Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 26, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38048 | |
Entity Registrant Name | KINETIK HOLDINGS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-4675947 | |
Entity Address, Address Line One | 2700 Post Oak Blvd | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77056 | |
City Area Code | 713 | |
Local Phone Number | 621-7330 | |
Title of 12(b) Security | Class A common stock, $0.0001 par value | |
Trading Symbol | KNTK | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001692787 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 59,715,285 | |
Class C Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 93,942,788 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Operating revenues: | |||
Total operating revenues | [1] | $ 341,394 | $ 281,040 |
Operating costs and expenses: | |||
Costs of sales (exclusive of depreciation and amortization) | [2],[3] | 153,687 | 115,877 |
Operating expenses | 43,406 | 35,973 | |
Ad valorem taxes | 6,292 | 5,458 | |
General and administrative expenses | 34,136 | 27,511 | |
Depreciation and amortization expenses | 73,606 | 68,854 | |
Loss on disposal of assets | 4,166 | 102 | |
Total operating costs and expenses | 315,293 | 253,775 | |
Operating income | 26,101 | 27,265 | |
Other income (expense): | |||
Interest and other income | 91 | 294 | |
Interest expense | (47,467) | (69,308) | |
Equity in earnings of unconsolidated affiliates | 60,469 | 46,464 | |
Total other income (expense), net | 13,093 | (22,550) | |
Income before income taxes | 39,194 | 4,715 | |
Income tax expense | 3,787 | 416 | |
Net income including noncontrolling interest | 35,407 | 4,299 | |
Net income attributable to Common Unit limited partners | 23,857 | 2,863 | |
Net income attributable to Class A Common Stock Shareholders | $ 11,550 | $ 1,436 | |
Net income attributable to Class A Common Shareholders, per share | |||
Basic (in USD per share) | $ 0.12 | $ (0.06) | |
Diluted (in USD per share) | $ 0.12 | $ (0.06) | |
Weighted-average shares | |||
Basic (in shares) | [4] | 57,869 | 47,612 |
Diluted (in shares) | [4] | 58,392 | 47,825 |
Service revenue | |||
Operating revenues: | |||
Total operating revenues | $ 102,195 | $ 103,425 | |
Product revenue | |||
Operating revenues: | |||
Total operating revenues | 236,567 | 173,824 | |
Other revenue | |||
Operating revenues: | |||
Total operating revenues | $ 2,632 | $ 3,791 | |
[1] Includes amounts associated with related parties of $17.2 million and $25.8 million for the three months ended March 31, 2024 and 2023, respectively. Cost of sales (exclusive of depreciation and amortization) is net of gas service revenues totaling $44.5 million and $30.5 million for the three months ended March 31, 2024 and 2023, respectively, for certain volumes where we act as principal. Weighted average Class A common shares have been retrospectively restated due to effect of Class A common shares issued under the Reinvestment Agreement for all periods presented in which the Class A common shares were outstanding. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Costs of sales (exclusive of depreciation and amortization) | [1],[2] | $ 153,687 | $ 115,877 |
Gas Service Revenues | |||
Costs of sales (exclusive of depreciation and amortization) | 44,500 | 30,500 | |
Related Party | |||
Revenue | 17,200 | 25,800 | |
Costs of sales (exclusive of depreciation and amortization) | $ 23,300 | $ 19,700 | |
[1] Cost of sales (exclusive of depreciation and amortization) is net of gas service revenues totaling $44.5 million and $30.5 million for the three months ended March 31, 2024 and 2023, respectively, for certain volumes where we act as principal. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 9,756 | $ 4,510 | |
Accounts receivable, net of allowance for credit losses of $1,000 in 2024 and 2023 | [1] | 209,878 | 215,721 |
Derivatives assets - current | 10,264 | 7,812 | |
Prepaid and other current assets | 27,391 | 29,256 | |
Current assets | 257,289 | 257,299 | |
NONCURRENT ASSETS: | |||
Property, plant and equipment, net | 2,747,483 | 2,743,227 | |
Intangible assets, net | 562,837 | 591,670 | |
Derivative asset, non-current | 134 | 165 | |
Deferred tax assets | 238,258 | 235,627 | |
Operating lease right-of-use assets | 27,015 | 37,569 | |
Deferred charges and other assets | 83,213 | 85,250 | |
Investments in unconsolidated affiliates | 2,526,278 | 2,540,989 | |
Goodwill | 5,077 | 5,077 | |
Noncurrent assets | 6,190,295 | 6,239,574 | |
Total assets | 6,447,584 | 6,496,873 | |
CURRENT LIABILITIES: | |||
Accounts payable | 16,467 | 34,000 | |
Accrued expenses | 170,075 | 177,421 | |
Derivative liabilities | 14,811 | 1,734 | |
Current portion of operating lease liabilities | 24,987 | 29,203 | |
Other current liabilities | 7,611 | 7,786 | |
Current liabilities | 233,951 | 250,144 | |
NONCURRENT LIABILITIES | |||
Long term debt, net | 3,517,115 | 3,562,809 | |
Contract liabilities | 24,837 | 25,761 | |
Operating lease liabilities | 3,014 | 9,349 | |
Derivatives liabilities - noncurrent | 418 | 5,363 | |
Other liabilities | 3,230 | 3,219 | |
Deferred tax liabilities | 13,785 | 13,244 | |
Noncurrent liabilities | 3,562,399 | 3,619,745 | |
Total liabilities | 3,796,350 | 3,869,889 | |
COMMITMENTS AND CONTINGENCIES (Note 15) | |||
Redeemable noncontrolling interest — Common Unit limited partners | 3,624,670 | 3,157,807 | |
EQUITY: | |||
Additional paid-in capital | 0 | 192,678 | |
Accumulated deficit | (973,451) | (723,516) | |
Total equity | (973,436) | (530,823) | |
Total liabilities, noncontrolling interest, and equity | 6,447,584 | 6,496,873 | |
Class A Common Stock | |||
EQUITY: | |||
Common stock | 6 | 6 | |
Class C Common Stock | |||
EQUITY: | |||
Common stock | $ 9 | $ 9 | |
[1] Includes amounts of $11.4 million and $15.8 million associated with related parties as of March 31, 2024 and December 31, 2023, respectively. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accounts receivable, allowance for credit losses | $ 1,000 | $ 1,000 |
Related Party | ||
Outstanding receivable | $ 11,400 | $ 15,800 |
Class A Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (in shares) | 59,712,487 | 57,096,538 |
Common stock, shares outstanding (in shares) | 59,712,487 | 57,096,538 |
Class C Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (in shares) | 93,942,788 | 94,089,038 |
Common stock, shares outstanding (in shares) | 93,942,788 | 94,089,038 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income including noncontrolling interests | $ 35,407 | $ 4,299 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 73,606 | 68,854 |
Amortization of deferred financing costs | 1,699 | 1,521 |
Amortization of contract costs | 1,655 | 1,655 |
Distributions from unconsolidated affiliates | 77,213 | 67,764 |
Derivatives settlement | 3,754 | 974 |
Derivative fair value adjustment | 1,957 | 11,770 |
Warrants fair value adjustment | 0 | (44) |
Loss on disposal of assets | 4,166 | 102 |
Equity in earnings from unconsolidated affiliates | (60,469) | (46,464) |
Share-based compensation | 22,561 | 17,540 |
Deferred income taxes | 3,660 | 363 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 5,843 | 5,008 |
Other assets | 1,865 | (2,206) |
Accounts payable | (20,982) | (3,175) |
