract liabilities to revenue as a result of performance obligations being satisfied ( 7,003 ) ( 9,292 ) Cash received in advance and not recognized as revenue 1,430 12,230 Balance as of December 31 26,665 32,238 Less: Current portion 5,680 6,477 Non-current portion $ 20,985 $ 25,761 Contract liabilities relate to payments received in advance of satisfying performance obligations under a contract, which result from contribution in aid of construction payments. 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, 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 The Company has capitalized certain costs incurred to obtain a contract or additional contract dedicated acreage or volumes that would not have been incurred if the contract or associated acreage and volumes had not been obtained. These costs are recovered through the net cash flows of the associated contract. As of December 31, 2024 and 2023, the Company had contract cost assets of $ 64.6 million and $ 71.2 million, respectively. Current and noncurrent contract cost assets are included in “Prepaid and Other Current Assets” and “Deferred Charges and Other Assets”, respectively, of the Consolidated Balance Sheets. The Company amortizes these assets as cost of sales on a straight-line basis over the life of the associated long-term customer contract. For the 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, 2024, decreased $ 6.6 million compared to that as of December 31, 2023 related to the amortization of these assets during 2024. 5. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant, and equipment, net at carrying value, is as follows: December 31, 2024 2023 (In thousands) Gathering, processing, and transmission systems and facilities $ 3,977,825 $ 3,253,539 Vehicles 15,659 11,447 Computers and equipment 7,872 6,242 Less: accumulated depreciation ( 813,371 ) ( 626,223 ) Total depreciable assets, net 3,187,985 2,645,005 Construction in progress 215,168 74,369 Land 30,711 23,853 Total property, plant, and equipment, net $ 3,433,864 $ 2,743,227 The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated. These amounts represent property that is not yet available to be placed into productive service as of the respective reporting date. 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. F-26 Table of Contents Index to Fin ancial Statements 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. 6. INTANGIBLE ASSETS, NET Intangible assets, net are comprised of the following: December 31, 2024 2023 (In thousands) Customer contracts $ 1,270,106 $ 1,139,665 Right of way assets 196,979 141,711 Less accumulated amortization ( 814,595 ) ( 689,706 ) Total amortizable intangible assets, net $ 652,490 $ 591,670 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. The Company recorded $ 140.1 million, $ 122.3 million and $ 120.7 million of amortization expense for the years ended December 31, 2024, 2023, and 2022, respectively. There was no impairment recognized on intangible assets for the years ended December 31, 2024, 2023, and 2022, respectively. Estimated aggregate amortization expense for the remaining unamortized balance in future years is as follows: Fiscal Year Amount (In thousands) 2025 $ 138,419 2026 131,482 2027 96,706 2028 50,752 2029 46,215 Thereafter 188,916 Total $ 652,490 7. EQUITY METHOD INVESTMENTS As of December 31, 2024, the Company owned investments in the following long-haul pipeline entities in the Permian Basin. These investments were accounted for using the equity method of accounting. For each 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. F-27 Table of Contents Index to Fin ancial Statements The table below presents the ownership percentages and investment balances held by the Company for each entity: December 31, 2024 2023 (In thousands, except for ownership percentages) Ownership Amount Ownership Amount 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 $ 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 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. The following table presents the activities in the Company’s EMIs: PHP Breviloba GCX EPIC Total (In thousands) Balance at December 31, 2022 $ 1,474,800 $ 455,057 $ 451,483 $ — $ 2,381,340 Contributions 226,948 — — — 226,948 Distributions ( 178,542 ) ( 42,711 ) ( 57,916 ) — ( 279,169 ) Capitalized interest 11,855 — — — 11,855 Equity income, net (1) 131,193 31,338 37,484 — 200,015 Balance at December 31, 2023 $ 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 ) Disposition — — ( 430,941 ) — ( 430,941 ) Equity income, net (1) 174,081 26,855 15,500 ( 3,245 ) 213,191 Balance at December 31, 2024 $ 1,607,323 $ 428,383 $ — $ 82,172 $ 2,117,878 (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. F-28 Table of Contents Index to Fin ancial Statements Summarized Financial Information 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 PHP Breviloba GCX (1) EPIC Statements of Operations (In thousands) Revenues $ 508,137 $ 193,118 $ 151,486 $ 382,958 Operating income 326,338 87,301 