What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-06 · 133 added, 184 removed, 170 unchanged (65% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis addresses the results of our operations for the three and nine months ended September 30, 2025, as compared to our results of operations for the same period in 2024.

The following discussion and analysis addresses the results of our operations for the three months ended March 31, 2026, as compared to our results of operations for the same period in 2025.

Please read the following discussion of our financial condition and results of operations in conjunction with the financial statements and notes thereto included elsewhere in this report.

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

The Pipeline Transportation segment consists of three EMI pipelines originating in the Permian Basin with various access points to the U.S.

Gulf Coast, as well as Kinetik NGL and Delaware Link Pipelines.

The pipelines transport natural gas, NGLs and crude oil within the Permian Basin and to the U.S.

The Pipeline Transportation segment consists of two EMI pipelines originating in the Permian Basin with various access points to the U.S.

Gulf Coast and Mexico markets, as well as Kinetik NGL and Delaware Link Pipelines.

The pipelines transport natural gas and NGLs within the Permian Basin and to the U.S.

Midstream Logistics

Gas Gathering and Processing.

The Midstream Logistics segment provides gas gathering and processing services with over 4,300 miles of low and high-pressure steel pipeline located throughout the Delaware Basin, including over 2,300 miles of gas pipeline acquired through the Durango Acquisition, over 200 miles of gas pipeline acquired through the Barilla Draw Acquisition, and over 630,000 horsepower of compression capacity.

The Midstream Logistics segment provides gas gathering and processing services with over 4,200 miles of low and high-pressure steel pipeline located throughout the Delaware Basin and over 825,000 horsepower of compression capacity.

Gas processing assets are centralized at eight processing complexes with total cryogenic processing capacity totaling over 2.4 Bcf/d.

In addition, the Midstream Logistics segment provides system-wide amine treating and 6.5 MMcf/d of acid gas injection capacity.

Crude Oil Gathering, Stabilization and Storage Services.

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The crude facilities have connections for takeaway transportation into certain facilities operated by Plains All American Pipeline, L.P.

Over 50 miles of gathering pipeline was added to our crude gathering assets through the Barilla Draw Acquisition which closed in January 2025.

Water Gathering and Disposal.

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EMI pipelines.

The Company owns the following equity interests in three EMI pipelines in the Permian Basin with access to various points along the U.S.

1) an approximate 55.5% equity interest in Permian Highway Pipeline LLC (“PHP”), which is operated by Kinder Morgan;

2) 33.0% equity interest in Breviloba, LLC (“Breviloba”), the owner of the Shin Oak NGL Pipeline (“Shin Oak”), which is operated by Enterprise Products Operating LLC;

and 3) 27.5% equity interest in Epic Crude Holdings, LP (“EPIC”), which is operated by EPIC Consolidated Operations, LLC.

Kinetik NGL Pipelines.

The Kinetik NGL Pipelines consist of approximately 96 miles of NGL pipelines connecting our East Toyah and Pecos complexes to Waha, including our 20-inch Dewpoint pipeline that spans over 40 miles, and our 30 mile, 20-inch Brandywine Pipeline connecting to our Diamond Cryogenic complex.

The Company owns the following equity interests in two EMI pipelines in the Permian Basin with access to various points along the U.S.

1) an approximate 55.5% equity interest in PHP, which is operated by Kinder Morgan;

and 2) 33.0% equity interest in Breviloba, the owner of Shin Oak, which is operated by Enterprise Products Operating LLC.

Kinetik NGL Pipeline System.

The Kinetik NGL Pipeline System consists of approximately 96 miles of NGL pipelines connecting our East Toyah and Pecos complexes to Waha, including our 20-inch Dewpoint pipeline that spans over 40 miles, and our 28 mile, 20-inch Brandywine Pipeline connecting to our Diamond Cryogenic complex.

The Kinetik NGL Pipeline System has a capacity of approximately 580 MBbl/d.

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The Delaware Link Pipeline consists of approximately 40 miles of 30-inch diameter pipeline with an initial capacity of approximately 1.0 Bcf/d that provides additional transportation capacity to Waha.

ECCC Pipeline.

The ECCC Pipeline is under construction and will provide connection from Eddy County, New Mexico to Culberson County, Texas, and approximately 150 MMcfp/d of initial rich gas throughput capacity.

The ECCC Pipeline is estimated to be in service during the second quarter of 2026.

Recent Developments

On August 30, 2025, Altus Midstream Processing LP, a Delaware limited partnership (“Altus”) and indirect subsidiary of the Company, Kinetik EC Holdco LLC, a Delaware limited liability company and indirect subsidiary of the Company (“Kinetik EC” and, together with Altus, the “Kinetik Sellers”), and, solely for the purposes set forth therein, Kinetik Holdings LP, a subsidiary of the Company, entered into a Purchase and Sale Agreement with Rattler Midstream Operating LLC, a Delaware limited liability company (“Rattler”), Rattler OMOG LLC, a Delaware limited liability company (“Rattler OMOG” together with Rattler, the “Diamondback Sellers” and, the Diamondback Sellers together with the Kinetik Sellers, the “Sellers”), Plains BK Holdco LLC, a Delaware limited liability company (“Buyer”), and, solely for the purposes set forth therein, each of Plains All American Pipeline, L.P., a Delaware limited partnership, and Rattler Midstream LP, a Delaware limited partnership, pursuant to which the Sellers have agreed to sell all of their respective partnership interests in EPIC, collectively representing 55% of the outstanding interests in EPIC, to Buyer for a total purchase price of approximately $1.8 billion (the “EPIC Sale”), consisting of approximately $1.6 billion of cash (subject to customary adjustments, including deductions for outstanding indebtedness) to be paid at closing (the “Purchase Price”) and an additional $192.5 million of contingent cash in the form of an earn out, payable upon the approval by the board of directors of the general partner of EPIC of one or more capital projects that achieve certain capacity expansion criteria (the “Earn Out”).

