What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-08 · 139 added, 107 removed, 196 unchanged (56% 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 months ended March 31, 2026, as compared to our results of operations for the same period in 2025.

The following discussion and analysis addresses the results of our operations for the three and six months ended June 30, 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.

We are an integrated midstream energy company in the Permian Basin providing comprehensive gathering, transportation, compression, processing and treating services.

Our operations are strategically located in the heart of the Delaware Basin in the Permian, one of the fastest growing oil and gas development regions in the world.

Our core capabilities include a variety of service offerings including natural gas gathering, transportation, compression, treating and processing;

NGLs stabilization and transportation;

NGL stabilization and transportation;

produced water gathering and disposal;

and crude oil gathering, stabilization, storage and transportation.

Our operations are strategically located in the heart of the Delaware Basin.

Our Operations and Segments

We have two reportable segments with revenue streams from various products and services.

We operate through two reportable segments that generate revenue from various products and services.

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

Gulf Coast and Mexico markets, along with the Kinetik NGL and Delaware Link Pipelines.

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

15 unchanged sentences

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.

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

Kinetik NGL Pipeline System.

4 unchanged sentences

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.

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

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

Recent Developments

1 unchanged sentence

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

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

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.

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

Amendment No.

3 unchanged sentences

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.

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.

Recent geopolitical developments in the Middle East, including the ongoing military conflict involving Iran, disruptions and uncertainty surrounding maritime traffic through the Strait of Hormuz and related impacts on global energy markets, 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.

4 unchanged sentences

Inflation and Interest Rates

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.

The annual rate of inflation in the United States was 3.5% in June 2026 as measured by the Consumer Price Index.

The FOMC decided to maintain the target range for the federal funds rate at 3.50% - 3.75% during its meeting in July 2026.

During the meeting, the FOMC noted the economic activities is expanding at a solid pace;

despite elevated uncertainty owing, in part, to the conflict in the Middle East.

Productivity growth and capital investment remain strong, job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated relative to the Committee’s 2 percent goal, in part, reflecting supply shocks that have driven price increases in certain sectors, including energy.

The FOMC reaffirmed its commitment to deliver price stability and its policy of maintaining ample reserves in the banking system.

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

Refer to Note 12—Derivatives and Hedging Activities in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for additional discussion regarding our hedging strategies and objectives for interest rate risk.

1 unchanged sentence

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

Three Months Ended March 31,

2026 2025 % Change

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

2026 2025 % Change 2026 2025 % Change

(In thousands, except percentages)

15 unchanged sentences

Total operating costs and expenses 447,463 349,283 28 % 861,277 773,266 11 %

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

Operating income 133,977 77,455 73 % 130,139 96,735 35 %

Other income (expense):

Interest and other income 297 2,732 (89 %) 464 3,517 (87 %)

Loss on debt extinguishment — (635) (100 %) — (635) (100 %)

Interest expense (54,121) (56,514) (4 %) (107,541) (112,228) (4 %)

Equity in earnings of unconsolidated affiliates 57,383 58,705 (2 %) 108,571 116,183 (7 %)

Total other (expense) income, net

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

(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.

Total other income, net 3,559 4,288 (17 %) 1,494 6,837 (78 %)

Income before income taxes 137,536 81,743 68 % 131,633 103,572 27 %

Income tax expense 14,423 7,327 97 % 13,645 9,894 38 %

Net income including noncontrolling interest $ 123,113 $ 74,416 65 % $ 117,988 $ 93,678 26 %

(1) Cost of sales (excluding depreciation and amortization) is net of gas service fees totaling $110.6 million and $73.6 million for the three months ended June 30, 2026 and 2025, respectively, and $212.8 million and $135.8 million for the six months ended June 30, 2026 and 2025, respectively, for certain volumes, where we function as principal.

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

For the three months ended June 30, 2026, revenue increased by $154.7 million, or 36%, to $581.4 million, compared to $426.7 million for the same period in 2025.

The increase was primarily driven by higher product revenue due to higher NGL, condensate and natural gas residue volumes sold, as well as higher NGL and condensate prices.

Service revenue

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.

Service revenue for the three months ended June 30, 2026 decreased by $25.8 million, or 23%, to $86.9 million, compared to $112.7 million for the same period in 2025, driven by decreases in period-over-period gathered and processed gas volumes of 101.1 MMcf per day, or 5%, and 1.6 MMcf per day, or 0.1%, respectively.

In addition, the total gathered and processed gas volumes where we function as principal increased period-over-period, resulting in higher amounts of fee revenue reported within cost of sales.

Over 97% of service revenues are included in the Midstream Logistics segment for the three months ended June 30, 2026.