Accrued liabilities | 1,756 | (10,679) |
Other non-current liabilities | 11 | 1,677 |
Operating leases | 3 | 632 |
Net cash provided by operating activities | 153,705 | 119,591 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Property, plant and equipment expenditures | (57,975) | (58,862) |
Intangible assets expenditures | (2,223) | (9,755) |
Investments in unconsolidated affiliates | (3,273) | (58,658) |
Distributions from unconsolidated affiliate | 1,240 | 5,793 |
Cash proceeds from disposals | 251 | 14 |
Net cash paid for acquisitions | 0 | (125,000) |
Net cash used in investing activities | (61,980) | (246,468) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on debt issuance cost | (11) | 0 |
Proceeds from revolver | 44,000 | 267,000 |
Payments on revolver | (91,000) | (125,000) |
Cash dividends paid to Class A Common Stock shareholders | (38,747) | (16,927) |
Distributions paid to Class C Common Unit limited partners | (721) | (174) |
Repurchase of Class A Common Stock | 0 | (2,432) |
Net cash (used in) provided by financing activities | (86,479) | 122,467 |
Net change in cash | 5,246 | (4,410) |
CASH, BEGINNING OF PERIOD | 4,510 | 6,394 |
CASH, END OF PERIOD | 9,756 | 1,984 |
SUPPLEMENTAL SCHEDULE OF INVESTING AND FINANCING ACTIVITIES | ||
Cash paid for interest, net of amounts capitalized | 57,095 | 36,745 |
Property and equipment and intangible accruals in accounts payable and accrued liabilities | 20,564 | 32,715 |
Class A Common Stock issued through dividend and distribution reinvestment plan | $ 74,247 | $ 87,658 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS - USD ($) $ in Thousands | Total | Apache limited partner | Class A Common Stock | Class C Common Stock | Common Stock Class A Common Stock | Common Stock Class C Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock |
Beginning balance at Dec. 31, 2022 | $ 3,112,409 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Redemption of Common Units | (5,634) | ||||||||
Net income | 2,863 | ||||||||
Change in redemption value of noncontrolling interests | (128,211) | ||||||||
Distribution paid to Common Unit limited partners | (70,566) | ||||||||
Ending balance at Mar. 31, 2023 | 2,910,861 | ||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 45,679,000 | 94,270,000 | |||||||
Beginning balance at Dec. 31, 2022 | $ (839,775) | $ 5 | $ 9 | $ 118,840 | $ (958,629) | $ 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Redemption of Common Units (in shares) | 181,000 | ||||||||
Redemption of Common Units | 5,634 | $ (181) | 5,634 | ||||||
Issuance of common stock through dividend and distribution reinvestment plan (in shares) | 3,071,000 | ||||||||
Issuance of common stock through dividend and distribution reinvestment plan | 87,658 | 87,658 | |||||||
Repurchase of Class A Common Stock (in shares) | (82,000) | ||||||||
Repurchase of Class A Common Stock | (2,432) | (2,432) | |||||||
Share-based compensation (in shares) | |||||||||
Share-based compensation | 17,540 | 17,540 | |||||||
Net income (in shares) | 205,000 | ||||||||
Net income | 1,436 | 1,436 | |||||||
Change in redemption value of noncontrolling interests | 128,211 | 128,211 | |||||||
Dividends, common stock, cash | (34,470) | (34,470) | |||||||
Ending balance (in shares) at Mar. 31, 2023 | 49,054,000 | 94,089,000 | |||||||
Ending balance at Mar. 31, 2023 | (636,198) | $ 5 | $ 9 | 229,672 | (863,452) | (2,432) | |||
Beginning balance at Dec. 31, 2023 | 3,157,807 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Redemption of Common Units | (5,060) | ||||||||
Net income | 23,857 | ||||||||
Change in redemption value of noncontrolling interests | 518,581 | ||||||||
Distribution paid to Common Unit limited partners | (70,515) | ||||||||
Ending balance at Mar. 31, 2024 | $ 3,624,670 | ||||||||
Beginning balance (in shares) at Dec. 31, 2023 | 57,096,538 | 94,089,038 | 57,097,000 | 94,089,000 | |||||
Beginning balance at Dec. 31, 2023 | (530,823) | $ 6 | $ 9 | 192,678 | (723,516) | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Redemption of Common Units (in shares) | 146,000 | 146,250 | |||||||
Redemption of Common Units | 5,060 | $ (146) | 5,060 | ||||||
Issuance of common stock through dividend and distribution reinvestment plan (in shares) | 2,179,000 | ||||||||
Issuance of common stock through dividend and distribution reinvestment plan | 74,247 | 74,247 | |||||||
Share-based compensation (in shares) | 290,000 | ||||||||
Share-based compensation | 22,561 | 22,561 | |||||||
Net income | 11,550 | 11,550 | |||||||
Change in redemption value of noncontrolling interests | (518,581) | (300,296) | (218,285) | ||||||
Recognition of deferred tax asset | 5,750 | 5,750 | |||||||
Dividends, common stock, cash | (43,200) | (43,200) | |||||||
Ending balance (in shares) at Mar. 31, 2024 | 59,712,487 | 93,942,788 | 59,712,000 | 93,943,000 | |||||
Ending balance at Mar. 31, 2024 | $ (973,436) | $ 6 | $ 9 | $ 0 | $ (973,451) | $ 0 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Class A Common Stock | ||
Cash dividends (in USD per share) | $ 0.75 | $ 0.75 |
DESCRIPTION OF THE ORGANIZATION
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization The Company is a holding company, whose only significant assets are ownership of the non-economic general partner interest and an approximate 39% limited partner interest in Kinetik Holdings LP, a Delaware limited partnership (the “Partnership”). As the owner of the non-economic general partner interest in the Partnership, the Company is responsible for all operational, management and administrative decisions related to, and consolidates the results of, the Partnership and its subsidiaries. The Company provides comprehensive gathering, produced water disposal, transportation, compression, processing and treating services necessary to bring natural gas, NGLs and crude oil to market. Additionally, the Company owns equity interests in four separate Permian Basin pipeline entities that have access to various markets along the U.S. Gulf Coast. Basis of Presentation The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. Certain reclassifications of prior year balances have been made to conform such amounts to the current year’s presentation. These reclassifications have no impact on net income. All adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year; accordingly, you should read these Condensed Consolidated Financial Statements in conjunction with our consolidated financial statements and related notes included in our 2023 Annual Report on Form 10-K. All intercompany balances and transactions have been eliminated in consolidation. Significant Accounting Policies The accounting policies that we follow are set forth in Note 2 – Summary of Significant Accounting Policies of the Notes to consolidated financial statements in our Annual Report on Form 10-K. There were no significant updates or revisions to our accounting policies during the three months ended March 31, 2024. Transactions with related parties The Company has revenue contracts and incurs cost of sales and operating expenses with Apache Midstream LLC (“Apache”), which owned more than 5% of the Company’s common stock prior to its secondary offerings completed in December 2023 and March 2024. Pursuant