On October 31, 2025, the Company consummated the EPIC Sale and received $504.2 million of upfront cash consideration in exchange for its 27.5% interest in EPIC.

In addition, the Company can receive approximately $96 million attributable to an earn out, payable upon the approval by the board of directors of the general partner of EPIC of one or more capital projects that achieve certain capacity expansion criteria.

Amendment to A/R Facility

On March 31, 2026, the Partnership executed Amendment No.

2 to its accounts receivable securitization facility, with PNC Bank.

Pursuant to this amendment, the facility limit was reduced to $225.0 million, and the scheduled termination date was extended to March 30, 2027.

Furthermore, Amendment No.

2 introduced an option permitting Kinetik Receivables to request an increase in commitments of up to $50.0 million in aggregate, subject to the Purchaser’s approval.

Amendment No.

2 also removed all sustainability-linked pricing provisions from the A/R Facility, including the sustainability rate adjustment, sustainability fee adjustment and related reporting obligations.

Factors Affecting Our Business

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There has been, and we believe there will continue to be, volatility in commodity prices and in the relationships among NGLs, crude oil and natural gas prices.

As a result of uncertainty around global commodity supply and demand, global geopolitical conflicts, foreign and domestic trade policies implemented by the Trump Administration and response thereto, and recent action by OPEC+, global oil and natural gas commodity prices continue to remain volatile.

The volatility and uncertainty of natural gas, crude oil and NGL prices impact drilling, completion and other investment decisions by producers and ultimately supply to our systems.

In addition, the instability of the international political environment and human and economic hardship resulting from the armed conflicts would have a highly uncertain impact on the U.S.

economy, which in turn, might affect our business and operations adversely.

Moreover, the impact of tariffs imposed by the Trump Administration and foreign governments is highly uncertain.

Our product sales revenue is exposed to commodity price fluctuations.

Therefore, commodity price decline and sustained periods of low natural gas, NGL, and condensate prices could have an adverse effect on our product revenue stream.

Recent geopolitical developments in the Middle East, including the ongoing military conflict involving Iran, the closure of the Strait of Hormuz and related disruptions to global energy markets, each have contributed to heightened volatility in crude oil, natural gas, and NGL pricing and increased uncertainty in global supply chains.

While the Company’s midstream assets and operations are primarily located in the Permian Basin and our service revenue is supported by fee‑based contracts, our product sales revenue is exposed to commodity price fluctuations.

In addition, sustained volatility in global energy markets could indirectly impact producer activity levels, customer credit profiles, and overall demand for our services.

Furthermore, prolonged geopolitical instability may contribute to broader macroeconomic effects, including inflationary pressures, higher interest rates, and constrained capital availability.

The Company continues to monitor commodity prices closely and may enter into commodity price hedges to mitigate the volatility risk.

In addition, the Company, when economically appropriate, enters into fee-based and NGL arbitrage arrangements that insulate the Company from commodity price volatility.

In addition, our business requires access to steel and other materials to construct and maintain our pipelines and other midstream assets.

Imposition of, or increase in, tariffs on imports of steel or other materials, as well as corresponding price increases for such materials available domestically, could increase our construction costs and our costs to maintain our assets.

The Company continues to monitor costs of materials used for capital expenditure and considers budget-to-actual and forecast-to-actual variances on a monthly basis to mitigate volatility risk.

See Part II, Item 1A.

Risk Factors for additional discussion.

Inflation and Interest Rates

The annual rate of inflation in the United States was 3.0% in September 2025 as measured by the Consumer Price Index.

In light of the recent economic activity and labor market conditions, the Federal Open Market Committee (the “FOMC”) decided to lower the target range for the federal funds rate to 3.75% - 4.00 % during its meeting in October 2025.

During the meeting, the FOMC noted that the economic activity has been expanding at a moderate pace;

job gains have slowed, the unemployment rate has edged up but remains low, and inflation has moved up and remains somewhat elevated.

The FOMC also noted that it remains attentive to the risks to both sides of its dual mandate, judges that downside risks to employment have risen in recent months and seeks to achieve maximum employment and inflation at the rate of 2.00%.

The annual rate of inflation in the United States was 3.3% in March 2026 as measured by the Consumer Price Index.

In light of the recent economic activity and labor market conditions, the FOMC decided to maintain the target range for the federal funds rate at 3.50% - 3.75% during its meeting in April 2026.

During the meeting, the FOMC suggested that the economic activity has been expanding at a solid pace;

job gains have remained low, the unemployment rate has changed minimally in the recent months and inflation remains somewhat elevated, in part reflecting the recent increase in global energy prices.

The FOMC also noted that uncertainty about the economic outlook remained elevated, including because of the implications of developments in the Middle East.

The FOMC remains attentive to the risks to both sides of its dual mandate and seeks to achieve maximum employment and inflation at the rate of 2.00% over the long run.

The Company will continue to monitor the FOMC’s monetary policy and interest rate movement.

