- Generated fourth quarter 2023 net income of $267.4 million and
Adjusted EBITDA1 of $228.0 million
- Reported full year 2023 net income of $386.5 million, Adjusted
EBITDA1 of $838.8 million, and Capital Expenditures2 and
investments of $531.2 million
- Issuing full year 2024 Adjusted EBITDA1 guidance of $905
million to $960 million and $125 million to $165 million of 2024
Capital Expenditures2 guidance (“2024 Guidance”)
- Completing the core shareholder dividend reinvestment
obligation with the upcoming dividend to be paid on March 7th,
2024; and going forward, all shareholders will now be eligible to
receive 100% cash dividends
- Placed Delaware Link and the Permian Highway Pipeline
(“PHP”) expansion in-service in the fourth quarter
- Completed construction and placed in-service the gathering
expansion into Lea County, New Mexico in January 2024, marking the
third and final in-service of the 2023 strategic growth
projects
Kinetik Holdings Inc. (NYSE: KNTK) (“Kinetik” or the
“Company”) today reported financial results for the quarter
and year ended December 31, 2023.
2023 Results and
Commentary
For the three and twelve months ended December 31, 2023, Kinetik
processed natural gas volumes of 1.54 Bcf/d and 1.45 Bcf/d,
respectively, and reported net income including non-controlling
interest of $267.4 million and $386.5 million, respectively.
Kinetik generated Adjusted EBITDA1 of $228.0 million and $838.8
million for the three and twelve months ended December 31, 2023,
respectively, Distributable Cash Flow1 of $149.7 million and $568.5
million for the three and twelve months ended December 31, 2023,
respectively, and Free Cash Flow1 of $76.9 million and $59.9
million for the three and twelve months ended December 31, 2023,
respectively.
“2023 was a critical year for Kinetik as we executed upon highly
strategic organic growth projects, key to our long-term vision,”
said Jamie Welch, President and Chief Executive Officer. “We
reported record volume growth each successive quarter, and
exit-to-exit processed gas volumes grew by 22%. Our initiatives
throughout 2023 have positioned us well for future growth with
existing customers and market share capture in the Northern
Delaware Basin. We have meaningfully increased our gas treating
capabilities at our processing complexes and placed into service
Delaware Link, the PHP expansion, and the gathering system
expansion into Lea County, New Mexico. Today, we stand
competitively advantaged with available processing capacity and a
fully integrated ‘wellhead to Gulf Coast market’ natural gas
transportation solution.”
“We reported full year 2023 Adjusted EBITDA1 of $838.8 million,
at the middle of the revised guidance we provided in November and
above the midpoint of the original guidance range issued in
February 2023. Capital Expenditures2 in 2023 were $531.2 million,
within our guidance range. Our operations team did a fantastic job
with operated capital spend coming in 5% below internal estimates
for full year 2023, which helped offset a portion of the
non-operated PHP expansion cost increases. With the completion of
our 2023 growth projects, our capital program and Free Cash Flow1
outlook look markedly different, representing an approximately $450
million increase in Free Cash Flow1 year-on-year.”
2024 Guidance and
Outlook
Kinetik estimates full year 2024 Adjusted EBITDA1 between $905
million and $960 million. The midpoint of the 2024 Guidance implies
Adjusted EBITDA1 growth of over 11% year-over-year.
Guidance assumptions include:
- Low-double digit growth of gas processed volumes;
- Over 90% of gross profit from fixed-fee contracts;
- 2024 average annual commodity prices of approximately $76 per
barrel for WTI, $2 per MMBtu for Houston Ship Channel natural gas,
and $0.60 per gallon for natural gas liquids; and
- Unhedged commodity-linked gross profit representing
approximately 5% of total gross profit
The Company estimates 2024 Capital Expenditures2 to be between
$125 million and $165 million. This includes approximately $35
million of maintenance capital which is elevated for this year.
Welch added, “2024 will be an important year along the journey
to achieve our financial targets. We have strengthened the
composition of our cash flows with increased contributions from our
Pipeline Transportation segment and MVC fee-based revenue. The
Pipeline Transportation segment is expected to contribute 40% of
total 2024 Adjusted EBITDA1, a nearly 15% increase in two years.
Our 2024 Capital Expenditures2 guidance is below our previously
communicated expectations as we focus on a reduced capital program
given the completion of last year’s growth projects. We expect a
significant increase in Free Cash Flow1 this year, despite the
dividend being paid in cash to all shareholders.”