Product revenue

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 revenue for the three months ended June 30, 2026 increased by $179.2 million, or 58%, to $490.8 million compared to $311.6 million for the same period in 2025, primarily driven by increases in NGL, condensate, and natural gas residue volumes, as well as increased NGL and condensate prices.

Period-over-period NGL and condensate volumes sold increased by 5.4 million barrels, or 40%, and period-over-period natural gas residue volumes sold increased by 5.5 million MMBtu, or 44%.

The increase was also driven by increases in NGL and condensate prices of $3.52 per barrel, or 18%, and $35.49 per barrel, or 56%, respectively.

The increase was partially offset by a decrease in natural gas residue price of $2.56 per MMBtu, or 140%.

Product revenues are included entirely in the Midstream Logistics segment.

2 unchanged sentences

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 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.

For the three months ended June 30, 2026, cost of sales increased by $80.9 million, or 52%, to $237.6 million, compared to $156.7 million for the same period in 2025.

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

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

Operating expenses

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.

Operating expenses increased by $3.9 million, or 6%, to $71.9 million for the three months ended June 30, 2026, compared to $68.0 million for the same period in 2025.

The increase was mainly driven by increases in utility costs of $4.6 million primarily related to higher electricity rates and the Kings Landing processing complex going into service during September 2025 and higher labor costs of $0.7 million, primarily related to Kings Landing.

The increase was partially offset by a decrease in equipment rental cost of $1.8 million.

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

Depreciation and amortization expense

Depreciation and amortization expense increased by $9.6 million, or 10%, to $103.3 million for the three months ended June 30, 2026, compared to $93.8 million for the same period in 2025.

Of the total increase, $6.4 million primarily related to Kings Landing being placed into service in September 2025, and the balance was associated with new assets being placed in service over the course of 2025 and the first half of 2026.

Income Tax Expenses

Income tax expense increased by $7.1 million, or 97%, to $14.4 million for the three months ended June 30, 2026, compared to $7.3 million for the same period in 2025.

The increase was primarily driven by higher income before income taxes for the three months ended June 30, 2026.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

For the six months ended June 30, 2026, revenue increased by $121.4 million, or 14%, to $991.4 million, compared to $870.0 million for the same period in 2025.

The increase was primarily driven by higher product revenue due to higher NGL, condensate and natural gas residue volumes sold and higher condensate prices.

Service revenue

Service revenue for the six months ended June 30, 2026 decreased by $59.9 million, or 25%, to $180.7 million, compared to $240.6 million for the same period in 2025, driven by a period-over-period decrease in gathered gas volumes of 85.8 MMcf per day, or 4%, partially offset by a period-over-period increase in processed gas volumes of 6.2 MMcf per day, or 0.4%.

In addition, the total gathered and processed gas volumes where we function as the principal increased period-over-period, resulting in higher amounts of fee revenue reported within cost of sales.

Over 97% of service revenues are included in the Midstream Logistics segment for the six months ended June 30, 2026.

Product revenue

Product revenue for the six months ended June 30, 2026 increased by $178.9 million, or 29%, to $803.0 million, compared to $624.1 million for the same period in 2025, primarily driven by increases in NGL, condensate, and natural gas residue volumes sold and an increase in condensate prices.

Period-over-period NGL and condensate volumes sold increased by 8.6 million barrels, or 33%, and period-over-period natural gas residue volumes sold increased by 6.4 million MMBtu, or 29%.

The increase was also driven by an increase in condensate prices of $16.83 per barrel, or 25%.

These increases were partially offset by decreases in NGL and natural gas residue prices of $0.92 per barrel, or 4%, and $1.98 per MMBtu, or 87%, respectively.

Product revenues are included entirely in the Midstream Logistics segment.

Operating Costs and Expenses

Costs of sales (excluding depreciation and amortization)

For the six months ended June 30, 2026, cost of sales increased by $46.3 million, or 12%, to $426.3 million, compared to $380.1 million for the same period in 2025.

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

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

Operating expenses

Operating expenses increased by $10.6 million, or 8%, to $142.2 million for the six months ended June 30, 2026, compared to $131.6 million for the same period in 2025.

The increase was mainly driven by increases in utility costs of $9.2 million primarily related to higher electricity rates and the Kings Landing processing complex going into service during September 2025, and higher labor costs of $3.0 million, primarily related to Kings Landing.

The increase was partially offset by a decrease in equipment rental cost of $2.5 million.

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.

General and administrative expenses increased by $8.6 million, or 14%, to $70.5 million for the six months ended June 30, 2026, compared to $61.8 million for the same period in 2025.

The increase was mainly driven by an increase in litigation related fees of $12.0 million, partially offset by a decrease in labor and professional fees of $3.1 million.

Depreciation and amortization expense

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.