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The following table presents the Company’s results of operations for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(In thousands, except percentages)

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Depreciation and amortization expenses 101,833 92,673 10 %

Loss (gain) on disposal of assets, net

Gain on disposal of assets, net

(19) (40) (53 %)

Total operating costs and expenses 413,814 423,983 (2 %)

Operating income 19,787 72,874 (73 %) 116,522 155,563 (25 %)

Operating (loss) income (3,838) 19,280 (120 %)

Other income (expense):

Interest and other income 167 785 (79 %)

Loss on debt extinguishment — — — % (635) (525) 21 %

Gain on sale of equity method investment

— 29,953 (100 %) — 89,837 (100 %)

Interest expense (53,420) (55,714) (4 %)

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(2,065) 2,549 (181 %)

Income before income taxes 16,658 91,914 (82 %) 120,230 249,270 (52 %)

Income tax expense 1,109 8,260 (87 %) 11,003 21,261 (48 %)

Net income including noncontrolling interest $ 15,549 $ 83,654 (81 %) $ 109,227 $ 228,009 (52 %)

(1) Costs of sales (excluding depreciation and amortization) is net of gas service fees totaling $88.3 million and $60.2 million for the three months ended September 30, 2025 and 2024, respectively, and $224.1 million and $159.4 million for the nine months ended September 30, 2025 and 2024, respectively, for certain volumes, where we act as principal.

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Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

For the three months ended September 30, 2025, revenue increased by $67.6 million, or 17%, to $464.0 million, compared to $396.4 million for the same period in 2024.

The increase was primarily driven by higher product revenues related to higher NGL and condensate volumes sold.

Service revenue for the three months ended September 30, 2025 was flat as compared to the same period in 2024.

However, period-over-period gathered and processed gas volumes increased by 307.1 MMcf per day, or 15% and 188.6 MMcf per day, or 11%, respectively.

As the total gathered and processed gas volumes where we function as the agent decreased period-over-period, the change in net gas gathering fees presented as revenues were flat versus the expected increase.

Of the increase, Durango’s operations accounted for 45.3 MMcf per day and 102.1 MMcf per day of gathered and processed gas volume, respectively.

Over 97% of service revenues are included in the Midstream Logistics segment for the three months ended September 30, 2025.

Product revenue

Product revenue for the three months ended September 30, 2025, increased by $67.2 million, or 23%, to $357.6 million, compared to $290.4 million for the same period in 2024, primarily driven by an increase in NGL and condensate volumes sold, partially offset by decreases in natural gas residue volumes sold and NGL and condensate prices.

Period-over-period NGL and condensate volumes sold increased 2.4 million barrels, or 22%.

The increase in volumes sold was partially offset by decreases in period-over-period NGL and condensate prices of $2.05 per barrel, or 10% and $8.87 per barrel, or 12%, respectively.

Period-over-period natural gas residue volumes sold decreased 4.0 million MMBtu, or 21%, partially offset by an increase in natural gas prices of $0.64 per MMBtu, or 67%.

Product revenues are included entirely in the Midstream Logistics segment.

Operating Costs and Expenses

Costs of sales (excluding depreciation and amortization)

Cost of sales (excluding depreciation and amortization) primarily consists of purchases of NGLs and natural gas from our producers at contracted market prices to support product sales to other third parties.

For the three months ended September 30, 2025, cost of sales increased by $90.8 million, or 63%, to $235.4 million, compared to $144.6 million for the same period in 2024.

The increase was primarily driven by the aforementioned period-over-period increases in NGL and condensate volumes sold and higher natural gas residue prices, partially offset by decreases in natural gas volumes sold and NGL and condensate prices.

The increase was also driven by a fair value adjustment to the Kings Landing earn out contingent liability of $5.7 million.

Costs of sales (excluding depreciation and amortization) is included in the Midstream Logistics segment.

Operating expenses

Operating expenses increased by $20.3 million, or 36%, to $76.1 million for the three months ended September 30, 2025, compared to $55.8 million for the same period in 2024.

Of the total increase, $5.5 million was driven by Durango’s operations and the start-up of the Kings Landing plant, and $6.3 million was driven by Barilla Draw operations acquired in January 2025.

The remaining increase was primarily driven by increases in utility costs of $8.4 million.

Over 99% of operating expenses are included in the Midstream Logistics segment.

Depreciation and amortization expense

Depreciation and amortization expense increased by $7.8 million, or 9% to $95.4 million for the three months ended September 30, 2025, compared to $87.6 million for the same period in 2024.

Of the total increase, $2.4 million was from the Barilla Draw Acquisition completed in January 2025.

The remaining increase was driven by assets placed into service since the second quarter of 2024.

Other Income (Expenses)

Gain on sale of equity method investment

The gain on sale of equity method investment decreased by $30.0 million, or 100%, for the three months ended September 30, 2025, compared to the same period in 2024.

The decrease was related to the GCX divestiture consummated in the second quarter of 2024 and the related earn out that was realized during the third quarter of 2024.

Income Tax Expense

Income tax expense decreased by $7.2 million, or 87% to $1.1 million for the three months ended September 30, 2025, compared to $8.3 million for the same period in 2024.

The decrease is primarily driven by lower income before income taxes for the three months ended September 30, 2025

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

For the nine months ended September 30, 2025, revenue increased by $236.8 million, or 22%, to $1.33 billion, compared to $1.10 billion for the same period in 2024.

The increase was primarily driven by higher service and product revenue from the Durango Acquisition completed in June 2024 and the Barilla Draw Acquisition completed in January 2025.

(Loss) income before income taxes

(5,903) 21,829 (127 %)

Income tax (benefit) expense (778) 2,567 (130 %)

Net (loss) income including noncontrolling interest $ (5,125) $ 19,262 (127 %)

(1) Cost of sales (excluding depreciation and amortization) is net of gas service fees totaling $102.3 million and $62.2 million for the three months ended March 31, 2026 and 2025, respectively, for certain volumes, where we function as principal.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

For the three months ended March 31, 2026, revenue decreased by $33.3 million, or 8%, to $410.0 million, compared to $443.3 million for the same period in 2025.