to FASB ASC 850, Related Party Transactions, Apache was no longer a related party after the completion of its secondary offering in December 2023 as its owned less than 10% of the Company’s common stock. Pursuant to Regulation S-K, Item 404(a), Apache ceased to be a related party as of March 18, 2024 as it no longer owned any of the Company’s common stock. In 2024, for the period ended March 18, 2024, revenue from Apache was $17.2 million, cost of sales was $9.4 million and operating expenses were $0.2 million. In 2023, for the three months ended March 31, 2023, revenue from Apache was $25.8 million, cost of sales was $17.8 million and operating expenses were $0.3 million. In addition, the Company incurs cost of sales with two of its equity method investment (“EMI”) pipeline entities, Permian Highway Pipeline LLC (“PHP”) and Breviloba, LLC (“Breviloba”). The Company pays a demand fee to PHP and pays a capacity fee to Breviloba for certain volumes moving on the Shin Oak NGL Pipeline (“Shin Oak”). For each of the three months ended March 31, 2024 and 2023, the Company recorded cost of sales of $13.9 million and $1.9 million, respectively, with these affiliates. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS As of March 31, 2024, our allocation of purchase price for acquisitions made during 2023 are detailed below: Acquisition Date Acquisition Considerations Transferred Current Assets Property Plant & Equipment Intangible Assets Other Long Term Assets Goodwill Liabilities Noncontrolling Interest (In thousands) (1) Q1 2023 Midstream Infrastructure Assets and Incentive and Acceleration Agreement (a) $ 125,000 $ 4,736 $ 61,850 $ 3,150 $ 55,264 $ — $ — $ — (a) Consideration includes $65 million paid for certain midstream assets and the $60 million paid related to the incentive and acceleration agreement. Midstream Infrastructure Assets In the first quarter of 2023, the Partnership closed on a purchase and sale agreement for certain midstream assets for $65.0 million together with a new 20-year midstream service agreement. Midstream assets acquired consisted of water gathering and disposal assets and intangible right-of-way assets. As the net book value of the acquired assets were approximate to their fair market value, consideration was allocated to property, plant and equipment and intangibles based on the ratio of historical long-lived assets and intangible assets acquired. In addition, the Partnership entered into an incentive and acceleration agreement related to near term supplemental development activities on acreage dedicated for midstream services to affiliates of the Partnership. Such development activities began in October 2023 and are subject to semi-annual performance milestones and subject to refund with consequential monetary penalty if not satisfied. Consideration for the incentive and acceleration agreement of $60.0 million was capitalized as a contract asset in accordance with ASC 606, of which $4.7 million was included in “Prepaid and Other Current Assets” and $55.3 million was included in “Deferred Charges and Other Assets” in the Condensed Consolidated Balance Sheet as of the date of acquisition. These transactions were accounted for as a business combination in accordance with ASC 805, and the measurement period ended on December 31, 2023. Acquisition-related costs were immaterial for this transaction. Acquired net assets from this business combination were included in the Midstream Logistic segment. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregation of Revenue The following table presents a disaggregation of the Company’s revenue: Three Months Ended March 31, 2024 2023 (In thousands) Gathering and processing services $ 102,195 $ 103,425 Natural gas, NGLs and condensate sales 236,567 173,824 Other revenue 2,632 3,791 Total revenues $ 341,394 $ 281,040 There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2024. The Company recognized revenues from MVC deficiency payments of nil and $1.1 million for the three months ended March 31, 2024 and 2023, respectively. Remaining Performance Obligations The following table presents our estimated revenue from contracts with customers for remaining performance obligations that have not yet been recognized, representing our contractually committed revenues as of March 31, 2024: Amount Fiscal Year (In thousands) Remaining of 2024 $ 44,181 2025 69,099 2026 64,789 2027 64,105 2028 63,012 Thereafter 203,692 $ 508,878 Our contractually committed revenue, for the purposes of the tabular presentation above, is limited to customer contracts that have fixed pricing and fixed volume terms and conditions, including contracts with payment obligations associated with MVCs. Contract Liabilities The following table provides information about contract liabilities from contracts with customers as of March 31, 2024: Amount (In thousands) Balance at December 31, 2023 $ 32,238 Reclassification of beginning contract liabilities to revenue as a result of performance obligations being satisfied (1,614) Cash received in advance and not recognized as revenue 514 Balance at March 31, 2024 31,138 Less: Current portion 6,301 Non-current portion $ 24,837 Contract liabilities relate to payments received in advance of satisfying performance obligations under a contract, which result from contribution in aid of construction payments. Current and noncurrent contract liabilities are included in “Other Current Liabilities” and “Contract Liabilities,” respectively, of the Condensed Consolidated Balance Sheets. Contract Cost Assets The Company has capitalized certain costs incurred to obtain a contract or additional contract dedicated acreage or volumes that would not have been incurred if the contract or associated acreage and volumes had not been obtained. As of March 31, 2024 and December 31, 2023, the Company had contract acquisition cost assets of $69.5 million and $71.2 million, respectively. Current and noncurrent contract cost assets are included in “Prepaid and Other Current Assets” and “Deferred Charges and Other Assets,” respectively, of the Condensed Consolidated Balance Sheets. The Company amortizes these assets as cost of sales on a straight-line basis over the life of the associated long-term customer contracts. The Company recognized cost of sales associated with these assets of $1.7 million and $1.7 million for the three months ended March 31, 2024 and 2023, respectively. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, at carrying value, is as follows: March 31, December 31, 2024 2023 (In thousands) Gathering, processing, and transmission systems and facilities $ 3,300,290 $ 3,253,539 Vehicles 12,642 11,447 Computers and equipment 7,324 6,242 Less: accumulated depreciation (666,838) (626,223) Total depreciable assets, net 2,653,418 2,645,005 Construction in progress 68,816 74,369 Land 25,249 23,853 Total property, plant, and equipment, net $ 2,747,483 $ 2,743,227 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | INTANGIBLE ASSETS, NET Intangible assets, net, are comprised of the following: March 31, December 31, 2024 2023 (In thousands) Customer contracts $ 1,139,633 $ 1,139,665 Right of way assets 143,653 141,711 Less accumulated amortization (720,449) (689,706) Total amortizable intangible assets, net $ 562,837 $ 591,670 The fair value of acquired customer contracts was capitalized as a result of acquiring favorable customer contracts as of the closing dates of certain past acquisitions and is being amortized using a straight-line method over the remaining term of the customer contracts, which ranged from one On March 31, 2024, the remaining weighted average amortization periods for customer contracts and right of way assets were approximately 6.81 years and 6.45 years, respectively. The overall remaining weighted average amortization period for the intangible assets as of March 31, 2024 was approximately 6.76 years. The Company recorded $30.7 million and $30.5 million of amortization expense for the three months ended March 31, 2024 and 2023, respectively. There was no impairment recognized on intangible assets for the three months ended March 31, 2024 or 2023. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS As of March 31, 2024, the Company owned investments in the following long-haul pipeline entities in the Permian Basin. These investments were accounted for using the equity method of accounting. For each EMI pipeline entity, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the EMI pipeline. The table below presents the ownership percentages and investment balances held by the Company for each entity: March 31, December 31, Ownership (1) 2024 2023 (In thousands) PHP 55.5% $ 1,654,920 $ 1,666,254 Breviloba 33.0% 440,869 443,684 Gulf Coast Express Pipeline LLC (“GCX”) 16.0% 430,489 431,051 $ 2,526,278 $ 2,540,989 (1) As of March 31, 2024 the Company also owned 15.0% of Epic Crude Holdings, LP (“EPIC”). The unamortized basis differences included in the EMI pipeline balances were $345.9 million and $349.3 million as of March 31, 2024 and December 31, 2023, respectively. These amounts represent differences in the Company’s contributions to date and the Company’s underlying equity in the separate net assets within the financial statements of the respective entities. Unamortized basis differences will be amortized into equity income over the useful lives of the underlying pipeline assets, which ranged from 20 years to 32 years as determined at the Closing of the ALTM business combination. There was capitalized interest of $24.5 million and $24.7 million as of March 31, 2024 and December 31, 2023, respectively. Capitalized interest is amortized on a straight-line basis into equity income. The following table presents the activity in the Company’s EMIs for the three months ended March 31, 2024: Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC Total (In thousands) Balance at December 31, 2023 $ 1,666,254 $ 443,684 $ 431,051 $ 2,540,989 Contributions 3,273 — — 3,273 Distributions (1) (58,375) (10,485) (9,593) (78,453) Equity income, net (2) 43,768 7,670 9,031 60,469 Balance at March 31, 2024 $ 1,654,920 $ 440,869 $ 430,489 $ 2,526,278 (1) Distributions consisted of distributions from returns on investment of $77.2 million, which was included in cash flows from operating activities and distributions from returns of investment of $1.2 million, which was included in cash flows from investing activities. (2) For the three months ended March 31, 2024, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $2.0 million from PHP, $0.2 million from Breviloba, LLC and $1.6 million from GCX. Summarized Financial Information The following table represents selected data for the Company’s EMI pipelines (on a 100 percent basis) for the three months ended March 31, 2024 and 2023. Three Months Ended March 31, 2024 2023 Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC (In thousands) Revenues $ 126,215 $ 50,958 $ 91,001 $ 92,840 $ 45,901 $ 89,748 Operating income 80,567 25,420 66,580 56,805 21,949 65,216 Net income 80,159 25,552 66,429 59,691 22,211 71,091 |
DEBT AND FINANCING COSTS
DEBT AND FINANCING COSTS | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
DEBT AND FINANCING COSTS | DEBT AND FINANCING COSTS The following table summarizes the Company’s debt obligations as of March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 (In thousands) Unsecured term loan $ 1,200,000 $ 1,200,000 $1.00 billion 2030 senior unsecured notes 1,000,000 1,000,000 $0.80 billion 2028 senior unsecured notes 800,000 800,000 $1.25 billion revolving line of credit 547,000 594,000 Total long-term debt 3,547,000 3,594,000 Debt issuance costs, net (1) (30,241) (31,510) Unamortized debt premiums and discounts, net 356 319 Total long-term debt, net $ 3,517,115 $ 3,562,809 (1) Excludes unamortized debt issuance cost related to the revolving line of credit. Unamortized debt issuance cost associated with the revolving line of credit was $5.0 million and $5.4 million as of March 31, 2024 and December 31, 2023, respectively. The current and non-current portion of the unamortized debt issuance costs related to the revolving credit facilities were included in the “Prepaid and other current assets” and the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets. The table below presents the components of the Company’s financing costs, net of capitalized interest: Three Months Ended 2024 2023 (In thousands) Capitalized interest $ (944) $ (2,233) Debt issuance costs 1,699 1,521 Interest expense 46,712 70,020 Total financing costs, net of capitalized interest $ 47,467 $ 69,308 As of March 31, 2024 and December 31, 2023, unamortized debt issuance costs associated with the 5.875% Sustainability-Linked Senior Notes due 2030 (the “2030 Notes”), the 6.625% Sustainability-Linked Senior Notes due 2028 (the “2028 Notes”) and the unsecured term loan were $30.2 million and $31.5 million, respectively, and unamortized debt premiums and discount, net, associated with the 2028 Notes and the unsecured term loan were $0.4 million and $0.3 million, respectively. Compliance with our Covenants Both the revolving credit agreement with Bank of America, N.A. as administrative agent, and the term loan credit agreement with PNC Bank as administrative agent (the “Term Loan Credit Facility”), contain customary covenants and restrictive provisions which may, among other things, limit the Partnership’s ability to create liens, incur additional indebtedness and make restricted payments and the Partnership’s ability to liquidate, dissolve, consolidate with or merge into or with any other person. The 2030 Notes and the 2028 Notes also contain covenants and restrictive provisions, which may, among other things, limit the Partnership’s and its subsidiaries’ ability to create liens to secure indebtedness. As of March 31, 2024, the Partnership was in compliance with all customary and financial covenants. Letters of Credit Our $1.25 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”) scheduled to mature on or before June 8, 2027 can be used for letters of credit. Our obligations with respect to related letters of credit totaled $12.6 million as of March 31, 2024 and December 31, 2023, respectively. Fair Value of Financial Instruments The fair value of the Company and its subsidiaries’ consolidated debt as of March 31, 2024 and December 31, 2023 was $3.53 billion and $3.57 billion, respectively. On March 31, 2024, the senior unsecured notes’ fair value was based on Level 1 inputs and the Term Loan and Revolving Credit Facility and revolving line of credit’s fair value was based on Level 3 inputs. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES The following table provides detail of the Company’s current accrued expenses on March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 (In thousands) Accrued product purchases $ 100,087 $ 109,172 Accrued taxes 6,528 632 Accrued salaries, vacation, and related benefits 3,848 1,872 Accrued capital expenditures 8,371 18,534 Accrued interest 35,746 33,760 Accrued other expenses 15,495 13,451 Total accrued expenses $ 170,075 $ 177,421 Accrued product purchases mainly accrue the liabilities related to producer payments and any additional business-related miscellaneous fees we owe to third parties, such as transport or capacity fees as of March 31, 2024. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