Financial
- Achieved quarterly net income of $267.4 million and Adjusted
EBITDA1 of $228.0 million.
- Achieved 2023 annual net income of $386.5 million and Adjusted
EBITDA1 of $838.8 million.
- Reported full year 2023 Capital Expenditures2 of $531.2
million, within the Company’s guidance range provided in February,
and for the fourth quarter 2023 reported Capital Expenditures2 of
$95.0 million.
- Declared a dividend of $0.75 per share for the quarter ended
December 31, 2023, or $3.00 per share on an annualized basis. 98.9
million shares have elected to reinvest fourth quarter dividends
into newly issued shares of Class A common stock. As a result,
$39.2 million of fourth quarter dividends will be paid in
cash.3
- Following the payment on March 7, 2024, all shareholders will
be eligible to receive 100% cash dividend payments.
- Exited the fourth quarter with a Leverage Ratio1,4 per the
Company’s Revolving Credit Agreement of 4.0x and a Net Debt to
Adjusted EBITDA Ratio1,5 of 4.3x.
- Realized over $50 million of Adjusted EBITDA1 synergies in
2023, exceeding the original merger target.
- Issued $800 million of 6.625% sustainability-linked senior
notes. The net proceeds repaid a portion of the outstanding
borrowings under Kinetik’s existing Term Loan Credit Facility and
extended the maturity of that facility to June 2026.
- Closed upsized secondary offering of 7.5 million shares by APA
Corporation, increasing public float by 47%.
Selected Key 2023
Metrics:
Three Months Ended
Twelve Months Ended December
31,
2023
2023
(In thousands, except
ratios)
Net income including non-controlling
interest6
$
267,354
$
386,452
Adjusted EBITDA1
$
228,005
$
838,830
Distributed Cash Flow1
$
149,713
$
568,507
Dividend Coverage Ratio1,7
1.3x
1.3x
Free Cash Flow1
$
76,917
$
59,931
Leverage Ratio1,4
4.0x
Net Debt to Adjusted EBITDA Ratio1,5
4.3x
Common stock issued and outstanding8
151,185,576
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
(In thousands)
Net Debt1,9
$ 3,589,490
$ 3,629,932
$ 3,647,763
$ 3,535,016
Growth Projects
- Completed and placed in service Kinetik’s gathering system
expansion into Lea County, New Mexico on January 18, 2024, ahead of
schedule by over two months and under budget.
- Placed in service the PHP expansion on December 1, 2023,
expanding PHP’s capacity by 550 MMcf/d and increasing natural gas
deliveries from the Permian to the U.S. Gulf Coast. Kinetik’s PHP
ownership is now over 55%.
- Placed in service on October 1, 2023, Delaware Link, Kinetik’s
wholly owned and operated 30 inch intrabasin residue gas pipeline
to Waha with an initial throughput capacity of 1 Bcf/d.
- Installation of front-end amine treating at Pecos Bend should
be placed in-service by April 2024, completing Kinetik’s system
wide treating project.
Governance and
Sustainability
- Michael Kumar was appointed to the Board of Directors,
replacing Ron Schweizer. Mr. Kumar currently serves as a Senior
Policy Advisor for I Squared Capital.
- The Company’s 2023 compensation program tied 20% of all
salaried employees’ at-risk pay, including executives, to specific
sustainability and safety related goals. The Company plans for a
similar approach in 2024.
- Kinetik expects to publish its 2023 Sustainability Report
mid-year, providing further details on its sustainability strategy,
targets, and results.
- Granted 2023 performance bonuses in Kinetik Class A Common
Stock rather than cash which reinforces alignment with our
shareholders.
Upcoming Tour Dates
Kinetik plans to participate at the following upcoming
conferences and events:
- Morgan Stanley Energy & Power Conference in New York City
on March 7th
- Barclays Midstream Corporate Access Day Luncheon in New York
City on March 7th
- Goldman Sachs Non-Deal Roadshow in Boston on March 12th
- Wolfe Houston Bus Tour on March 19th
- Bank of America Spring Energy Summit in Houston on March
26th
Investor Presentation
An updated investor presentation will be available under Events
and Presentations in the Investors section of the Company’s website
at www.kinetik.com.
Conference Call and
Webcast
Kinetik will host its fourth quarter 2023 results conference
call on Thursday, February 29, 2024 at 8:00 am Central Standard
Time (9:00 am Eastern Standard Time) to discuss fourth quarter
results. To access a live webcast of the conference call, please
visit the Investor Relations section of Kinetik’s website at
www.ir.kinetik.com. A replay of the conference call also will be
available on the website following the call.