The decrease was primarily driven by lower gas service revenues on gathered gas volumes where we function as an agent versus principal.

Service revenue

Service revenue for the nine months ended September 30, 2025, increased by $42.2 million, or 14%, to $343.9 million, compared to $301.7 million for the same period in 2024.

The increase was primarily driven by higher period-over-period gas gathering fees of $37.4 million.

Period-over-period gathered and processed gas volumes increased 376.8 MMcf per day, or 20% and 210.8 MMcf per day, or 13%, respectively.

Of the increase, Durango’s operations accounted for 170.4 MMcf per day and 161.0 MMcf per day of gathered and processed gas volume, respectively.

Over 97% of service revenues are included in the Midstream Logistics segment for the nine months ended September 30, 2025.

Service revenue for the three months ended March 31, 2026 decreased by $34.2 million, or 27%, to $93.8 million, compared to $127.9 million for the same period in 2025.

The period-over-period gathered and processed gas volumes increased by 105.9 MMcf per day, or 5% and 14.1 MMcf per day, or 1%, respectively.

However, the total gathered and processed gas volumes where we function as the agent decreased period-over-period, resulting in a decrease of $33.5 million to gas service fees presented as revenues, or 31%.

Over 97% of service revenues are included in the Midstream Logistics segment for the three months ended March 31, 2026.

Product revenue

Product revenue for the nine months ended September 30, 2025, increased by $194.6 million, or 25%, to $981.7 million, compared to $787.1 million for the same period in 2024, primarily due to increased NGL and condensate volumes sold and increased natural gas residue prices.

Period-over-period NGL and condensate volumes sold increased 9.5 million barrels, or 32%, of which, Durango’s operations accounted for 3.4 million barrels, partially offset by decreases in NGL and condensate prices of $1.53 per barrel, or 7% and $8.70 per barrel, or 12%, respectively.

The increase in product revenue was also driven by period-over-period increases in natural gas residue prices of $0.74 per MMBtu, or 58%, partially offset by a decrease in period-over-period natural gas residue volumes sold of 8.3 million MMBtu, or 18%.

Product revenue for the three months ended March 31, 2026 was flat compared to the same period in 2025, due to the confluence of offsetting variables.

Period-over-period NGL prices and natural gas residue prices decreased by $5.59 per barrel, or 23% and $1.43 per MMBtu, or 53%, respectively.

These pricing decreases were partially offset by period-over-period increases in NGL and condensate volumes sold of 3.2 million barrels, or 26%.

Period-over-period increases in natural gas residue sales volumes of 0.9 million MMBtu, or 9%, and condensate prices of $1.08 per barrel, or 2%, also helped partially offset the pricing headwinds.

Product revenue was also impacted by our commodity hedging activities.

Realized and unrealized losses increased $25.0 million for the three months ended March 31, 2026 compared to the same period in 2025.

Product revenues are included entirely in the Midstream Logistics segment.

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For the nine months ended September 30, 2025, cost of sales increased by $170.7 million, or 38%, to $615.5 million, compared to $444.8 million for the same period in 2024.

As discussed above, the increase was primarily driven by period-over-period increases in NGL and condensate volumes sold and higher natural gas residue prices, partially offset by decreases in NGL and condensate prices and natural gas residue volumes sold.

The increase was also driven by a fair value adjustment to Kings Landing earn out contingent liability of $5.7 million.

Over 100% of cost of sales (excluding depreciation and amortization) is included entirely in the Midstream Logistics segment.

For the three months ended March 31, 2026, cost of sales decreased by $34.6 million, or 16%, to $188.7 million, compared to $223.4 million for the same period in 2025.

The decrease was primarily driven by the aforementioned period-over-period decreases in NGL and natural gas prices, partially offset by an increase in NGL, condensate and natural gas residue volumes sold.

Over 99% of costs of sales (excluding depreciation and amortization) are included in the Midstream Logistics segment.

Operating expenses

Operating expenses increased by $64.5 million, or 45%, to $207.8 million for the nine months ended September 30, 2025, compared to $143.3 million for the same period in 2024.

Of the total increase, $33.2 million was driven by Durango’s operations that were acquired in late June 2024, which had a full nine months of operations in 2025 compared to one quarter of operations in the same period in 2024, and $16.0 million was driven by the Barilla Draw operations acquired in January 2025.

The remaining increase was primarily driven by increases in utility costs of $14.2 million.

Operating expenses increased by $6.7 million, or 11%, to $70.3 million for the three months ended March 31, 2026, compared to $63.6 million for the same period in 2025.

The increase was mainly driven by increases in utility costs of $4.6 million associated with increasing volumes on the system, and higher labor costs of $2.2 million, primarily related to the Kings Landing processing complex going into service during September 2025.

Over 99% of operating expenses are included in the Midstream Logistics segment.

General and administrative expenses

General and administrative expenses increased by $6.6 million, or 18%, to $44.2 million for the three months ended March 31, 2026, compared to $37.6 million for the same period in 2025.

The increase was mainly driven by an increase in legal fees of $9.0 million, partially offset by a decrease in labor and professional fees of $2.2 million.

Depreciation and amortization expense

Depreciation and amortization expense increased by $45.6 million, or 19%, to $281.8 million for the nine months ended September 30, 2025, compared to $236.3 million for the same period in 2024.

Of the total increase, $26.8 million was driven by the Durango Acquisition that was completed in late June 2024 and $7.2 million is from the Barilla Draw Acquisition completed in January 2025.

The remaining increase of $11.6 million was driven by assets placed in service since the second quarter of 2024.

Depreciation and amortization expense increased by $9.2 million, or 10%, to $101.8 million for the three months ended March 31, 2026, compared to $92.7 million for the same period in 2025.