Depreciation and amortization expense increased by $18.7 million, or 10%, to $205.2 million for the six months ended June 30, 2026, compared to $186.4 million for the same period in 2025.

Of the total increase, $12.7 million primarily relates to 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 and the first half of 2026.

Other Income (Expenses)

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.

Equity in earnings of unconsolidated affiliates decreased by $7.6 million, or 7%, to $108.6 million for the six months ended June 30, 2026, compared to $116.2 million for the same period in 2025.

The decrease was primarily driven by decreases in equity in earnings from Breviloba of $8.5 million, and EPIC of $7.5 million due to the divestiture of the Company’s related equity interest in October 2025.

The decrease was partially offset by an increase in equity in earnings from PHP of $8.4 million.

1 unchanged sentence

Adjusted EBITDA

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 is defined as 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 nonrecurring 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.

5 unchanged sentences

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 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.

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.

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

2 unchanged sentences

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 or loss 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 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 (loss) income including noncontrolling interest to the non-GAAP financial measure of Adjusted EBITDA.

Three Months Ended March 31,

2026 2025 % Change

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 June 30, Six Months Ended June 30,

2026 2025 % Change 2026 2025 % Change

(In thousands, except percentages)

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

Net (loss) income including noncontrolling interest

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

Reconciliation of net income including noncontrolling interest to Adjusted EBITDA

Net income including noncontrolling interest $ 123,113 $ 74,416 65 % $ 117,988 $ 93,678 26 %

Interest expense 54,121 56,514 (4 %) 107,541 112,228 (4 %)

Income tax (benefit) expense

(778) 2,567 (130 %)

Income tax expense 14,423 7,327 97 % 13,645 9,894 38 %

Depreciation and amortization expenses

3 unchanged sentences

Share-based compensation 9,064 9,695 (7 %) 29,727 30,348 (2 %)

Commodity hedging unrealized loss

46,987 18,127 159 %

Loss on debt extinguishment — 635 (100 %) — 635 (100 %)

Integration costs

4 unchanged sentences

Interest income 297 318 (7 %) 464 1,108 (58 %)

Commodity hedging unrealized gain 49,598 37,743 31 % 2,611 19,616 (87 %)

Gain on disposal of assets, net

36 25 44 % 55 65 (15 %)

Equity in earnings of unconsolidated affiliates

2 unchanged sentences

NM - not meaningful

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.

For the three months ended June 30, 2026, Adjusted EBITDA increased by $37.9 million, or 16%, to $280.8 million, compared to $242.9 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 was driven by higher operating revenues of $154.7 million, partially offset by higher cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $88.6 million, a decrease in proportionate EMI EBITDA of $13.2 million, primarily resulting from the divestiture of the Company’s equity interest in EPIC, and an increase in unrealized gain on commodity hedging activities of $11.9 million.

For the six months ended June 30, 2026, Adjusted EBITDA increased by $39.0 million, or 8%, to $532.0 million, compared to $493.0 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 higher operating revenues of $121.4 million, partially offset by higher cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $69.3 million, a decrease in proportionate EMI EBITDA of $30.7 million, primarily resulting from the divestiture of the Company’s equity interest in EPIC, and a decrease in unrealized gain on commodity hedging activities of $17.0 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 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.

The following table presents Segment Adjusted EBITDA for the three and six months ended June 30, 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 March 31,

2026 2025 % Change

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

2026 2025 % Change 2026 2025 % Change

(In thousands, except percentages)

8 unchanged sentences

(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 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.

Midstream Logistics Segment Adjusted EBITDA increased by $53.6 million, or 35%, to $204.8 million for the three months ended June 30, 2026, compared to $151.2 million for the same period in 2025.

The change was primarily driven by higher operating revenues of $155.0 million, partially offset by lower cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $85.8 million, and an increase in unrealized gain on commodity hedging activities of $11.9 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.

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.

Midstream Logistics Segment Adjusted EBITDA increased by $72.3 million, or 23%, to $383.7 million for the six months ended June 30, 2026, compared to $311.4 million for the same period in 2025.

The change was primarily driven by higher operating revenues of $121.9 million, partially offset by higher cost of sales (excluding depreciation and amortization), operating expenses, ad valorem taxes and general and administrative expenses, totaling $59.9 million, and a decrease in unrealized gain on commodity hedging activities of $17.0 million.

The remaining increase was partially offset by a decrease in other income of $2.4 million and lower integration costs of $4.4 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.

Pipeline Transportation Segment Adjusted EBITDA decreased by $13.8 million, or 14%, to $83.0 million for the three months ended June 30, 2026, compared to $96.8 million for the same period in 2025.