110,679 92,566 Net income (loss) 327,335 87,886 110,458 ( 46,986 ) For the Year Ended December 31, 2023 PHP Breviloba GCX EPIC Statements of Operations (In thousands) Revenues $ 401,668 $ 188,921 $ 364,223 $ 347,436 Operating income 259,872 93,763 267,019 55,830 Net income (loss) 261,332 94,378 273,194 ( 77,825 ) For the Year Ended December 31, 2022 PHP Breviloba GCX EPIC Statements of Operations (In thousands) Revenues $ 396,846 $ 183,328 $ 364,223 $ 244,250 Operating income 261,040 98,119 269,150 12,174 Net income (loss) 261,028 97,834 268,493 ( 71,821 ) December 31, 2024 2023 PHP Breviloba GCX (1) EPIC PHP Breviloba GCX EPIC Balance Sheets (In thousands) Current assets $ 84,566 $ 28,302 $ 47,649 $ 181,867 $ 101,900 $ 30,108 $ 49,884 $ 111,799 Noncurrent assets 2,474,121 1,237,862 1,524,798 1,937,058 2,575,843 1,277,648 1,509,632 2,041,496 Total assets $ 2,558,687 $ 1,266,164 $ 1,572,447 $ 2,118,925 $ 2,677,743 $ 1,307,756 $ 1,559,516 $ 2,153,295 Current liabilities $ 42,636 $ 14,639 $ 21,973 $ 80,994 $ 67,597 $ 17,131 $ 21,908 $ 80,353 Noncurrent liabilities — 9,187 302 1,197,849 — 8,427 329 1,185,874 Equity 2,516,051 1,242,338 1,550,172 840,082 2,610,146 1,282,198 1,537,279 887,068 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. 8. DEBT AND FINANCING COSTS Comprehensive Refinancing 2022 On June 8, 2022, the Partnership completed the private placement of $ 1.00 billion aggregate principal amount of 5.875 % Senior Notes due 2030 (the “2030 Notes”), which are fully and unconditionally guaranteed by the Company. 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. F-29 Table of Contents Index to Fin ancial Statements 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 the 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. The Company recorded a loss on debt extinguishment of $ 28.0 million for the year ended December 31, 2022. December 2028 Sustainability-Linked Senior Notes On December 6, 2023, the Partnership completed a private placement of $ 500.0 million aggregate principal amount of 6.625 % Sustainability-Linked Senior Notes due 2028 (the “Original 2028 Notes”) at par. Further, on December 19, 2023, the Company completed an additional private placement of $ 300.0 million aggregate principal amount of 6.625 % Sustainability-Linked Senior Notes due 2028 (the “Additional 2028 Notes”) at 100.50 % of face amount (collectively, the “2028 Notes”). 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 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. The aggregate fees and expenses paid to obtain the 2028 Notes totaled $ 11.2 million and were capitalized as debt issuance cost and included in the Consolidated Balance Sheets as a direct deduction to the 2028 Notes. The $ 1.5 million premium was added to the 2028 Notes. 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. On or after December 15, 2025, the Partnership may redeem in whole or in part at the redemption price set forth in the indenture agreement governing the 2028 Notes. Term Loan Amendment 2023 On December 6, 2023, the Partnership, the Company, PNC Bank, and the banks and other financial institutions party thereto, as lenders, entered into a First amendment to Credit Agreement (the “First Amendment”), concurrently with the closing of its 2028 Notes discussed above. The First Amendment (1) extended the maturity of the Term Loan to June 8, 2026 upon the prepayment of a principal amount of loans under the Term Loan of no less than $ 500.0 million; and (2) provided for 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. Pursuant to FASB ASC 470-50, Modifications and Extinguishments, the Company determined that the amendment of the maturity date is a modification of the original Term Loan. Fees paid directly to lenders in arranging the modification totaled $ 1.5 million and were recorded as an original debt discount and included in the Consolidated Balance Sheets as a direct deduction of the Term Loan and was amortized over the modified remaining life of the Term Loan using the effective interest method. Cost incurred with third parties directly related to the modification totaled $ 0.6 million and were expensed as incurred. 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 for the year ended December 31, 2023. F-30 Table of Contents Index to Fin ancial Statements 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, 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 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 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. 