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 prior year period; for the nine months ended September 30, 2026, net income was $168.9 million, up from $109.2 million in the prior year.
• Adjusted EBITDA was $278.1 million for the three months ended September 30, 2026, an increase from $242.6 million in the prior year period; for the nine months ended September 30, 2026, Adjusted EBITDA was $810.1 million, up from $735.6 million in the prior year.
• Distributable Cash Flow was $213.7 million for the three months ended September 30, 2026, compared to $158.5 million in the prior year period; for the nine months ended September 30, 2026, Distributable Cash Flow was $589.5 million, up from $468.8 million in the prior year.
• Free Cash Flow was $87.5 million for the three months ended September 30, 2026, compared to $13.9 million in the prior year period; for the nine months ended September 30, 2026, Free Cash Flow was $294.1 million, up from $132.3 million in the prior year.
• Net debt was $3,943.0 million as of September 30, 2026.
• Liquidity (cash and revolver availability) was $1,069.4 million 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.
• Total operating revenues were $569.4 million for the three months ended September 30, 2026, compared to $464.0 million in the prior year period; for the nine months ended September 30, 2026, total operating revenues were $1,560.8 million, up from $1,334.0 million in the prior year.
• Operating income was $63.7 million for the three months ended September 30, 2026, compared to $19.8 million in the prior year period; for the nine months ended September 30, 2026, operating income was $193.9 million, up from $116.5 million in the prior year.

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 approximate 2.2 Bcf/d target for the fourth quarter of 2026.
• More than 13 Bcf/d of incremental takeaway capacity is expected to come online between 2028 and 2030.
• First flow for new gathering and processing agreements is anticipated in the second and third quarters of 2027.
• The ECCC Pipeline expansion phase 1 is anticipated to be in-service mid-2027.
• The KLII processing capacity expansion is expected to be in-service mid-2028.
• The Diamond Volt power generation project is expected to be in-service by mid-2027.
• A new long-haul residue gas pipeline agreement is expected to commence in 2029.
• Additional Gulf Coast residue gas pricing access is expected to commence in 2027.
• Margin contributions from system optimization are forecasted to be more meaningful in 2027 as Lone Star NGL contracts expire.

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.
• 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.
• Corporate and Other Adjusted EBITDA was $(3.9) million for the three 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.
• The ECCC Pipeline expansion phase 1 is expected to increase throughput capacity by roughly 50% to approximately 225 MMcf/d.
• Over 30,000 gross acres were dedicated to Kinetik since the beginning of August 2026, with prospective acreage for the Woodford formation.
• Long-lead residue compression equipment has been ordered for the next processing expansion beyond Kings Landing II.
• Front-end amine treating and a 400 MMcf/d cryogenic unit are being procured for the next processing expansion.
• Construction activities on the acid gas injection and sour gas conversion project at Kings Landing progressed, with the AGI well reaching total depth.
• The acid gas injection and sour gas conversion project at Kings Landing is expected to be completed by year-end.
• The first of the Lone Star NGL contracts in Texas expired on October 31, 2026.
• The remaining Lone Star NGL contract in Texas will expire at year-end.

Market and Competitive Landscape

• Producer activity remains strong, with success in delineating new benches having higher gas-to-oil ratios 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 Delaware Basin is seeing expansion in plays like the Woodford, Avalon, First Bone Spring, and Penn Shale.
• The company believes incremental residue gas takeaway capacity will be required to support long-term Permian production growth.
• Waha price volatility is expected to be reduced with the addition of new takeaway capacity.

Risks and Challenges

• The press release includes standard forward-looking statement risk factors regarding actual results differing from expectations due to risks and uncertainties, including those detailed in 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, anticipated processed gas volumes, producer activity, 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.
• Welch noted that financial performance is increasingly driven by durable, repeatable earnings as strategic growth projects come online.
• Management expressed confidence that momentum built throughout the year has continued into the fourth quarter.
• Welch stated confidence in the long-term outlook for the Permian Basin has never been stronger.
• Management highlighted that margins and costs continue to outperform internal budget expectations.
• The tone is positive, emphasizing strong operating performance, robust producer activity, and strategic value of integrated systems.

Other Key Points

• The Company executed new and amended gathering and processing agreements in New Mexico and Texas.
• One of the new agreements includes a firm, minimum volume commitment from the customer.
• The Company committed to additional transport capacity on a new long-haul residue gas pipeline connecting the Waha Hub to the Gulf Coast.
• The Company secured firm access to additional Gulf Coast residue gas pricing.
• The KLII project capital cost remains unchanged at approximately $260 million despite the capacity increase.
• Right-of-way acquisition activities for the ECCC Pipeline expansion were underway during the third quarter of 2026.
• Pipeline procurement and construction activities on the partial looping of the ECCC Pipeline should commence in early 2027.
• The Company is procuring additional compression equipment to accommodate expected producer volume growth.
• Cost-effective plant modifications are being made to boost processing capacity and recoveries at East Toyah, Pecos, and Diamond Cryo processing complexes.
• Construction-related activities continued at Diamond Volt, the behind-the-meter power generation project at Diamond Cryo.
• The Company reached a final investment decision on phase 1 of the ECCC Pipeline expansion.
• The Company ordered long-lead equipment for its next processing expansion beyond Kings Landing II.
• The exact location for the next processing expansion (Texas or New Mexico) has not yet been finalized.
• The Company's common stock issued and outstanding was 162.4 million shares as of September 30, 2026.
• A conference call and webcast were scheduled for November 5, 2026.
• An updated investor presentation will be available on the Company's website.