About Kinetik Holdings
Inc.
Kinetik is a fully integrated, pure-play, Permian-to-Gulf Coast
midstream C-corporation operating in the Delaware Basin. Kinetik is
headquartered in Midland, Texas and has a significant presence in
Houston, Texas. Kinetik provides comprehensive gathering,
transportation, compression, processing and treating services for
companies that produce natural gas, natural gas liquids, crude oil
and water. Kinetik posts announcements, operational updates,
investor information and press releases on its website,
www.kinetik.com.
Forward-looking
statements
This news release includes certain statements that may
constitute “forward-looking statements” for purposes of the federal
securities laws. Forward-looking statements include, but are not
limited to, statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”
“may,” “might,” “plan,” “seeks,” “possible,” “potential,”
“predict,” “project,” “prospects,” “guidance,” “outlook,” “should,”
“would,” “will,” and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. These statements
include, but are not limited to, statements about the Company’s
future business strategy and other plans, expectations, and
objectives for the Company’s operations, including statements about
strategy, synergies, sustainability goals and initiatives,
portfolio monetization opportunities, expansion projects and future
operations, and financial guidance; the Company’s share repurchase
program and the projected timing, purchase price and number of
shares purchased under such program, if at all; projected dividend
amounts and the timing thereof and the Company’s leverage and
financial profile. While forward-looking statements are based on
assumptions and analyses made by us that we believe to be
reasonable under the circumstances, whether actual results and
developments will meet our expectations and predictions depend on a
number of risks and uncertainties which could cause our actual
results, performance, and financial condition to differ materially
from our expectations. See Part I, Item 1A. Risk Factors in our
Annual Report on Form 10-K for the year ended December 31, 2023 to
be filed with the SEC. Any forward-looking statement made by us in
this news release speaks only as of the date on which it is made.
Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict
all of them. We undertake no obligation to publicly update any
forward-looking statement whether as a result of new information,
future development, or otherwise, except as may be required by
law.
Additional information
Additional information follows, including a reconciliation of
Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, and Net
Debt (non-GAAP financial measures) to the GAAP measures.
Non-GAAP financial
measures
Kinetik’s financial information includes information prepared in
conformity with generally accepted accounting principles (GAAP) as
well as non-GAAP financial information. It is management’s intent
to provide non-GAAP financial information to enhance understanding
of our consolidated financial information as prepared in accordance
with GAAP. Adjusted EBITDA, Distributable Cash Flow, Free Cash
Flow, Dividend Coverage Ratio, Net Debt and Leverage Ratio are
non-GAAP measures. This non-GAAP information should be considered
by the reader in addition to, but not instead of, the financial
statements prepared in accordance with GAAP and reconciliations
from these results should be carefully evaluated. See
“Reconciliation of GAAP to Non-GAAP Measures” elsewhere in this
news release. This news release also includes certain
forward-looking non-GAAP financial information. Reconciliations of
these forward-looking non-GAAP measures to their most directly
comparable GAAP measure are not available without unreasonable
efforts. This is due to the inherent difficulty of forecasting the
timing or amount of various reconciling items that would impact the
most directly comparable forward-looking GAAP financial measure,
that have not yet occurred, are out of Kinetik’s control and/or
cannot be reasonably predicted. Accordingly, such reconciliation is
excluded from this new release. Forward-looking non-GAAP financial
measures provided without the most directly comparable GAAP
financial measures may vary materially from the corresponding GAAP
financial measures.
- A non-GAAP financial measure. See “Non-GAAP Financial Measures”
and “Reconciliation of GAAP to Non-GAAP Measures” for further
details.
- Net of contributions in aid of construction and returns of
invested capital from unconsolidated affiliates.
- Leverage Ratio is total debt less cash and cash equivalents
divided by last twelve months Adjusted EBITDA, calculated in the
Company’s credit agreement. The calculation includes Qualified
Project and Acquisition EBITDA Adjustments that pertain to the
funding of the Permian Highway Pipeline expansion project, Delaware
Link project, first quarter 2023 midstream infrastructure asset
acquisition, and other qualified projects at the Midstream
Logistics segment.
- Net Debt to Adjusted EBITDA Ratio is defined as Net Debt
divided by last twelve months Adjusted EBITDA.
- Dividends reinvested and dividends paid in cash as of February
27th, 2024. Final numbers are subject to change.
- Net income including noncontrolling interest for the three and
twelve months ended December 31, 2022 was $48.5 million and $250.7
million, respectively.