Of the total increase, $6.3 million relates to Durango and Kings Landing being placed into service in September 2025, and the balance is associated with new assets being placed in service over the course of 2025.

Other Income (Expenses)

Gain on sale of equity method investments

Gain on sale of equity method investment decreased by $89.8 million, or 100%, for the nine months ended September 30, 2025, compared to the same period in 2024.

The decrease was related to the GCX divestiture, which was consummated in the second quarter of 2024.

Interest expense

Interest expense increased by $6.4 million, or 4%, to $173.9 million for the nine months ended September 30, 2025, compared to $167.5 million for the same period in 2024.

The increase in interest expense was primarily driven by a decrease in net realized and unrealized gains on interest rate swaps totaling $8.1 million and an increase in interest expenses of $5.2 million due to higher outstanding debt balances.

The increase was partially offset by an increase in capitalized interest of $7.4 million related to the Kings Landing Project.

Refer to Note—12 Derivatives and Hedging Activities in the Notes to Condensed Consolidated Financial Statements regarding the Company’s strategy in managing interest rate risk.

Income Tax Expense

Income tax expense decreased by $10.3 million, or 48% to $11.0 million for the nine months ended September 30, 2025, compared to $21.3 million for the same period in 2024.

The decrease is primarily driven by lower income before income taxes for the nine months ended September 30, 2025.

Equity in earnings of unconsolidated affiliates

Equity in earnings of unconsolidated affiliates decreased by $6.3 million, or 11%, to $51.2 million for the three months ended March 31, 2026, compared to $57.5 million for the same period in 2025.

The decrease was primarily driven by decreases in equity in earnings from Breviloba of $5.6 million due to normal operations, and EPIC of $3.4 million due to the divestiture of the Company’s equity interest in EPIC in October 2025.

The decrease was partially offset by an increase in equity in earnings from PHP of $2.7 million.

Key Performance Metrics

Adjusted EBITDA

Adjusted EBITDA is defined as net income including noncontrolling interest adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets and debt extinguishment, the proportionate EBITDA from our EMI pipelines, equity income and gain from sale of investments recorded using the equity method, share-based compensation expense, noncash increases and decreases related to commodity hedging activities, fair value adjustments to contingent liabilities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges.

Adjusted EBITDA is defined as net income or loss including noncontrolling interest adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets, the proportionate EBITDA from our EMI pipelines, equity income recorded using the equity method, share-based compensation expense, noncash increases and decreases related to commodity hedging activities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges.

Adjusted EBITDA provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance.

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• is widely used by analysts, investors and competitors to measure a company’s operating performance;

• is a financial measurement that is used by rating agencies and other parties to evaluate our credit worthiness;

• is a financial measurement that is used by rating agencies and other parties to evaluate our creditworthiness;

• is used by our management for various purposes, including as a basis for strategic planning and forecasting.

Adjusted EBITDA is not defined in GAAP

The GAAP measure used by the Company that is most directly comparable to Adjusted EBITDA is net income including noncontrolling interest.

Adjusted EBITDA should not be considered as an alternative to the GAAP measure of net income including noncontrolling interest or any other measure of financial performance presented in accordance with GAAP.

The GAAP measure used by the Company that is most directly comparable to Adjusted EBITDA is net income or loss including noncontrolling interest.

Adjusted EBITDA should not be considered as an alternative to the GAAP measure of net income or loss including noncontrolling interest or any other measure of financial performance presented in accordance with GAAP.

Adjusted EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect net income including noncontrolling interest.

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Reconciliation of non-GAAP financial measure

Company management compensates for the limitations of Adjusted EBITDA as an analytical tool by reviewing the comparable GAAP measure, understanding the differences between Adjusted EBITDA as compared to net income including noncontrolling interest, and incorporating this knowledge into its decision-making processes.

Company management compensates for the limitations of Adjusted EBITDA as an analytical tool by reviewing the comparable GAAP measure, understanding the differences between Adjusted EBITDA as compared to net income or loss including noncontrolling interest, and incorporating this knowledge into its decision-making processes.

Management believes that investors benefit from having access to the same financial measure that the Company uses in evaluating operating results.

The following table presents a reconciliation of the GAAP financial measure of net income including noncontrolling interest to the non-GAAP financial measure of Adjusted EBITDA.

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 % Change 2025 2024 % Change

The following table presents a reconciliation of the GAAP financial measure of net (loss) income including noncontrolling interest to the non-GAAP financial measure of Adjusted EBITDA.

Three Months Ended March 31,

2026 2025 % Change

(In thousands, except percentages)

Reconciliation of net income including noncontrolling interest to Adjusted EBITDA

Net income including noncontrolling interest $ 15,549 $ 83,654 (81 %) $ 109,227 $ 228,009 (52 %)

Reconciliation of net (loss) income including noncontrolling interest to Adjusted EBITDA

Net (loss) income including noncontrolling interest

$ (5,125) $ 19,262 (127 %)

Interest expense 53,420 55,714 (4 %)

Income tax expense 1,109 8,260 (87 %) 11,003 21,261 (48 %)

Income tax (benefit) expense

(778) 2,567 (130 %)

Depreciation and amortization expenses

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Share-based compensation 20,663 20,653 — %

Loss (gain) on disposal of assets, net

50 — 100 % (15) 4,090 (100 %)

Loss on debt extinguishment — — — % 635 525 21 %

Commodity hedging unrealized loss

46,987 18,127 159 %

Contingent liability fair value adjustment

5,700 1,400 NM 5,700 1,400 NM

Integration costs

368 3,538 (90 %)

Acquisition / divestiture transaction costs

Litigation costs

11,613 3,015 NM

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Interest income 167 790 (79 %)

Commodity hedging unrealized gain — 8,817 (100 %) 13,131 1,935 NM

Gain on sale of equity method investment

— 29,953 (100 %) — 89,837 (100 %)

Gain on disposal of assets, net

Equity in earnings of unconsolidated affiliates

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For the three months ended September 30, 2025, Adjusted EBITDA decreased by $23.0 million, or 9%, to $242.6 million, compared to $265.7 million for the same period in 2024.