EQUITY | EQUITY Redeemable Noncontrolling Interest — Common Unit Limited Partners The redemption option of the Common Unit is not legally detachable or separately exercisable from the instrument and is non-transferable; the Common Unit is redeemable at the option of the holder. Therefore, the Common Unit is accounted for as redeemable noncontrolling interest and classified as temporary equity on the Company’s Condensed Consolidated Balance Sheets. During the three months ended March 31, 2024, 146,250 common units were redeemed on a one-for-one basis for shares of Class A Common Stock and a corresponding number of shares of Class C Common Stock were cancelled. There were 93.9 million Common Units and an equal number of Class C Common Stock issued and outstanding as of March 31, 2024. The Common Units fair value was approximately $3.62 billion as of March 31, 2024. Common Stock As of March 31, 2024, there were 59.7 million and 93.9 million shares, respectively, of Class A Common Stock and Class C Common Stock issued and outstanding (collectively, “Common Stock”). Share Repurchase Program During the quarter ended March 31, 2024, the Company did not repurchase any of its Class A Common Stock under the Repurchase Program. Dividend On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with certain stockholders including BCP Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC, APA Corporation, Apache, and certain individuals (each, a “Reinvestment Holder”). Under the Reinvestment Agreement, each Reinvestment Holder was obligated to reinvest a specified percent of distributions on Common Units or dividends on shares of Class A Common Stock in the Company’s Class A Common Stock. The Reinvestment Agreement terminated automatically on March 8, 2024. As described in these Condensed Consolidated Financial Statements, as the context requires, dividends paid to holders of Class A Common Stock and distributions paid to holders of Common Units may be referred to collectively as “dividends.” |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023: March 31, 2024 Level 1 Level 2 Level 3 Total (In thousands) Commodity swap $ — $ 1,716 $ — $ 1,716 Interest rate derivatives — 8,682 — 8,682 Total assets $ — $ 10,398 $ — $ 10,398 Commodity swaps $ — $ 14,889 $ — $ 14,889 Interest rate derivatives — 340 — 340 Total liabilities $ — $ 15,229 $ — $ 15,229 December 31, 2023 Level 1 Level 2 Level 3 Total (In thousands) Commodity swap $ — $ 3,663 $ — $ 3,663 Interest rate derivatives — 4,314 — 4,314 Total assets $ — $ 7,977 $ — $ 7,977 Commodity swaps $ — $ 1,749 $ — $ 1,749 Interest rate derivatives — 5,348 — 5,348 Total liabilities $ — $ 7,097 $ — $ 7,097 Our derivative contracts consist of interest rate swaps and commodity swaps or collars. Valuation of these derivative contracts involved both observable publicly quoted prices and certain credit valuation inputs that may not be readily observable in the marketplace. As such derivative contracts are classified as Level 2 in the hierarchy. Refer to Note 11—Derivatives and Hedging Activities in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further discussion related to commodity and interest rate derivatives. Long-term debt’s carrying value can vary from fair value. See Note 7—Debt and Financing Costs in the Notes to Condensed Financial Statements for further information. The carrying amounts reported on the Condensed Consolidated Balance Sheets for the Company’s remaining financial assets and liabilities approximate fair value due to their short-term nature. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three months ended March 31, 2024 and 2023. |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES The Company is exposed to certain risks arising from both its business operations and economic conditions, and it enters into certain derivative contracts to manage exposure to these risks. To minimize counterparty credit risk in derivative instruments, the Company enters into transactions with high credit-rating counterparties. The Company did not elect to apply hedge accounting to these derivative contracts and recorded the fair value of the derivatives on the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023. Interest Rate Risk The Company manages market risks, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and by using derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract. As of March 31, 2024, the Company had two interest rate swap contracts with total notional amounts of $1.70 billion maturing on May 31, 2025 that pay a fixed rate ranging from 4.38% to 4.48% for the respective notional amounts. The fair value or settlement value of the consolidated interest rate swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets. The following table presents the fair value of derivative assets and liabilities related to the interest rate swap contracts: March 31, December 31, 2024 2023 (In thousands) Derivatives assets - current $ 8,682 $ 4,314 Total derivative assets $ 8,682 $ 4,314 Derivatives liabilities - noncurrent $ 340 $ 5,348 Total derivative liabilities $ 340 $ 5,348 The Company recorded cash settlements and change in fair value of the interest rate swap contracts in “Interest expense” of the Condensed Consolidated Statements of Operations. The following table presents interest rate derivative activities for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 (In thousands) Cash settlements $ 3,952 $ — Favorable (unfavorable) fair value adjustment $ 13,329 $ (17,190) Commodity Price Risk The results of the Company’s operations may be affected by the market prices of oil, natural gas and NGLs. A portion of the Company’s revenue is directly tied to local natural gas, natural gas liquids and condensate prices in the Permian Basin and the U.S. Gulf Coast. Fluctuations in commodity prices also impact operating cost elements both directly and indirectly. Management regularly reviews the Company’s potential exposure to commodity price risk and manages exposure of such risk through commodity hedge contracts. During the past twelve months, the Company entered into multiple commodity swap and collar contracts based on the OPIS NGL Mont Belvieu prices for ethane, propane and butane, the Waha Basis index, the HSC index and the NYMEX West Texas Intermediate Control index. These contracts are on various notional quantities of NGLs, natural gas and