Kinetik Holdings Inc. · NYSE:KNTK
Kinetik — Q3 2023 Earnings Presentation
17 slides from Kinetik's earnings presentation, Nov 9, 2023
Slide 1: Third Quarter 2023 Results
Third Quarter 2023 Results November 8, 2023
Slide 2: Forward looking statements
Forward looking statements This presentation 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 characterization
Slide 3: What is new
What is new Strong progress on organic growth projects and financial priorities Financial update Shareholder value Organic growth Sustainability focus 3Q23 Net Income of $43mm Declared $0.75 per share Delaware Link commercial in- MSCI rating upgraded to AA quarterly cash dividend (~8% service starte
Slide 4: Segment performance supported by robust volume growth
Segment performance supported by robust volume growth Organic growth projects benefit late 2023 and 2024 Midstream Logistics Pipeline Transportation Financial and activity results 3Q financial performance • 3Q23 Segment Adjusted EBITDA of $140mm(1) • 3Q23 Segment Adjusted EBITDA of $79mm(1) • Quarte
Slide 5: Updating 2023E Adjusted EBITDA Guidance
Updating 2023E Adjusted EBITDA(1) Guidance Volume and unit margin expansion driving earnings growth in Midstream Logistics and Pipeline Transportation Key Drivers 2023E Adjusted EBITDA(1) ($mm) Midstream Logistics volumes >$900 • March through August weighted development activity across customer bas
Slide 6: 2023E Capital Expenditures Guidance
2023E Capital Expenditures Guidance Expect to be at top end of Guidance range due to incremental expenditures associated with PHP 2023E Capital Expenditures(1) ($mm) $255 to $275 $490 to $540 Guidance Key Drivers • Tracking towards midpoint of Guidance range $450 • High-pressure gathering projects:
Slide 7: Active risk management hedging program
Active risk management hedging program Remaining 2023E unhedged commodity-linked Gross Profit reduced to ~3% 2023E Gross Profit Sources(1) 2023E Gross Profit Commodity Price Sensitivity(1)(2) +/- 25% Change in Commodity Prices 10% % of Remaining Unhedged 2023E Gross Profit Hedged 7% Commodity 6% Fix
Slide 8: Accelerated path to achieving our near-term financial priorities
Accelerated path to achieving our near-term financial priorities Ultimate focus on free cash flow generation and accelerating shareholder returns Kinetik’s action plan 2023E Adjusted EBITDA(1) outperformance Continued success and expanded customers 3.5x leverage(2) / Investment Grade Exploring optio
Slide 9: Our compelling value proposition
Our compelling value proposition Kinetik’s dividend yield and 2024E Adjusted EBITDA(1) growth rank as one of highest among peers Current Dividend Yield(2) 10% 9% Large Cap Peer G&P Peer Kinetik 8% 8% 8% 8% 7% 7% Peer Median: 7% 6% 5% 5% 4% 2% Peer A Peer B Peer C KNTK Peer D Peer E Peer F Peer G Pee
Slide 10: Kinetik at a glance
Kinetik at a glance ONE OF THE LARGEST MIDSTREAM OVER 35 COMPANIES IN THE DELAWARE BASIN CUSTOMERS Offices in Midland and Houston, TX INTERESTS IN 4.7 Bcfpd (2) OPERATES 4 MAJOR COMPLEXES EQUITY INTERESTS IN & OVER 1,800 MILES OF PIPELINE LONG-HAUL PIPELINES: OF RESIDUE GAS TAKEAWAY 55.5% OF PHP 550
Slide 11: For more information:
For more information: Leadership Board of Directors Sustainability
Slide 12: Energy for Change
gi S> OY Energy for Change
Slide 13: Glossary of terms
Glossary of terms • Adjusted EBITDA (EBITDA) is defined as net income including noncontrolling interests adjusted for interest, taxes, depreciation and amortization, impairment charges, asset write-offs, the proportionate EBITDA from our equity method investments, equity in earnings from investments
Slide 14: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022(1) Net Income Including Noncontrolling Interests to Adjusted EBITDA (In thousands) Net income including noncontrolling interest $ 43,131 $ 49,422 $ 119,098 $ 202,259 Add back: Intere
Slide 15: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Nine Months Ended September 30, 2023 2022(1) Reconciliation of net cash provided by operating activities to Adjusted EBITDA (In thousands) Net cash provided by operating activities $ 405,585 $ 453,244 Net changes in operating assets and liabilities 24,604 (12,810) In
Slide 16: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022(1) Distributable Cash Flow(2) (In thousands) Adjusted EBITDA (non-GAAP) $ 215,324 $ 212,370 $ 610,825 $ 561,079 Proportionate EMI EBITDA (78,585) (78,357) (224,933) (190,438) Cash di
Slide 17: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation September 30, June 30, March 31, 2023 2023 2023 (In thousands) Net Debt(5) Long-term debt, net $ 3,606,962 $ 3,625,799 $ 3,511,648 Plus: Debt issuance costs, net 23,038 24,201 25,352 Total long-term debt 3,630,000 3,650,000 3,537,000 Less: Cash and cash equivalents 6