As discussed in Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report, the decrease was primarily driven by increased cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expense totaling $112.8 million, partially offset by an increase in operating revenue of $67.6 million.

Further offsetting the increases in expenses were period over period net changes in unrealized gain / loss in commodity hedging activities of $15.3 million, and higher fair value adjustments to contingent liabilities of $4.3 million.

Adjusted EBITDA increased by $1.9 million, to $735.6 million for the nine months ended September 30, 2025, compared to $733.6 million for the same period in 2024.

As discussed in Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report Form 10-Q, the increase was due to increased total operating revenue of $236.8 million, offset by increased cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses totaling $234.3 million.

The increase was also driven by increases related to integration, transaction and other one-time costs or amortization of $12.1 million and higher fair value adjustments to contingent liabilities of $4.3 million, partially offset by a decrease in stock based compensation of $8.3 million and an increase in unrealized gain in commodity hedging activities of $11.2 million.

For the three months ended March 31, 2026, Adjusted EBITDA increased by $1.2 million, or 0.5%, to $251.2 million, compared to $250.0 million for the same period in 2025.

As discussed in Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report, the change reflected lower operating revenues of $33.3 million, which was primarily driven by an increase in unrealized loss on commodity hedging activities of $28.9 million, thus mostly EBITDA neutral, and lower proportionate EMI EBITDA of $17.5 million, partially offset by lower cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $19.4 million.

The remaining decrease was fully offset by higher net one-time costs related primarily to integration and litigation totaling $3.5 million.

Segment Adjusted EBITDA

Segment Adjusted EBITDA is defined as segment net income or loss including noncontrolling interest adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets and debt extinguishment, the proportionate EBITDA from our EMI pipelines, equity income and gain from sale of investments recorded using the equity method, share-based compensation expense, noncash increases and decreases related to commodity hedging activities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges.

The following table presents Segment Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024.

Segment Adjusted EBITDA is defined as segment net income or loss including noncontrolling interest adjusted for interest, taxes, depreciation and amortization, gain or loss on disposal of assets and debt extinguishment, the proportionate EBITDA from our EMI pipelines, equity income recorded using the equity method, share-based compensation expense, noncash increases and decreases related to commodity hedging activities, integration and transaction costs and extraordinary losses and unusual or non-recurring charges.

The following table presents Segment Adjusted EBITDA for the three months ended March 31, 2026 and 2025.

Also refer to Note 17—Segments in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for a reconciliation of Segment Adjusted EBITDA to net income before income taxes.

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(In thousands, except percentages)

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(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.

Midstream Logistics Segment Adjusted EBITDA decreased by $22.3 million, or 13%, to $151.4 million for the three months ended September 30, 2025, compared to $173.6 million for the same period in 2024.

The decrease was primarily due to increased cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses of $111.9 million, partially offset by an increase in total operating revenue of $67.5 million.

The reasons for the fluctuations are discussed in Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report on Form 10-Q.

Midstream Logistics Segment Adjusted EBITDA decreased by $1.4 million, to $462.8 million for the nine months ended September 30, 2025, compared to $464.2 million for the same period in 2024.

The decrease was primarily due to increased cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses of $241.6 million, partially offset by increased total operating revenue of $236.4 million.

Further offsetting the increases in expenses were higher fair value adjustments to contingent liabilities fair of $4.3 million and higher integration, transaction and other one-time costs or amortization of $8.9 million, partially offset by an increase in unrealized gains in commodity hedging activities of $11.2 million.

Midstream Logistics Segment Adjusted EBITDA increased by $18.7 million, or 12%, to $178.9 million for the three months ended March 31, 2026, compared to $160.2 million for the same period in 2025.

The change reflected lower cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses totaling $26.0 million, partially offset by a lower operating revenues of $33.2 million, which was primarily driven by an increase in unrealized loss on commodity hedging activities of $28.9 million, which is EBITDA neutral.

The reasons for the fluctuations are discussed in Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations to this Quarterly Report on Form 10-Q.

Pipeline Transportation Segment Adjusted EBITDA was $95.5 million and $286.1 million for the three and nine months ended September 30, 2025, respectively, which were consistent with the corresponding 2024 periods.

Pipeline Transportation Segment Adjusted EBITDA decreased by $15.9 million, or 17%, to $78.0 million for the three months ended March 31, 2026, compared to $93.9 million for the same period in 2025.

The decrease was mainly due to lower proportionate EMI EBITDA of $17.5 million, primarily related to the divestiture of the Company’s equity interest in EPIC during October 2025.

Contractual Obligations

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The Company’s primary use of capital since inception has been for the initial construction of gathering and processing assets, as well as the acquisition of businesses and EMI pipelines and associated subsequent construction costs.

For 2025, the Company’s primary spending requirements are related to business acquisitions and other budgeted capital expenditures for the construction and maintenance of gathering and processing assets, the Company’s contractual debt obligations, quarterly cash dividends and repurchases of its Class A Common Stock pursuant to the Repurchase Program from time to time.

During the nine months ended September 30, 2025, the Company’s primary sources of cash were distributions from the EMI pipelines, borrowings under the revolving credit facility and A/R Facility, and cash generated from operations.