crude. Similarly, the Company has entered into various natural gas and crude basis spread swaps. These contracts are effective over the next 1 to 26 months and are used to hedge against location price risk of the respective commodity resulting from supply and demand volatility and protect cash flows against price fluctuations. The following table presents detailed information of commodity swaps outstanding as of March 31, 2024 (in thousands, except volumes): March 31, 2024 Commodity Unit Volume Net Fair Value Natural Gas MMBtus 6,225,000 $ (4,224) NGL Gallons 191,058,000 (2,078) Crude Bbl 201,500 (1,023) Crude Collars Bbl 73,200 (376) Crude Basis Spread Swaps Bbl 95,600 (36) Natural Gas Basis Spread Swaps MMBtus 27,565,000 (5,436) $ (13,173) The fair value or settlement value of the swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets. The following table presents the fair value of derivative assets and liabilities related to commodity swaps: March 31, December 31, 2024 2023 (In thousands) Derivatives assets - current $ 1,582 $ 3,498 Derivative assets - noncurrent 134 165 Total derivative assets $ 1,716 $ 3,663 Derivative liabilities - current $ 14,811 $ 1,734 Derivatives liabilities - noncurrent 78 15 Total derivative liabilities $ 14,889 $ 1,749 The Company recorded cash settlements and fair value adjustments on commodity swap derivatives in “Product revenue” of the Consolidated Statements of Operations. The following table presents commodity derivative activities for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 (In thousands) Cash settlements $ (198) $ 974 (Unfavorable) favorable fair value adjustment $ (15,286) $ 5,420 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Company has granted various Class A and Class C Shares, restricted stock units (“RSUs”) and performance stock units (“PSUs”) to members of the Board of Directors ( the “Board”) and employees under the Kinetik Holdings Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”). Class A Shares and Class C Shares The Class A Shares and Class C Shares were granted at the Closing of the Altus Midstream Company (“ALTM”) business combination upon conversion of previously outstanding incentive units. These shares were held in escrow and will vest over three , C ompensation - Stock Compensation . Forfeitures are recognized as they occur. In addition, upon the Closing of the ALTM business combination, 395,416 performance Class A awards were granted that will vest over a four year service period and upon certain shareholder’s selling of the Company’s Class A Common Stock at defined return levels. As the performance outcome is not estimable, no compensation expense is recorded for these performance awards for the three months ended March 31, 2024 and 2023. The table below summarizes Class A Share and Class C Share activities for the three months ended March 31, 2024: Number of Shares Weighted Avg Grant-Date Fair Market Value Per Unit Outstanding and unvested shares at December 31, 2023 5,444,488 $ 28.91 Vested 16,404 31.18 Forfeited 796 31.18 Outstanding and unvested shares at March 31, 2024 5,427,288 $ 28.90 Table below summarizes aggregate intrinsic value (market value at vesting date) and grant-date fair value of vested Class A Shares for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 (In thousands) Aggregate intrinsic value of vested Class A Shares $ 654 $ — Grant-date fair value of vested Class A Shares $ 511 $ — No vesting or forfeiture occurred for Class C Shares for the three months ended March 31, 2024. No vesting or forfeiture occurred for Class A or Class C Shares for the three months ended March 31, 2023. As of March 31, 2024, there were $61.6 million of unrecognized compensation costs related to unvested Class A Shares and Class C Shares. These costs are expected to be recognized over a weighted average period of 1.55 years. Restricted Stock Units Certain RSUs were granted in the first quarter of 2024 to certain executives and employees under the 2019 Plan. Granted RSUs are subject to various service vesting requirements and may be settled only for shares of Class A Common Stock on a one-for-one basis contingent upon continued employment. RSUs are recorded at grant-date fair value and compensation expense is recognized on a straight‑line or graded straight-line basis over the vesting period within “General and Administrative Expenses.” The table below summarizes RSU activities for the three months ended March 31, 2024: Number of Shares (1) Weighted Avg Grant-Date Fair Market Value Per Unit (1) Outstanding and unvested shares at December 31, 2023 435,220 $ 31.15 Granted 585,340 35.17 Vested 290,708 34.24 Forfeited 4,039 32.44 Outstanding and unvested shares at March 31, 2024 725,813 $ 33.30 (1) Number of shares and weighted average fair market value per share here include RSUs issued to new employees that transitioned from ALTM as part of the merger as replacement awards. Table below summarizes aggregate intrinsic value (market value at vesting date) and grant-date fair value of RSUs for the three months ended March 31, 2024 and 2023. Three Months Ended March 31, 2024 2023 (In thousands) Aggregate intrinsic value of vested RSUs $ 10,148 $ 6,700 Grant-date fair value of vested RSUs $ 9,954 $ 6,188 As of March 31, 2024, there were $18.5 million of unrecognized compensation costs related to the RSUs. These costs are expected to be recognized over a weighted average period of 2.03 years. Performance Stock Units The Company granted PSUs pursuant to the 2019 Plan to certain of its employees and executives in the first quarter of 2024. These PSUs vest and become earned upon the achievement of certain performance goals based on the Company’s annualized absolute total stockholder return and the Company’s relative total stockholder return as compared to the performance peer group during the performance period, if the PSUs holders also satisfy the continued employment requirement during the performance period. Depending on the results achieved during the three-year performance period, the actual number of Class A Common Stock that a holder of the PSUs earns at the end of the performance period may range from 0% to 200% of the target number of PSUs granted. The fair value of the PSUs is determined using a Monte Carlo simulation at the grant date. The Company recognized compensation expense for PSUs on a straight-line basis over the performance period. Any PSU not earned at the end of the performance period will be forfeited. The table below summarizes PSU activities for the three months ended March 31, 2024: Number of Shares Weighted Avg Grant-Date Fair Market Value Per Unit Granted in 2024 198,703 $ 36.76 Outstanding and unvested shares at March 31, 2024 198,703 $ 36.76 No vesting or forfeiture occurred for PSUs for the three months ended March 31, 2024. The table below presents a summary of the grant-date fair value assumptions used to value the PSUs on grant date: March 2024 Grant-date fair value per unit $36.76 Beginning average price $32.84 Risk-free interest rate 4.21% Volatility factor 37% Expected term 2.82 years As of March 31, 2024, there were $7.1 million of unrecognized compensation costs related to the PSUs. These costs are expected to be recognized over a weighted average period of 2.75 years. With respect to above Class A Shares, Class C Shares, RSUs and PSUs, the Company recorded compensation expenses of $22.6 million and $17.5 million for the three months ended March 31, 2024 and 2023, respectively. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company is subject to U.S. federal income tax and state taxes. Income tax expense included in the condensed consolidated financial statements in this Quarterly Report on Form 10-Q is as follows: Three Months Ended 2024 2023 (In thousands) Income before income taxes $ 39,194 $ 4,715 Income tax expense $ 3,787 $ 416 Effective tax rate 9.66 % 8.82 % The effective tax rate for the three months ended March 31, 2024 was lower than the statutory rate mainly due to the impact of tax attributable to noncontrolling interests related to the Common Unit limited partners. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The computation of basic and diluted net income per share for the periods presented in the condensed consolidated financial statements is shown in the tables below: Three Months Ended 2024 2023 (In thousands, except per share amounts) Net income attributable to Class A common shareholders $ 11,550 $ 1,436 Less: Net income available to participating unvested restricted Class A common shareholders (1) (4,394) (4,156) Total net income attributable to Class A common shareholders $ 7,156 $ (2,720) Weighted average shares outstanding - basic (2) 57,869 47,612 Dilutive effect of unvested Class A common shares (3) 523 213 Weighted average shares outstanding - diluted (2)(4) 58,392 47,825 Net income available per common share - basic $ 0.12 $ (0.06) Net income available per common share - diluted $ 0.12 $ (0.06) (1) Represents dividends paid to unvested Class A Shares. (2) Weighted average Class A common shares have been retrospectively restated due to bonus effect of Class A common shares issued under the Reinvestment Agreement for all periods presented in which the Class A common shares were outstanding. (3) Includes dilutive effect from both RSUs and PSUs on unvested Class A common shares. (4) The effect of an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for all periods presented in which the Common Units were outstanding. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Accruals for loss contingencies arising from claims, assessments, litigation, environmental and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. As of March 31, 2024 and December 31, 2023, there were no accruals for loss contingencies. Litigation The Company is a party to various legal actions arising in the ordinary course of its business. In accordance with FASB ASC 450, Contingencies , the Company accrues reserves for outstanding lawsuits, claims and proceedings when a loss contingency is probable and can be reasonably estimated. The Company estimates the amount of loss contingencies using current available information from legal proceedings, advice from legal counsel and available insurance coverage. Due to the inherent subjectivity of the assessments and unpredictability of the outcomes of the legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company from the legal proceedings in question. There were no litigation related accrued reserves as of March 31, 2024 and December 31, 2023. The Company has entered into litigation with a third party to collect receivables totaling $11.6 million and is waiting on settlement of $8.0 million in receivables from another counterparty related to prior litigation the Company had previously entered into and subsequently dropped. These receivables remain outstanding from the Winter Storm Uri during February of 2021. Given the counterparties’ sufficient creditworthiness and the valid claims that we hold, no allowance has currently been established for these items as we have legally enforceable agreements with these parties. Environmental Matters The Company is subject to various local, state, and federal laws and regulations relating to various environmental matters during the ordinary course of business. Although we believe our operations are in substantial compliance with applicable environmental laws and relations, risks of additional costs and liabilities are inherent in our operations. Moreover, changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly requirements could require the Company to make significant expenditures to attain and maintain compliance or may otherwise have a material adverse effect on its operations, competitive position, or financial condition. The Company is not aware of any environmental claims existing as of March 31, 2024, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. Contingent Liabilities Permian Gas Acquisition |
SEGMENTS
SEGMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS Our two operating segments represent the Company’s segments for which discrete financial information is available and is utilized on a regular basis by our CODM to make key operating decisions, assess performance and allocate resources. These segments represent strategic business units with differing products and services. No operating segments have been aggregated to form the reportable segments. Therefore, our two operating segments represent our reportable segments. The activities of each of our reportable segments from which the Company earns revenues and incurs expenses are described below: • Midstream Logistics: The Midstream Logistics segment operates under three streams, 1) gas gathering and processing, 2) crude oil gathering, stabilization and storage services and 3) produced water gathering and disposal. • Pipeline Transportation: The Pipeline Transportation segment consists of equity investment interests in four Permian Basin pipelines that access various points along the U.S. Gulf Coast, as well as Kinetik NGL and Delaware Link Pipelines. The current operating pipelines transport crude oil, natural gas and NGLs. Our Chief Executive Officer, who is the CODM, uses Segment Adjusted EBITDA, a non-GAAP measure, to measure profitability and allocate resources among segments. Segment Adjusted EBITDA, a non-GAAP measure, is defined as segment net earnings adjusted to exclude interest expense, income tax expense, depreciation and amortization, the proportionate effect of these same items for our EMI pipelines and other non-recurring items. The CODM considers budget-to-actual and forecast-to-actual variances on a monthly basis when making decisions about allocating capital and personnel to the segments. The Midstream Logistics segment accounts for more than 99% of the Company’s operating revenues, cost of sales (excluding depreciation and amortization), and operating expenses and more than 93% of the ad valorem expenses. The Pipeline Transportation segment contains all of the Company’s equity method investments, which contribute approximate 92% of the segment’s Adjusted EBITDA. Corporate and Other contains the Company’s executive and administrative functions, including 86% of the Company’s General and Administrative Expenses and all of the Company’s debt service costs. The following tables present the reconciliation of the non-GAAP measure Segment Adjusted EBITDA to the GAAP measure segment income (loss) before income taxes