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. F-31 Table of Contents 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, 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: December 31, 2024 2023 (In thousands) A/R Facility $ 140,200 $ — Total current debt obligations $ 140,200 $ — Unsecured term loan (1) $ 1,000,000 $ 1,200,000 $ 1.00 billion 2030 senior unsecured notes 1,000,000 1,000,000 $ 0.80 billion 2028 senior unsecured notes 800,000 800,000 $ 1.25 billion revolving line of credit (2) 590,000 594,000 Total Long-term debt 3,390,000 3,594,000 Deferred debt issuance costs, net (3) ( 26,174 ) ( 31,510 ) Unamortized debt premium and discount, net 170 319 Long-term portion of debt, net $ 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. Unamortized debt issuance cost associated with the Revolving Credit Facility was $ 3.8 million and $ 5.4 million as of December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, the current and non-current portion of the unamortized debt issuance costs related to the revolving credit facilities were included in the “Prepaid and other current assets” and “Deferred charges and other assets” of the Consolidated Balance Sheets, respectively. Interest Income and Financing Costs, Net of Capitalized Interest The table below presents the components of the Company’s financing costs, net of capitalized interest: For the Year Ended December 31, 2024 2023 2022 (In thousands) Capitalized interest $ ( 8,321 ) $ ( 18,270 ) $ ( 2,747 ) Debt issuance costs 7,438 6,194 9,569 Interest expense 218,118 217,930 142,430 Total financing costs, net of capitalized interest $ 217,235 $ 205,854 $ 149,252 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. F-32 Table of Contents 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 (In thousands) 2025 $ 140,200 2026 1,000,000 2027 590,000 2028 800,000 2029 — Thereafter 1,000,000 Total $ 3,530,200 9. ACCRUED EXPENSES The following table provides detail of the Company’s other current liabilities: December 31, 2024 2023 (In thousands) Accrued product purchases $ 132,439 $ 109,172 Accrued taxes 15,538 632 Accrued salaries, vacation, and related benefits 3,111 1,872 Accrued capital expenditures 13,484 18,534 Accrued interest 6,127 33,760 Accrued other expenses 16,015 13,451 Total accrued expenses $ 186,714 $ 177,421 Accrued product purchases mainly accrue the liabilities related to producer payments and any additional business-related miscellaneous fees we owe to third parties, such as transport or capacity fees as of December 31, 2024 and 2023. 10. LEASES Components of lease costs are presented on the Consolidated Statements of Operations as “General and administrative expense” for real-estate leases and operating expense for non-real estate leases. Total operating lease cost for the years ended December 31, 2024, 2023 and 2022 were $ 38.7 million, $ 45.6 million, and $ 37.7 million, respectively. Short-term lease cost for the years ended December 31, 2024, 2023 and 2022 were $ 7.7 million, $ 3.4 million, and $ 6.2 million, respectively. The following table presents other supplemental lease information: Year Ended December 31, 2024 2023 (In thousands) 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 Weighted-average remaining lease term — operating leases (in years) 1.85 1.51 Weighted-average discount rate — operating leases 6.82 % 8.76 % F-33 Table of Contents Index to Fin ancial Statements The following table presents future minimum lease payments under operating leases: Fiscal Year Amount (In thousands) 2025 $ 19,702 2026 7,978 2027 2,691 2028 812 2029 695 Thereafter 48 Total lease payments 31,926 Less: interest ( 1,735 ) Present value of lease liabilities $ 30,191 11. EQUITY AND WARRANTS Redeemable Noncontrolling Interest - Common Unit Limited Partners On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all the equity interests of 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. Please refer to Note 1—Description of Business and Basis of Presentation in the Notes to our Consolidated Financial Statements in this Annual Report. 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 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. There were 97,783,034 Common Units and an equal number of Class C Common Stock issued and outstanding as of December 31, 2024. The Common Units fair value was approximately $ 5.96 billion and $ 3.16 billion as of December 31, 2024 and 2023, respectively. The fair value of the Common Units is estimated based on a quoted market price. Preferred Units 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 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. Warrants Upon Closing, the Company assumed certain warrants that were outstanding on the Closing Date. At the Closing, the Company recorded liabilities related to the warrants of $ 0.2 million. There were 12,577,350 Public Warrants, valued based on Level 1 inputs, and 6,364,281 Private Placement Warrants, valued based on Level 3 inputs. All Public Warrants and Private Placement Warrants expired on November 9, 2023. Common Stock 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. F-34 Table of Contents 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. Repurchases may be made at management’s discretion from time to time, in accordance with applicable securities laws, on the open market or through privately negotiated transactions and may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act. Privately negotiated repurchases from affiliates are also authorized under the Repurchase Program, subject to such affiliates’ interest and other limitations. The repurchases will depend on market conditions and may be discontinued at any time without prior notice. 