Based on the Company’s current financial plan, the Company believes that cash from operations and distributions from the EMI pipelines and remaining borrowing capacity on our credit facilities will generate cash flows in excess of capital expenditures and the amount required to fund the Company’s planned quarterly dividend over the next 12 months.

For 2026, the Company’s primary spending requirements are related to budgeted capital expenditures for the construction and maintenance of gathering and processing assets, the Company’s contractual debt obligations, quarterly cash dividends and repurchases of its Class A Common Stock pursuant to the Repurchase Program from time to time.

During the three months ended March 31, 2026, the Company’s primary sources of cash were distributions from the EMI pipelines, borrowings under the revolving credit facility and Amended A/R Facility, and cash generated from operations.

Based on the Company’s current financial plan, the Company believes that cash from operations, distributions from the EMI pipelines and remaining borrowing capacity on our credit facilities will generate cash flows in excess of capital expenditures and the amount required to fund the Company’s planned quarterly dividend over the next 12 months.

The following table presents a summary of the Company’s key liquidity indicators at the dates presented:

September 30, 2025

March 31, 2026

(In thousands)

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Available Borrowing Capacity

A/R Facility $ 250,000 $ 178,600 $ — $ 71,400

Amended A/R Facility

$ 225,000 $ 187,100 $ — $ 37,900

Revolving Line of Credit 1,600,000 468,000 12,600 1,119,400

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Available Borrowing Capacity

A/R Facility $ 150,000 $ 140,200 $ — $ 9,800

Amended A/R Facility $ 250,000 $ 165,200 $ — $ 84,800

Revolving Line of Credit 1,600,000 453,000 12,600 1,134,400

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Our senior unsecured notes are fixed rate borrowings;

however, we have some exposure to the risk of changes in interest rates, primarily as a result of the variable rate borrowings under the term loan, revolving credit facilities and the A/R Facility.

however, we have some exposure to the risk of changes in interest rates, primarily as a result of the variable rate borrowings under the term loan, revolving credit facilities and the Amended A/R Facility.

We use interest rate swaps to mitigate the impact of changes in interest rates on cash flows.

See Note 12—Derivatives and Hedging Activities in the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report for detailed discussion.

As of September 30, 2025, we had $1.05 billion of our 6.625% senior unsecured notes due 2028 and $1.00 billion of our 5.875% senior unsecured notes due 2030 outstanding.

As of March 31, 2026, we had $1.05 billion of our 6.625% senior unsecured notes due 2028 and $1.00 billion of our 5.875% senior unsecured notes due 2030 outstanding.

On May 30, 2025, the Partnership entered into the Term Loan Credit Agreement.

The proceeds were used to repay and terminate the 2022 Term Loan Credit Agreement.

As of September 30, 2025, we had an outstanding borrowing of $1.15 billion under the Term Loan Credit Agreement.

As of March 31, 2026, we had an outstanding borrowing of $1.15 billion under the Term Loan Credit Agreement.

Revolving Credit Agreement

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All borrowings under the Revolving Credit Agreement mature on May 30, 2030, unless such maturity date is adjusted in accordance with the Revolving Credit Agreement.

As of September 30, 2025, we had an outstanding borrowing of $783.0 million and remaining borrowing capacity of $804.4 million.

On April 1, 2025, the Partnership entered into an amendment to its A/R Facility to, among other things, increase the facility limit to $250.0 million and extend the scheduled termination date to March 31, 2026.

As of September 30, 2025, we had an outstanding borrowing of $178.6 million and remaining borrowing capacity of $71.4 million.

As of March 31, 2026, we had an outstanding borrowing of $468.0 million and remaining borrowing capacity of $1.12 billion.

On March 31, 2026, the Partnership executed Amendment No.

2 to its Amended A/R Facility, with PNC Bank.

Pursuant to this amendment, the facility limit was reduced to $225.0 million, and the scheduled termination date was extended to March 30, 2027.

Furthermore, Amendment No.

2 introduced an option permitting Kinetik Receivables to request an increase in commitments of up to $50.0 million in aggregate, subject to the Purchaser’s approval.

Amendment No.

2 also removed all sustainability-linked pricing provisions previously applicable under the A/R Facility.

As of March 31, 2026, eligible accounts receivable of $187.1 million were pledged to the Amended A/R Facility as collateral and $37.9 million was available to be invested by the purchasers.

Capital Requirements and Expenditures

Our operations can be capital intensive, requiring investments to expand, upgrade, maintain or enhance existing operations and to meet environmental and operational regulations.

During the nine months ended September 30, 2025 and 2024, capital spending for property, plant and equipment totaled $358.4 million and $155.8 million, respectively, intangible asset purchases totaled $30.9 million and $7.7 million, respectively, and contributions to EMI totaled $1.2 million and $3.3 million, respectively.

The increase in capital spending was mainly related to the Kings Landing Project, which was completed in the third quarter of 2025.

During the three months ended March 31, 2026 and 2025, capital spending mainly consisted of spending on property, plant and equipment totaling $83.0 million and $74.5 million,

respectively, and intangible asset purchases totaling $6.1 million and $6.9 million, respectively.

Management believes its existing gathering, processing and transmission infrastructure capacity and future planned projects are capable of fulfilling its midstream contracts to service its customers.

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The following tables present cash flows from operating, investing and financing activities during the periods presented:

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

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$ (89,129) $ (260,138)

Cash provided by (used in) financing activities

Cash (used in) provided by financing activities

$ (94,533) $ 88,547

Operating activities .

Net cash provided by operating activities increased by $0.7 million for the nine months ended September 30, 2025, compared with the same period in 2024.

Net cash provided by operating activities increased by $3.6 million for the three months ended March 31, 2026 to $180.4 million, compared to $176.8 million for the same period in 2025.

