Kinetik Holdings Inc. · NYSE:KNTK
Kinetik — Q1 2023 Earnings Presentation
18 slides from Kinetik's earnings presentation, May 4, 2023
Slide 1: First Quarter 2023 Results
First Quarter 2023 Results May 3, 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 Executing upon highly accretive growth opportunities, financial priorities and ESG goals Financial update Maximizing Organic and inorganic Sustainability focus shareholder value growth 1Q23 Net Income of $4mm Fixed interest rate for 92% of Delaware Link construction on- Reduced GHG emiss
Slide 4: Overall full quarter segment performance is solid
Overall full quarter segment performance is solid End of 1Q23 Midstream Logistics activity sets up for a strong 2023 outlook Midstream Logistics Pipeline Transportation Financial and activity results 1Q financial performance • 1Q23 Segment Adjusted EBITDA of $119mm(1) • 1Q23 Segment Adjusted EBITDA
Slide 5: Compelling processed gas volume growth
Compelling processed gas volume growth April 2023 processed gas volumes have increased >20% since October 2022 Processed gas volumes (Bcfpd) Revised Exit 2023 Guidance Rate: 1.6 Bcfpd ~1.52 (2) Bcfpd >20% Exit 2023 Guidance Rate: 1.5 Bcfpd 1Q23 Avg. Processed Gas Volumes: 1.35 Bcfpd ~1.25 Bcfpd
Slide 6: Expect to achieve high-end of 2023E Adjusted EBITDA Guidance
Expect to achieve high-end of 2023E Adjusted EBITDA(1) Guidance Continued momentum throughout 2023 driven by Midstream Logistics volumes Key Drivers to 2023 Growth 2023E Adjusted EBITDA(1) ($mm) >$900 Midstream Logistics growth $800 - 860 • March through August weighted development activity across c
Slide 7: 2023E Capital Expenditures Guidance
2023E Capital Expenditures Guidance Trending towards upper-end of Guidance principally due to accelerated producer activity 2023E Capital Expenditures Chart Title ($mm) (1) $255 to $275 $490 to $540 Guidance Key Drivers • One-time projects for New Mexico expansion and remaining spend for 2022 contra
Slide 8: Active risk management hedging program de-risks 2023
Active risk management hedging program de-risks 2023 Remaining 2023E unhedged commodity-linked Gross Profit now 6% versus 10% at 2023 Guidance issuance 2023E Gross Profit Sources(1) 2023E Gross Profit Commodity Price Sensitivity(1)(2) +/- 25% Change in Commodity Prices Hedged Commodity 4% Exposure U
Slide 9: Spreads and executed swaps result in attractive cost of debt capital
Spreads and executed swaps result in attractive cost of debt capital Floating interest rate exposure almost entirely fixed through May 2025 Fixed Interest Rate Exposure(1) Annual Interest Expense Sensitivity(1) +/- 1% in Secured Overnight Financing Rate 4% - 85% Fixed Fee Fixed 90% +/- $25mm 92% Fix
Slide 10: Accelerated path to achieving our financial priorities
Accelerated path to achieving our financial priorities Ultimate focus on free cash flow generation and accelerating shareholder returns Kinetik’s action plan 2023E Adjusted EBITDA(1) outperformance Small infrastructure acquisition 3.5x leverage target(2) Incentive agreement accelerates drilling acti
Slide 11: Our compelling value proposition
Our compelling value proposition Kinetik’s dividend yield and 2024E Adjusted EBITDA(1) growth rank highest among peers Current Dividend Yield(2) 10% 10% Large Cap Peer G&P Peer Kinetik 9% 8% 8% 8% 7% 7% Peer Median: 7% 6% 6% 5% 5% 3% KNTK Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H Peer
Slide 12: Kinetik at a glance
Kinetik at a glance ONE OF THE LARGEST MIDSTREAM OVER 30 MIDSTREAM LOGISTICS FOR 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 T
Slide 13: Appendix
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Slide 14: 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 15: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Three Months Ended March 31, 2023 2022(1) Net Income Including Non-controlling Interests to Adjusted EBITDA (In thousands) Net income including non-controlling interests (GAAP) $ 4,299 $ 21,389 Add back: Interest expense 69,308 26,645 Income tax expense 416 676 Depre
Slide 16: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Three Months Ended March 31, 2023 2022(1) Reconciliation of net cash provided by operating activities to Adjusted (In thousands) EBITDA Net cash provided by operating activities $ 119,591 $ 98,393 Net changes in operating assets and liabilities 8,743 937 Interest exp
Slide 17: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Three Months Ended March 31, 2023 2022(1) Distributable Cash Flow (2) (In thousands) Adjusted EBITDA (non-GAAP) $ 187,487 $ 140,791 Proportionate EMI EBITDA (71,867) (40,741) Cash distributions received from EMI’s (operating) 67,764 48,073 Interest expense (69,308) (
Slide 18: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation March 31, 2023 December 31, 2022 Net Debt(1) (In thousands) Current portion of long-term debt, net $ — $ — Long-term debt, net 3,511,648 3,368,510 Plus: Deferred financing costs 25,352 26,490 Total long-term debt 3,537,000 3,395,000 Less: Cash and cash equivalents 1,