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. The Company retired all treasury stock as of December 31, 2023. For more information regarding the non-deductible 1% U.S. federal excise tax imposed on certain repurchases of stock by publicly traded U.S. corporations, please refer to Part I—Item 1A Risk Factors—Risks Related to Ownership of our Common Stock. Dividend On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with certain stockholders including BCP Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC, APA Corporation Apache Midstream LLC, and certain individuals (each, a “Reinvestment Holder”). Under the Reinvestment Agreement, each Reinvestment Holder is obligated to reinvest at least 20 % of all distributions on Common Units or dividends on shares of Class A Common Stock in the Company’s Class A Common Stock. Additionally, the Audit Committee 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 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 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. Stock Split 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 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 Altus Acquisition, for periods prior to June 8, 2022 have been retrospectively restated in this Annual Report to reflect the Stock Split. F-35 Table of Contents Index to Fin ancial Statements 12. FAIR VALUE MEASUREMENTS The following tables present financial assets and liabilities that are measured at fair value on a recurring basis: December 31, 2024 Level 1 Level 2 Level 3 Total (In thousands) Commodity swap $ — $ 1,869 $ — $ 1,869 Interest rate derivatives — 504 — 504 Total assets $ — $ 2,373 $ — $ 2,373 Commodity swaps $ — $ 10,742 $ — $ 10,742 Interest rate derivatives — 1,206 — 1,206 Contingent liabilities — — 4,700 4,700 Total liabilities $ — $ 11,948 $ 4,700 $ 16,648 December 31, 2023 Level 1 Level 2 Level 3 Total (In thousands) Commodity swap $ — $ 3,663 $ — $ 3,663 Interest rate derivatives — 4,314 — 4,314 Total assets $ — $ 7,977 $ — $ 7,977 Commodity swaps $ — $ 1,749 $ — $ 1,749 Interest rate derivatives — 5,348 — 5,348 Total liabilities $ — $ 7,097 $ — $ 7,097 Our derivative contracts consist of interest rate swaps and commodity swaps. 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 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 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. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the year ended December 31, 2024. 13. DERIVATIVES AND HEDGING ACTIVITIES The Company is exposed to certain risks arising from both its business operations and economic conditions, and it enters into certain derivative contracts to manage exposure to these risks. To minimize counterparty credit risk in derivative instruments, the Company enters into transactions with high credit-rating counterparties. 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. F-36 Table of Contents Index to Fin ancial Statements Interest Rate Risk The Company manages market risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and by using derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s objectives in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. 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. 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. The following table presents the fair value of derivative assets and liabilities related to the interest rate swap contracts: December 31 December 31 2024 2023 (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 The results of the Company’s operations may be affected by the market prices of oil, natural gas and NGLs. A portion of the Company’s revenue is directly tied to local natural gas, natural gas liquids and condensate prices in the Permian Basin and the U.S. Gulf Coast. Fluctuations in commodity prices also impact operating cost both directly and indirectly. Management regularly reviews the Company’s potential exposure to commodity price risk and manages exposure of such risk through commodity hedge contracts. 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. F-37 Table of Contents Index to Fin ancial Statements The table below presents detail information of commodity swaps outstanding as of December 31, 2024 (in thousands, except volumes): December 31, 2024 Commodity Instruments Unit Volume Net Fair Value (In thousands) Natural Gas Commodity Swap MMBtus 900,000 $ ( 79 ) NGL Commodity Swap Gallons 350,834,400 ( 8,523 ) Crude Commodity Swap Bbl 622,000 908 Crude Collars Commodity Swap Bbl 145,400 468 Natural Gas Basis Spread Swaps Commodity Swap MMBtus 5,440,000 ( 1,647 ) $ ( 8,873 ) 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 2024 2023 (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 ) 14. SHARE-BASED COMPENSATION Class A Shares and Class C Shares The table below