The change in the operating cash flows reflected (i) a decrease in net income including noncontrolling interest of $24.4 million;

(ii) an increase in adjustments related to non-cash items of $80.8 million, which was mainly driven by a decrease in gain related to sale of equity method investment of $89.8 million and an increase in depreciation and amortization expense of $45.6 million, partially offset by a decrease in distributions from unconsolidated affiliates of $18.5 million, and a favorable derivative fair value adjustment of $14.4 million compared to an unfavorable derivative fair value adjustment of $8.9 million in the same period in 2024;

and (iii) an increase in working capital of $38.6 million.

(ii) an increase in adjustments related to non-cash items of $43.7 million, which was mainly driven by an increase in non-cash derivative fair value adjustments and lower derivative cash settlements, together totaling $26.2 million, an increase in depreciation and amortization expense of $9.2 million, and a decrease in equity in earnings of unconsolidated affiliates of $6.3 million;

and (iii) a decrease in working capital of $15.7 million.

Investing activities .

Net cash used in investing activities increased by $497.0 million for the nine months ended September 30, 2025 to $562.9 million, compared to $65.9 million used in the same period in 2024.

The increase was primarily driven by proceeds from the sale of GCX in 2024 that totaled $524.4 million and offset almost all of 2024’s capital investment expenditures.

Additionally, we incurred higher capital spending for property, plant and equipment of $202.5 million and intangible assets of $23.1 million, mainly related to the Kings Landing Project, partially offset by a decrease in cash used in business and EMI acquisitions of $251.1 million.

Net cash used in investing activities decreased by $171.0 million for the three months ended March 31, 2026 to $89.1 million, compared to $260.1 million used in the same period in 2025.

The decrease was primarily driven by a decrease in cash used in business acquisitions of $178.4 million related to the Barilla Draw Acquisition completed in January 2025.

The decrease was partially offset by higher capital spending for property, plant and equipment of $8.5 million.

Financing activities .

Net cash provided by financing activities was $73.0 million for the nine months ended September 30, 2025, which was primarily comprised of net proceeds from the issuance of long-term debt, revolving credit facility and A/R Facility of $619.3 million, partially offset by cash dividends of $373.8 million paid to the holders of Class A Common Stock and Common Units and cash paid to repurchase Class A Common Stock totaling $172.6 million, compared with net cash used in financing activities of $411.5 million for the nine months ended September 30, 2024, which was primarily comprised of net payments to the Company’s long-term debt, revolving credit facility and A/R Facility of $138.6 million and cash dividends of $272.9 million paid to the holders of Class A Common Stock and Common Units.

During the nine months ended September 30, 2025, the Company made cash dividend payments of $373.8 million to holders of Class A Common Stock and Common Units and $1.1 million was reinvested in shares of Class A Common Stock by the Reinvestment Holders.

On October 15, 2025, the Board declared a cash dividend of $0.78 per share on the Company’s Class A Common Stock which became payable to stockholders on October 31, 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 became payable on October 31, 2025.

Net cash used in financing activities was $94.5 million for the three months ended March 31, 2026, which was primarily comprised of net proceeds from revolving credit facility and Amended A/R Facility of $36.8 million, fully offset by cash dividends of $131.3 million paid to the holders of Class A Common Stock and Common Units, compared with net cash provided by financing activities of $88.5 million for the three months ended March 31, 2025, which was primarily comprised of net proceeds from the Company’s long-term debt, revolving credit facility and Amended A/R Facility of $211.7 million, partially offset by cash dividends of $123.2 million paid to the holders of Class A Common Stock and Common Units.

During the three months ended March 31, 2026, the Company made cash dividend payments of $131.3 million to holders of Class A Common Stock and Common Units and $0.5 million was reinvested in shares of Class A Common Stock by holders of Class A Common Stock and Common Units.

On April 16, 2026, the Board declared a cash dividend of $0.81 per share on the Company’s Class A Common Stock which was paid on May 1, 2026.

The Company, through its ownership of the general partner of the Partnership, declared a distribution of $0.81 per Common Unit from the Partnership to the holders of Common Units, which was paid on May 1, 2026.

As described in these Condensed Consolidated Financial Statements, as the context requires, dividends paid to holders of Class A Common Stock and distributions paid to holders of Common Units may be referred to collectively as “dividends.”

Share Repurchase Program

In February 2023, the Board approved a share repurchase program (“Repurchase Program”), authorizing discretionary purchases of the Company’s Class A Common Stock up to $100 million in the aggregate.

In February 2023, the Board approved the Repurchase Program, authorizing discretionary purchases of the Company’s Class A Common Stock up to $100.0 million in aggregate.

In May 2025, the Board approved a $400.0 million increase to the previously announced Repurchase Program, pursuant to which we are authorized to repurchase the Company’s Class A Common Stock for an aggregate purchase price of up to $500.0 million.

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

During the three and nine months ended September 30, 2025, the Company repurchased 2.4 million shares at a total cost of $100.0 million and 4.0 million shares at a total cost of 172.6 million, respectively.

Furthermore, during the third quarter of 2025, the Company retired the entirety of the 4.0 million shares held as treasury stock.

There was $321.7 million available under the Repurchase Program as of September 30, 2025.

During the three months ended March 31, 2026, the Company did not repurchase any of its Class A Common Stock under the Repurchase Program.

Off-Balance Sheet Arrangements

As of September 30, 2025, there were no off-balance sheet arrangements.

As of March 31, 2026, there were no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates from those disclosed on our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no significant changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Please refer to information regarding our critical accounting policies and estimates included in Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Commission on March 3, 2025.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Commission on February 26, 2026.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis