Kinetik Holdings Inc. · NYSE:KNTK
Kinetik — Q2 2023 Earnings Presentation
17 slides from Kinetik's earnings presentation, Aug 8, 2023
Slide 1: Second Quarter 2023 Results
Second Quarter 2023 Results August 7, 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 Continued focus on previously announced organic growth projects and financial priorities Financial update Maximizing Organic growth Sustainability focus shareholder value 2Q23 Net Income of $71.7mm Declared $0.75 per share Executed gas gathering and Reduced GHG emissions quarterly cash d
Slide 4: Segment performance supported by robust volume growth
Segment performance supported by robust volume growth Organic growth projects underway benefitting late 2023 and 2024 Midstream Logistics Pipeline Transportation Financial and activity results 2Q financial performance • 2Q23 Segment Adjusted EBITDA of $138mm(1) • 2Q23 Segment Adjusted EBITDA of $75m
Slide 5: Expect to achieve high end of 2023E Adjusted EBITDA Guidance
Expect to achieve high end of 2023E Adjusted EBITDA(1) Guidance Midstream Logistics volumes and new Pipeline Transportation projects drive 2H23 performance Key Drivers to 2023 Growth 2023E Adjusted EBITDA(1) ($mm) Midstream Logistics growth >$900 • March through August weighted development activity
Slide 6: 2023E Capital Expenditures Guidance
2023E Capital Expenditures Guidance Expect to be at top end of Guidance range due to incremental expenditures associated with PHP 2023E Capital Expenditures(1) ($mm) $255 to $275 $490 to $540 Guidance Key Drivers • High-pressure gathering projects: New Mexico expansion and remaining spend on 2022 co
Slide 7: Active risk management hedging program de-risks 2023
Active risk management hedging program de-risks 2023 Remaining 2023E unhedged commodity-linked Gross Profit further reduced to 5% 2023E Gross Profit Sources(1) 2023E Gross Profit Commodity Price Sensitivity(1)(2) +/- 25% Change in Commodity Prices Hedged Commodity 5% Exposure Unhedged Fixed Fee 5% C
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 commercial success and expanded customer count 3.5x leverage(2) / Investment Grade
Slide 9: 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% 9% 8% Large Cap Peer G&P Peer Kinetik 8% 8% 8% 7% 6% Peer Median: 6% 6% 5% 5% 4% 2% Peer A Peer B KNTK Peer C Peer D Peer E Peer F Peer G Peer H Peer I
Slide 10: 2022 Sustainability Report: Delivering Today. Accountable for Tomorrow.
2022 Sustainability Report: Delivering Today. Accountable for Tomorrow. Advancing a safer, cleaner and more reliable energy future ®
Slide 11: 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
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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 Six Months Ended June 30, June 30, 2023 2022(1) 2023 2022(1) Net Income Including Non-controlling Interests to (In thousands) Adjusted EBITDA Net income including noncontrolling interest $ 71,668 $ 131,448 $ 75,967 $ 152,837 Add back: Interest expe
Slide 15: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Six Months Ended June 30, 2023 2022(1) Reconciliation of net cash provided by operating activities (In thousands) to Adjusted EBITDA Net cash provided by operating activities $ 231,047 $ 268,918 Net changes in operating assets and liabilities 47,040 14,498 Interest e
Slide 16: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Three Months Ended Six Months Ended June 30, June 30, 2023 2022(1) 2023 2022(1) Distributable Cash Flow (2) (In thousands) Adjusted EBITDA (non-GAAP) $ 207,985 $ 207,918 $ 395,493 $ 348,709 Proportionate EMI EBITDA (74,481) (71,340) (146,348) (112,081) Cash distribut
Slide 17: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation June 30, 2023 March 31, 2023 Net Debt(1) (In thousands) Current portion of long-term debt, net $ — $ — Long-term debt, net 3,625,799 3,511,648 Plus: Debt issuance costs, net 24,201 25,352 Total long-term debt 3,650,000 3,537,000 Less: Cash and cash equivalents 2,237