summarizes Class A Shares and Class C Shares activity for the year ended December 31, 2024: Number of Shares Weighted Avg Grant-Date Fair Market Value Per Unit Outstanding and unvested units as of December 31, 2023 5,444,488 $ 28.91 Vested 43,166 31.18 Forfeited 1,592 31.18 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. F-38 Table of Contents Index to Fin ancial Statements Year Ended December 31, 2024 2023 (In thousands) Aggregate intrinsic value of vested Class A Shares $ 1,756 $ 28 Grant-date fair value of vested Class A Shares $ 1,346 $ 25 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 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: Number of Shares (1) Weighted Avg Grant-Date Fair Market Value Per Unit (1) Outstanding and unvested units as of December 31, 2023 435,220 $ 31.15 Granted 770,227 39.83 Vested 493,402 41.89 Forfeited 13,450 32.40 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. Year Ended December 31, 2024 2023 (In thousands) Aggregate intrinsic value of vested RSUs $ 21,104 $ 7,446 Grant-date fair value of vested RSUs $ 20,667 $ 6,931 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. 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. Any PSU not earned at the end of the performance period will be forfeited. F-39 Table of Contents 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: March 2024 Grant-date fair value per unit $ 36.76 Beginning average price $ 32.84 Risk-free interest rate 4.21 % Volatility factor 37 % Expected term 2.82 years 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. 15. INCOME TAXES The total income tax provision consists of the following: Year Ended December 31, 2024 2023 2022 (In thousands) Current income tax expense: Federal $ 1,329 $ — $ — State 2,203 492 522 3,532 492 522 Deferred tax (benefit) expense: Federal 19,535 ( 235,627 ) — State ( 32 ) 2,227 2,094 19,503 ( 233,400 ) 2,094 Total $ 23,035 $ ( 232,908 ) $ 2,616 F-40 Table of Contents Index to Fin ancial Statements The difference between the effective income tax rate and the U.S. statutory rate is reconciled below: Year Ended December 31, 2024 2023 U.S. statutory rate 21.00 % 21.00 % Tax attributable to noncontrolling interest ( 13.11 ) % ( 13.51 ) % State tax rate 2.03 % 1.64 % Other ( 1.30 ) % 0.02 % Valuation allowance — % ( 160.84 ) % Effective rate 8.62 % ( 151.69 ) % 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. GAAP and amounts utilized for income tax purposes. The net deferred tax assets consist of the following: December 31, 2024 2023 (In thousands) Deferred tax assets: Investment in partnership $ 110,856 $ 145,990 Net operating losses 90,435 88,788 Other 2,705 849 Total deferred tax assets 203,996 235,627 Deferred tax liabilities: Property, plant, and equipment 16,761 13,244 Net deferred tax assets $ 187,235 $ 222,383 For state purposes, the Company records deferred tax assets and liabilities based on the differences between the carrying value and tax basis of assets and liabilities recorded on the Consolidated Balance Sheets. 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. 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. It is also based on our projections of future taxable income at current commodity prices and our current cost structure. This positive evidence outweighs negative evidence regarding the realization of the Company’s deferred tax assets. As a result, no valuation allowance was recorded with respect to such deferred tax assets as of December 31, 2024. 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 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. However, notwithstanding such limitation, we expect to use substantially all of our NOLs to offset our future federal tax liabilities. The timing of such usage will depend upon our future earnings and future tax circumstances. The Company accounts for income taxes in accordance with FASB ASC 740 , Income Taxes , which prescribes a minimum recognition threshold a tax position must meet before being recognized in the financial statements. Tax positions generally refer to a position taken in a previously filed income tax return or expected to be included in a tax return to be filed in the future that is reflected in the measurement of current and deferred income tax assets and liabilities. The Company had no uncertain tax position as of December 31, 2024 and 2023. F-41 Table of Contents Index to Fin ancial Statements The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company has recorded no interest or penalties associated with unrecognized tax benefits. As of December 31, 2024, tax years 2020 through 2024 remain subject to examination by various taxing authorities. 16. NET INCOME PER SHARE EPS is computed by dividing net income attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed by dividing net income attributable to the Company by the weighted average number of shares of common stock outstanding and the assumed issuance of all potentially dilutive securities. Each issue of potential common shares is evaluated separately in sequence from the most dilutive to the least dilutive. The dilutive effect of share-based payment awards and stock options is calculated using the treasury stock method, which assumes share purchases are calculated using the average share price of the Company’s common stock during the applicable period. The Company uses the if-converted method to compute potential common shares exchanged from potentially dilutive Common Units. Under the if-converted method, dilutive Common Units are assumed to be exchanged from the date of the issuance and the resulting shares of Class A Common Stock are included in the denominator of the diluted EPS calculation for the period being presented. The following table sets forth a reconciliation of net income and weighted average shares outstanding used in computing basic and diluted net income per common share: Year Ended December 31, 2024 2023 2022 (In thousands, except per share amounts) Net income attributable to Class A common shareholders $ 80,014 $ 289,442 $ 40,735 Less: Net income available to participating unvested restricted Class A common shareholders (1) ( 18,829 ) ( 17,406 ) ( 12,530 ) Excess preferred carrying amount over consideration paid (2) — — 32,900 Total net income attributable to Class A common shareholders - basic $ 61,185 $ 272,036 $ 61,105 Net income attributable to Class A Common shareholders - basic $ 61,185 $ 272,036 $ 61,105 Net income attributable to Common Units limited partners (3) — 97,010 — Total net income attributable to Class A common shareholders - diluted $ 61,185 $ 369,046 $ 61,105 Weighted average shares outstanding - basic (4) 59,284 51,823 41,630 Dilutive effect of unvested Class A common shares (5) 831 269 35 Dilutive effect of exchange of outstanding Common Units (3) — 94,105 — 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 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 in this Annual Report for further information. (5) Includes dilutive effect from both RSUs and PSUs on unvested Class A common shares. 17. COMMITMENTS AND CONTINGENCIES Accruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. As of December 31, 2024 and 2023, there were no accruals for loss contingencies. F-42 Table of Contents Index to Fin ancial Statements Litigation The Company is a party to various legal actions arising in the ordinary course of its business. In accordance with ASC 450, Contingencies , the Company accrues reserves for outstanding lawsuits, claims, and proceedings when a loss contingency is probable and can be reasonably estimated. The Company estimates the amount of loss contingencies using current available information from legal proceedings, advice from legal counsel and available insurance coverage. Due to the inherent subjectivity of the assessments and unpredictability of the outcomes of the legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company from the legal proceedings in question. Thus, the Company’s exposure and ultimate losses may be higher, and possibly significantly more, than the amounts accrued. 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 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 As part of the acquisition of Permian Gas on June 11, 2019, consideration included a contingent liability arrangement with PDC Permian, Inc. (“PDC”). The arrangement requires additional monies to be paid by the Company to PDC on a per Mcf basis if the actual annual Mcf volume amounts exceed forecasted annual Mcf volume amounts starting in 2020 and continuing through 2029. The total monies paid under this arrangement are capped at $ 60.5 million and are payable on an annual basis over the 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. F-43 Table of Contents 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 $ 12.6 million as of December 31, 2024 and 2023, respectively. 18. RELATED PARTY TRANSACTIONS Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition. FASB ASC 850, Related Party Transactions (“Topic 850”), requires that transactions with related parties that would make a difference in decision making shall be disclosed so that users of the financial statements can evaluate their significance. Upon closing of the Altus Acquisition, 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. 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. The Company makes contributions, receives distributions and records equity in earnings or losses from these EMIs. See Note 7—Equity Method Investments in the Notes to our Consolidated Financial Statements in this Annual Report for further information. In addition to equity investment activities, the Company pays a demand fee to PHP and a capacity fee to Breviloba for certain volumes transported on the Shin Oak pipeline. The following table summarizes transactions with the above unconsolidated affiliates. 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. For the Year Ended December 31, 2024 (1) 2023 2022 (In thousands) Operating revenue $ 17,211 $ 104,138 $ 107,662 Operating expense $ 179 $ 759 $ 632 Cost of sales $ 58,496 $ 59,118 $ 39,304 (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. 