The decrease was mainly due to lower proportionate EMI EBITDA of $13.2 million, primarily related to the divestiture of the Company’s equity interest in EPIC during October 2025.

Pipeline Transportation Segment Adjusted EBITDA decreased by $29.7 million, or 16%, to $161.0 million for the six months ended June 30, 2026, compared to $190.7 million for the same period in 2025.

The decrease was mainly due to lower proportionate EMI EBITDA of $30.7 million, primarily related to the divestiture of the Company’s equity interest in EPIC during October 2025.

Contractual Obligations

4 unchanged sentences

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 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.

During the six months ended June 30, 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:

March 31, 2026

June 30, 2026

(In thousands)

1 unchanged sentence

Available Borrowing Capacity

Amended A/R Facility

$ 225,000 $ 187,100 $ — $ 37,900

A/R Facility $ 225,000 $ 225,000 $ — $ —

Revolving Line of Credit 1,600,000 523,000 12,600 1,064,400

6 unchanged sentences

Available Borrowing Capacity

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

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

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

8 unchanged sentences

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 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.

As of June 30, 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 March 31, 2026, we had an outstanding borrowing of $1.15 billion under the Term Loan Credit Agreement.

As of June 30, 2026, we had an outstanding borrowing of $1.15 billion under the Term Loan Credit Agreement.

Revolving Credit Agreement

2 unchanged sentences

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

As of June 30, 2026, we had an outstanding borrowing of $523.0 million and remaining borrowing capacity of $1.06 billion.

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

2 unchanged sentences

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.

2 introduced an option permitting Kinetik Receivables LLC 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.

As of June 30, 2026, eligible

accounts receivable of $225.0 million were pledged to the Amended A/R Facility as collateral.

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 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.

Our operations require investments to expand, upgrade, maintain or enhance existing operations and to meet environmental and operational regulations.

During the six months ended June 30, 2026 and 2025, capital spending mainly consisted of spending on property, plant and equipment totaling $192.3 million and $201.8 million, respectively, and intangible asset purchases totaling $12.1 million and $15.6 million, respectively.

The Company anticipates its existing capital resources will be sufficient to fund future capital expenditures for EMI pipelines and the Company’s existing infrastructure assets over the next 12 months.

1 unchanged sentence

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

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

5 unchanged sentences

Operating activities .

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;

Net cash provided by operating activities increased by $35.6 million for the six months ended June 30, 2026 to $341.5 million, compared to $305.9 million for the same period in 2025.

The change in the operating cash flows reflected (i) an increase in net income including noncontrolling interest of $24.3 million;

(ii) an increase in adjustments related to non-cash items of $45.8 million, which was mainly driven by an increase in non-cash derivative fair value adjustments and lower derivative cash settlements, together totaling $12.6 million, an increase in depreciation and amortization expense of $18.7 million, and a decrease in equity in earnings of unconsolidated affiliates of $7.6 million;

1 unchanged sentence

Investing activities .

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.

Net cash used in investing activities decreased by $187.4 million for the six months ended June 30, 2026 to $204.2 million, compared to $391.6 million used in the same period in 2025.

The decrease was primarily driven by a decrease in cash used in business acquisitions of $176.2 million related to the Barilla Draw Acquisition completed in January 2025 and decreases in property, plant and equipment and intangible asset expenditures of $9.6 million and $3.5 million, respectively.

Financing activities .

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.

Net cash used in financing activities was $133.4 million for the six months ended June 30, 2026, which was comprised of net proceeds from the revolving credit facility and Amended A/R Facility of $129.6 million, fully offset by cash dividends of $263.1 million paid to the holders of Class A Common Stock and Common Units, compared with net cash provided by financing activities of $92.8 million for the six months ended June 30, 2025, which was comprised of net proceeds from the Company’s long-term debt, revolving credit facility and Amended A/R Facility of $412.2 million, fully offset by cash dividends of $246.8 million paid to the holders of Class A Common Stock and Common Units and cash paid to repurchase Class A Common Stock of $72.6 million.

During the six months ended June 30, 2026, the Company made cash dividend payments of $263.1 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 Class A Common Stock and Common Units holders.

On July 14, 2026, the Board declared a cash dividend of $0.81 per share on the Company’s Class A Common Stock, which was paid to stockholders on July 31, 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.”

1 unchanged sentence

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.

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

In May 2025, the Board approved a $400.0 million increase to the previously announced Repurchase Program.

Repurchases may be made at management’s discretion from time to time and will depend on market conditions and may be discontinued at any time without prior notice.

During the six months ended June 30, 2026, the Company did not repurchase any of its Class A Common Stock under the Repurchase Program.

Off-Balance Sheet Arrangements

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

As of June 30, 2026, there were no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

3 unchanged sentences

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