Kinetik Holdings Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income including noncontrolling interest was $50.9 million for the three months ended September 30, 2026, compared to $15.5 million in the same period in 2025; for the nine months ended September 30, 2026, net income was $168.9 million, compared to $109.2 million in 2025.
• Adjusted EBITDA was $278.1 million for the three months ended September 30, 2026, a 15% increase from $242.6 million in the prior year period; for the nine months ended September 30, 2026, Adjusted EBITDA was $810.1 million, an 10% increase from $735.6 million in 2025.
• Distributable Cash Flow was $213.7 million for the three months ended September 30, 2026, compared to $158.5 million in 2025; for the nine months ended September 30, 2026, Distributable Cash Flow was $589.5 million, compared to $468.8 million in 2025.
• Free Cash Flow was $87.5 million for the three months ended September 30, 2026, compared to $13.9 million in 2025; for the nine months ended September 30, 2026, Free Cash Flow was $294.1 million, compared to $132.3 million in 2025.
• Capital expenditures were $130.6 million for the three months ended September 30, 2026, and $327.9 million for the nine months ended September 30, 2026.
• Net Debt was $3.94 billion as of September 30, 2026.
• Liquidity (cash and revolver availability) was $1.07 billion as of September 30, 2026.
• Leverage Ratio was 3.70x as of September 30, 2026.
• Net Debt to Adjusted EBITDA Ratio was 3.71x as of September 30, 2026.
• Dividend Coverage Ratio was 1.61x for the three months ended September 30, 2026, and 1.48x for the nine months ended September 30, 2026.
• Quarterly dividend per share was $0.81.

Guidance and Future Outlook:

• Full year 2026 Adjusted EBITDA is expected to be at the high end of the $1.04 billion to $1.1 billion guidance range.
• Full year 2026 Capital Expenditures are anticipated to be approximately 5% below the August 2026 guidance of $560 million.
• Processed gas volumes are tracking toward an approximately 2.2 Bcf/d target for the fourth quarter of 2026.
• The Company expects more meaningful margin contributions from system optimization in 2027 as Lone Star NGL contracts expire.
• Incremental takeaway capacity of more than 13 Bcf/d is expected to come online between 2028 and 2030.

Business Segments and Product Lines:

• Midstream Logistics Adjusted EBITDA was $203.6 million for the three months ended September 30, 2026, a 34% increase year-over-year; for the nine months ended September 30, 2026, it was $587.3 million.
• Pipeline Transportation Adjusted EBITDA was $78.5 million for the three months ended September 30, 2026, an 18% decrease year-over-year, primarily due to the EPIC Crude Holdings, LP divestiture, higher fuel costs at Permian Highway Pipeline, and lower throughput volumes at Shin Oak; for the nine months ended September 30, 2026, it was $239.5 million.
• Corporate and Other Adjusted EBITDA was $(3.9) million for the three months ended September 30, 2026, and $(16.6) million for the nine months ended September 30, 2026.
• Processed gas volumes reached a record 1.94 Bcf/d in the third quarter of 2026.
• Kings Landing II processing capacity was upsized by more than 25% to 380 MMcf/d.
• Phase 1 of the ECCC Pipeline expansion reached final investment decision, expected to increase throughput capacity by roughly 50% to approximately 225 MMcf/d.
• New and amended gathering and processing agreements were executed in New Mexico and Texas, dedicating over 30,000 gross acres since August 2026.
• Long-lead residue compression equipment has been ordered for the next processing expansion beyond Kings Landing II.
• Expansion of front-end amine treating capacity and processing capability is underway at the Pecos Bend facility.
• Construction activities continue at Diamond Volt, the behind-the-meter power generation project at Diamond Cryo, expected to be in-service by mid-2027.
• The first of the Lone Star NGL contracts in Texas expired on October 31, 2026, with the remaining contract expiring at year-end.

Market and Competitive Landscape:

• Producer activity remains strong, with success delineating new benches in plays like the Woodford, Avalon, First Bone Spring, and Penn Shale.
• Demand for gathering, processing, and treating capacity is outpacing existing infrastructure in many areas.
• The Company believes the Permian Basin long-term outlook is strong due to expanding plays and increasing gas-to-oil ratios.
• Residue gas takeaway capacity is expected to be required to support long-term Permian production growth.

Risks and Challenges:

• The press release includes standard forward-looking statement risk factors regarding assumptions, uncertainties, and potential differences between actual results and expectations, referencing the Form 10-K for the year ended December 31, 2025.
• Specific risks mentioned include the timing and cost of capital projects, future operations, financial guidance, and industry takeaway capacity.

Management Commentary and Tone:

• CEO Jamie Welch stated the Company delivered another strong quarter with record processed gas volumes underscoring the strength and increasing scale of the business.
• Management expressed confidence that financial performance is increasingly driven by durable, repeatable earnings as strategic growth projects come online.
• Welch noted that margins and costs continue to outperform internal budget expectations.
• Management highlighted that producer activity remains strong and volumes are tracking toward fourth-quarter targets.

Other Key Points:

• The Company committed to additional transport capacity on a new long-haul residue gas pipeline connecting the Waha Hub to the Gulf Coast, expected to commence in 2029.
• The Company secured firm access to additional Gulf Coast residue gas pricing, commencing in 2027.
• One of the new gathering and processing agreements includes a firm, minimum volume commitment from the customer.
• The acid gas injection (AGI) and sour gas conversion project at Kings Landing is expected to be completed by year-end.
• The ECCC Pipeline expansion procurement and construction activities on the partial looping are anticipated to commence in early 2027, with in-service expected mid-2027.
• The Kings Landing II project capital cost remains unchanged at approximately $260 million, with an expected in-service date of mid-2028.
• The exact location for the next processing expansion beyond Kings Landing II (Texas or New Mexico) has not yet been finalized.