- Dividend Coverage Ratio is Distributable Cash Flow divided by
total declared dividends.
- Issued and outstanding shares of 151,185,576 is the sum of
57,096,538 shares of Class A common stock and 94,089,038 shares of
Class C common stock.
- Net Debt is defined as total long-term debt, excluding deferred
financing costs, premiums and discounts, less cash and cash
equivalents.
Notes Regarding Presentation of Financial
Information
The following addresses the results of our operations for the
three and twelve months ended December 31, 2023, as compared to our
results of operations for the same periods in 2022. As the business
combination between BCP Raptor Holdco, LP, Kinetik’s predecessor
for accounting purposes (“BCP”) and Altus Midstream LP
(“Altus”) (the “Transaction”) was determined to be a
reverse merger, BCP was considered the accounting acquirer and
Altus was considered the legal acquirer. Therefore, BCP’s net
assets, carrying at historical value, were presented as the
predecessor to the Company’s historical financial statements and
the comparable period presented herein reflects the results of
operations of BCP for the three and twelve months ended December
31, 2022 and Altus’ results of operations from February 22, 2022,
the closing date of the Transaction, through December 31, 2022.
Kinetik’s financial results on and after February 22, 2022 reflect
the results of the combined company.
Unless otherwise noted or the context requires otherwise,
references herein to Kinetik Holdings Inc. or “the Company” with
respect to time periods prior to February 22, 2022 include BCP and
its consolidated subsidiaries and do not include Altus and its
consolidated subsidiaries, while references herein to Kinetik
Holdings Inc. with respect to time periods from and after February
22, 2022 include Altus and its consolidated subsidiaries.
The Company completed a two-for-one Stock Split on June 8, 2022.
All corresponding per-share and share amounts for periods prior to
June 8, 2022 have been retroactively restated to reflect the
two-for-one Stock Split.
KINETIK HOLDINGS INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022(1)
(In thousands, except per
share data)
Operating revenues:
Service revenue
$
107,426
$
103,832
$
417,751
$
393,954
Product revenue
235,876
187,971
822,410
806,353
Other revenue
5,566
3,690
16,251
13,183
Total operating revenues
348,868
295,493
1,256,412
1,213,490
Operating costs and expenses:
Costs of sales (exclusive of depreciation
and amortization shown separately below)(2)
141,621
123,321
515,721
541,518
Operating expenses
42,716
36,293
161,520
137,289
Ad valorem taxes
6,668
1,034
21,622
16,970
General and administrative expenses
24,775
22,088
97,906
94,268
Depreciation and amortization
72,715
67,736
280,986
260,345
Loss on disposal of assets
4,236
9
19,402
12,611
Total operating costs and expenses
292,731
250,481
1,097,157
1,063,001
Operating income
56,137
45,012
159,255
150,489
Other income (expense):
Interest and other income
379
239
2,004
489
Gain on redemption of mandatorily
redeemable Preferred Units
—
—
—
9,580
Loss on debt extinguishment
(1,876
)
—
(1,876
)
(27,975
)
Gain on embedded derivative
—
—
—
89,050
Interest expense
(75,411
)
(56,667
)
(205,854
)
(149,252
)
Equity in earnings of unconsolidated
affiliates
53,187
60,250
200,015
180,956
Total other (expense) income, net
(23,721
)
3,822
(5,711
)
102,848
Income before income taxes
32,416
48,834
153,544
253,337
Income tax (benefit) expense
(234,938
)
372
(232,908
)
2,616
Net income including non-controlling
interest
267,354
48,462
386,452
250,721
Net income attributable to Preferred Unit
limited partners
—
—
—
115,203
Net Income attributable to common
shareholders
267,354
48,462
386,452
135,518
Net income attributable to Common Unit
limited partners
168,046
32,966
245,114
94,783
Net income attributable to Class A Common
Shareholders
$
99,308
$
15,496
$
141,338
$
40,735
Net income attributable to Class A Common
Shareholders, per share
Basic
$
1.70
$
0.26
$
2.39
$
1.48
Diluted
$
1.70
$
0.25
$
2.38
$
1.48
Weighted average shares(3)
Basic
55,738
44,403
51,791
41,326
Diluted
55,883
44,448
52,060
41,361
(1) The results of the legacy Altus
business are not included in the Company’s consolidated financials
prior to February 22, 2022. Refer to Note 1 – Description of
Business and Basis of Presentation in the Notes to the Consolidated
Financial Statements of the Company’s Form 10-K to be filed
subsequent to this earnings release for further information. (2)
Cost of sales (exclusive of depreciation and amortization) is net
of gas service revenues totaling $148.3 million and $70.4 million
for the years ended December 31, 2023 and 2022, respectively, for
certain volumes where we act as principal. (3) Share amounts have
been retrospectively restated to reflect the Company’s two-for-one
stock split, which was effected on June 8, 2022. Refer to Note 11 –
Equity and Warrants in the Notes to the Consolidated Financial
Statements of the Company’s Form 10-K to be filed subsequent to
this earnings release for further information.
KINETIK HOLDINGS INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022(1)
Net Income Including Non-controlling
Interests to Adjusted EBITDA
(In thousands)
Net income including non-controlling
interests (GAAP)
$
267,354
$
48,462
$
386,452
$
250,721
Add back:
Interest expense
75,411
56,667
205,854
149,252
Income tax (benefit) expense
(234,938
)
372
(232,908
)
2,616
Depreciation and amortization
72,715
67,736
280,986
260,345
Amortization of contract costs
1,655
463
6,620
1,807
Proportionate EBITDA from unconsolidated
affiliates
81,139
78,388
306,072
268,826
Share-based compensation
12,642
11,814
55,983
42,780
Loss on disposal of assets
4,236
9
19,402
12,611
Loss on debt extinguishment
1,876
—
1,876
27,975
Integration costs
30
2,197
1,015
12,208
Acquisition transaction costs
—
—
648
6,412
Other one-time cost or amortization
4,356
5,385
11,901
16,355
Deduct:
Interest and other income
363
—
677
—
Warrant valuation adjustment
14
133
88
133
Gain on redemption of mandatorily
redeemable Preferred Units
—
—
—
9,580
Unrealized gain on derivatives
4,907
—
4,291
—
Gain on embedded derivative
—
—
—
89,050
Equity income from unconsolidated
affiliates
53,187
60,250
200,015
180,956
Adjusted EBITDA(2) (non-GAAP)
$
228,005
$
211,110
$
838,830
$
772,189
Distributable Cash Flow (3)
Adjusted EBITDA (non-GAAP)
$
228,005
$
211,110
$
838,830
$
772,189
Proportionate EBITDA from unconsolidated
affiliates
(81,139
)
(78,388
)
(306,072
)
(268,826
)
Returns on invested capital from
unconsolidated affiliates
66,599
70,978
272,490
256,764
Interest expense
(75,411
)
(56,667
)
(205,854
)
(149,252
)
Unrealized (gain) loss on interest rate
derivatives
22,862
—
(4,619
)
—
Maintenance capital expenditures
(11,203
)
(4,806
)
(26,268
)
(12,298
)
Distributions paid to preferred unit
limited partners
—
—
—
(8,787
)
Distributable cash flow
(non-GAAP)
$
149,713
$
142,227
$
568,507
$
589,790
Free Cash Flow (4)
Distributable cash flow (non-GAAP)
$
149,713
$
142,227
$
568,507
$
589,790
Cash interest adjustment
10,726
12,989
2,773
28,982
Realized gain on interest rate
derivatives
4,736
—
11,818
—
Growth capital expenditures
(56,231
)
(42,409
)
(296,872
)
(207,927
)
Capitalized interest
(4,495
)
(1,485
)
(18,270
)
(2,755
)
Investments in unconsolidated
affiliates
(32,822
)
(21,041
)
(226,947
)
(76,770
)
Returns of invested capital from
unconsolidated affiliates
886
—
6,679
—
Contributions in aid of construction
4,404
1,455
12,243
15,799
Free cash flow (non-GAAP)
$
76,917
$
91,736
$
59,931
$
347,119
KINETIK HOLDINGS INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES (Continued)
Twelve Months Ended
December 31,
2023
2022(1)
(In thousands)
Reconciliation of net cash provided by
operating activities to Adjusted EBITDA
Net cash provided by operating
activities
$
584,480
$
613,006
Net changes in operating assets and
liabilities
4,057
(24,682
)
Interest expense
205,854
149,252
Amortization of deferred financing
costs
(6,194
)
(9,569
)
Contingent liabilities remeasurement
—
839
Current income tax expense
492
522
Returns on invested capital from
unconsolidated affiliates
(272,490
)
(256,764
)
Proportionate EBITDA from unconsolidated
affiliates
306,072
268,826
Derivative fair value adjustment and
settlement
7,963
(4,216
)
Interest income
(677
)
—
Unrealized gain on derivatives
(4,291
)
—
Integration costs
1,015
12,208
Transaction costs
648
6,412
Other one-time cost or amortization
11,901
16,355
Adjusted EBITDA(2) (non-GAAP)
$
838,830
$
772,189
Distributable Cash Flow(3)
Adjusted EBITDA (non-GAAP)
$
838,830
$
772,189
Proportionate EBITDA from unconsolidated
affiliates
(306,072
)
(268,826
)
Returns on invested capital from
unconsolidated affiliates
272,490
256,764
Interest expense
(205,854
)
(149,252
)
Unrealized gain on interest rate
derivatives
(4,619
)
—
Maintenance capital expenditures
(26,268
)
(12,298
)
Distributions paid to preferred unit
limited partners
—
(8,787
)
Distributable cash flow
(non-GAAP)
$
568,507
$
589,790
Free Cash Flow(4)
Distributable cash flow (non-GAAP)
$