19. SEGMENTS 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. These segments represent strategic business units with differing products and services. No operating segments have been aggregated to form the reportable segments. Therefore, our two operating segments represent our reportable segments. The activities of each of our reportable segments from which the Company earns revenues and incurs expenses are described below: • Midstream Logistics: The Midstream Logistics segment operates under three streams, 1) gas gathering and processing, 2) crude oil gathering, stabilization and storage services and 3) produced water gathering and disposal. F-44 Table of Contents Index to Fin ancial Statements • Pipeline Transportation: 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 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 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: F-45 Table of Contents Index to Fin ancial Statements Midstream Logistics Pipeline Transportation Corporate and Other (1) Elimination Consolidated For the year ended December 31, 2024 (In thousands) Revenue $ 1,461,898 $ 9,088 $ — $ — $ 1,470,986 Other revenue 11,652 291 — — 11,943 Intersegment revenue (2) — 26,099 — ( 26,099 ) — Total segment operating revenue 1,473,550 35,478 — ( 26,099 ) 1,482,929 Costs of sales (excluding depreciation and amortization expense) ( 620,617 ) ( 1 ) — — ( 620,618 ) 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 Add back: Other interest income — — 1,988 — 1,988 Gain on sale of equity method investment — 89,802 — — 89,802 Equity in earnings of unconsolidated affiliates — 213,191 — — 213,191 Deduct: Interest expense 81 — 217,154 — 217,235 Depreciation and amortization expenses 314,970 9,204 23 — 324,197 Contract assets amortization 6,621 — — — 6,621 Proportionate EMI EBITDA — 346,666 — — 346,666 Share-based compensation — — 76,536 — 76,536 Loss on disposal of assets, net 4,040 — — — 4,040 Commodity hedging unrealized loss 10,788 — — — 10,788 Loss on debt extinguishment — — 525 — 525 Contingent liabilities fair value adjustment 200 — — — 200 Integration costs 2,110 — 3,716 — 5,826 Acquisition 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 F-46 Table of Contents Index to Fin ancial Statements Midstream Logistics Pipeline Transportation Corporate and Other (1) Elimination Consolidated 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 ) — 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 Add back: 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 Deduct: 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 — — 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 and amortization 5,996 — 5,905 — 11,901 Income (loss) before income taxes $ 239,756 $ 199,654 $ ( 285,866 ) $ — $ 153,544 F-47 Table of Contents Index to Fin ancial Statements Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated (6) 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 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 Add back: 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 Deduct: Interest expense 47,419 ( 664 ) 102,497 149,252 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 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 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: (i) are not specifically attributable to an operating segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items. Items included here to reconcile operating segments profit and loss with the Company’s consolidated profit and loss. (2) The Company accounts for intersegment sales at market prices, while it accounts for asset transfers at book value. Intersegment revenue is eliminated at consolidation. (3) Operating expenses includes ad valorem taxes. (4) Other segment items include 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; please see Key Performance Metrics in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report, for a definition and reconciliation to the GAAP measure. (6) 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. F-48 Table of Contents 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) Consolidated For the year ended December 31, 2024 (In thousands) Income tax expenses $ — $ — $ 23,035 $ 23,035 Segment assets (2) 4,326,954 2,270,403 217,580 6,814,937 Total capital expenditures (3) 273,783 2,080 10 275,873 Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated For the year ended December 31, 2023 (In thousands) Income tax benefit $ — $ — $ ( 232,908 ) $ ( 232,908 ) Segment assets (2) 3,772,764 2,703,588 20,521 6,496,873 Total capital expenditures (3) 234,879 94,675 — 329,554 Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated For the year ended December 31, 2022 (In thousands) Income tax expenses $ — $ — $ 2,616 $ 2,616 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. 20. SUBSEQUENT EVENTS 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. F-49