568,507
$
589,790
Cash interest adjustment
2,773
28,982
Realized gain on interest rate
derivatives
11,818
—
Growth capital expenditures
(296,872
)
(207,927
)
Capitalized interest
(18,270
)
(2,755
)
Investments in unconsolidated
affiliates
(226,947
)
(76,770
)
Returns of invested capital from
unconsolidated affiliates
6,679
—
Contributions in aid of construction
12,243
15,799
Free cash flow (non-GAAP)
$
59,931
$
347,119
KINETIK HOLDINGS INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES (Continued)
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
Net Debt(5)
(In thousands)
Long-term debt, net
$
3,562,809
$
3,606,962
$
3,625,799
$
3,511,648
Plus: Deferred financing costs
31,510
23,038
24,201
25,352
Less: Unamortized premiums and discounts,
net
319
—
—
—
Total long-term debt
3,594,000
3,630,000
3,650,000
3,537,000
Less: Cash and cash equivalents
4,510
68
2,237
1,984
Net debt (non-GAAP)
$
3,589,490
$
3,629,932
$
3,647,763
$
3,535,016
(1) The results of the legacy Altus
business are not included in the Company’s consolidated financials
prior to February 22, 2022. (2) Adjusted EBITDA is defined as net
income including non-controlling interests adjusted for interest,
taxes, depreciation and amortization, impairment charges, asset
write-offs, the proportionate EBITDA from unconsolidated
affiliates, equity in earnings from unconsolidated affiliates,
share-based compensation expense, non-cash increases and decreases
related to trading and hedging agreements, 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. Adjusted EBITDA
should not be considered as an alternative to the GAAP measure of
net income including non-controlling interests or any other measure
of financial performance presented in accordance with GAAP. (3)
Distributable Cash Flow is defined as Adjusted EBITDA, adjusted for
the proportionate EBITDA from unconsolidated affiliates, returns on
invested capital from unconsolidated affiliates, interest expense,
net of amounts capitalized, unrealized gains or losses on interest
rate derivatives, distributions to preferred unitholders and
maintenance capital expenditures. Distributable Cash Flow should
not be considered as an alternative to the GAAP measure of net
income including non-controlling interests or any other measure of
financial performance presented in accordance with GAAP. We believe
that Distributable Cash Flow is a useful measure to compare cash
generation performance from period to period and to compare the
cash generation performance for specific periods to the amount of
cash dividends we make. (4) Free Cash Flow is defined as
Distributable Cash Flow adjusted for growth capital expenditures,
investments in unconsolidated affiliates, returns of invested
capital from unconsolidated affiliates, cash interest, capitalized
interest, realized gains or losses on interest rate derivatives and
contributions in aid of construction. Free Cash flow should not be
considered as an alternative to the GAAP measure of net income
including non-controlling interests or any other measure of
financial performance presented in accordance with GAAP. We believe
that Free Cash Flow is a useful performance measure to compare cash
generation performance from period to period and to compare the
cash generation performance for specific periods to the amount of
cash dividends that we make. (5) Net Debt is defined as total
long-term debt, excluding deferred financing costs, premiums and
discounts, less cash and cash equivalents. Net Debt illustrates our
total debt position less cash on hand that could be utilized to pay
down debt at the balance sheet date. Net Debt should not be
considered as an alternative to the GAAP measure of total long-term
debt, or any other measure of financial performance presented in
accordance with GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228510256/en/
Kinetik Investors: (713) 487-4832 Maddie Wagner (713) 574-4743
Alex Durkee Website: www.kinetik.com
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