as of and for the three months period ended March 31, 2024 and 2023: Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated (In thousands) For the Three Months Ended March 31, 2024 Segment income (loss) before income taxes $ 50,173 $ 65,298 $ (76,277) $ 39,194 Add back: Interest expense 16 — 47,451 47,467 Depreciation and amortization 71,310 2,290 6 73,606 Contract assets amortization 1,655 — — 1,655 Proportionate EMI EBITDA — 88,402 — 88,402 Share-based compensation — — 22,561 22,561 Loss on disposal of assets 4,166 — — 4,166 Commodity hedging unrealized loss 15,088 — — 15,088 Integration costs 41 — — 41 Other one-time costs or amortization 536 — 1,889 2,425 Deduct: Interest income — — 577 577 Equity income from unconsolidated affiliates — 60,469 — 60,469 Segment Adjusted EBITDA (2) $ 142,985 $ 95,521 $ (4,947) $ 233,559 Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated (In thousands) For the Three Months Ended March 31, 2023 Segment income (loss) before income taxes $ 51,012 $ 46,432 $ (92,729) $ 4,715 Add back: Interest expense 9 — 69,299 69,308 Depreciation and amortization 68,393 455 6 68,854 Contract assets amortization 1,655 — — 1,655 Commodity hedging unrealized gain (4,987) — — (4,987) Proportionate EMI EBITDA — 71,867 — 71,867 Share-based compensation — — 17,540 17,540 Loss on disposal of assets 102 — — 102 Integration costs 7 — 918 925 Acquisition transaction costs 33 — 235 268 Other one-time costs or amortization 3,025 — 723 3,748 Deduct: Warrant valuation adjustment — — 44 44 Equity income from unconsolidated affiliates — 46,464 — 46,464 Segment Adjusted EBITDA (2) $ 119,249 $ 72,290 $ (4,052) $ 187,487 (1) Corporate and Other represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain General and Administrative Expense items. Items included here to reconcile operating segments profit and loss with the Company’s consolidated profit and loss. (2) Segment adjusted EBITDA is a non-GAAP measure; please see Key Performance Metrics in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q, for a definition of segment adjusted EBITDA. The following tables present the revenue for the individual operating segments for the three month periods ended March 31, 2024 and 2023: Midstream Logistics Pipeline Transportation Elimination Consolidated (In thousands) For the Three Months Ended March 31, 2024 Revenue $ 336,688 $ 2,074 $ — $ 338,762 Other revenue 2,630 2 — 2,632 Intersegment revenue (1) — 6,215 (6,215) — Total segment operating revenue $ 339,318 $ 8,291 $ (6,215) $ 341,394 Midstream Logistics Pipeline Transportation Consolidated (In thousands) For the Three Months Ended March 31, 2023 Revenue $ 276,555 $ 694 $ 277,249 Other revenue 3,789 2 3,791 Total segment operating revenue $ 280,344 $ 696 $ 281,040 (1) The Company accounts for intersegment sales at market prices, while it accounts for asset transfers at book value. Intersegment revenue is eliminated at consolidation. The following table presents total assets for each operating segment as of March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 (In thousands) Midstream Logistics $ 3,734,578 $ 3,772,764 Pipeline Transportation (1) 2,686,670 2,703,588 Segment total assets 6,421,248 6,476,352 Corporate and other 26,336 20,521 Total assets $ 6,447,584 $ 6,496,873 (1) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On May 9, 2024, the Company entered into a Membership Interest Purchase Agreement (the “Durango MIPA”) with Durango Midstream LLC, an affiliate of Morgan Stanley Energy Partners (the “Durango Seller”), and the Partnership, pursuant to which the Partnership has agreed to purchase all of the membership interests of Durango Permian, LLC (“Durango”) from Durango Seller for an aggregate purchase price of approximately $765.0 million (the “Durango Acquisition”), consisting of $315.0 million of cash to be paid at closing, approximately 3.8 million common units in the Partnership and an equivalent number of shares of Class C Common Stock to be issued at closing and approximately 7.7 million common units in the Partnership and an equivalent number of shares of Class C Common Stock to be issued on July 1, 2025. Durango Seller is also entitled to a $75.0 million earn out in cash contingent upon the Kings Landing gas processing complex in Eddy County, New Mexico (the “Kings Landing Project”), which is currently under construction, being placed into service (the “Kings Landing Earnout”). The Kings Landing Earnout is subject to certain adjustments for capital costs associated with the Kings Landing Project. The Durango Acquisition is expected to close in the second quarter of 2024, subject to satisfaction of customary closing conditions, including regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”). Also on May 9, 2024, the Company entered into a Purchase and Sale Agreement (the “GCX Purchase Agreement”) with GCX Pipeline, LLC, an affiliate of ArcLight Capital Partners, LLC (the “GCX Buyer”), pursuant to which the Company has agreed to sell its 16% membership interest in GCX to the GCX Buyer for a total purchase price of $540.0 million, consisting of $510.0 million of cash (subject to customary adjustments) and an additional $30.0 million earn out in cash upon final investment decision on a capacity expansion project. The transactions pursuant to the GCX Purchase Agreement are expected to close in the second quarter of 2024, subject to customary closing conditions. On April 18, 2024, the Board declared a cash dividend of $0.75 per share on the Company’s Class A Common Stock which will be payable to stockholders of record as of April 29, 2024 on May 9, 2024. The Company, through its ownership of the general partner of the Partnership, declared a distribution of $0.75 per Common Unit from the Partnership to the holders of Common Units, which will be payable on May 9, 2024. On April 2, 2024, Kinetik Receivables LLC (“Kinetik Receivables”), a bankruptcy remote special purpose entity formed as a direct subsidiary of the Partnership, which is a subsidiary of the Company, entered into an accounts receivable securitization facility with an initial facility limit of $150.0 million (“A/R Facility”) which has a scheduled termination date of April 1, 2025 with renewal options. Pursuant to the terms of the A/R Facility, Kinetik Receivables acquires certain receivables from the Partnership and other subsidiaries of the Company and makes further sales of such receivables to certain purchasers. The net proceeds of the A/R Facility were used, together with cash on hand, to repay a portion of the outstanding borrowings under the existing Term Loan Credit Facility, lowering the remaining balance to $1.00 billion. As a result, the maturity of the Term Loan Credit Facility extended to December 8, 2026. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Segment adjusted EBITDA | $ 233,559 | $ 187,487 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
DESCRIPTION OF THE ORGANIZATI_2
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
Transactions with related parties | Transactions with related parties |
Business Combination | Consideration for the incentive and acceleration agreement of $60.0 million was capitalized as a contract asset in accordance with ASC 606, of which $4.7 million was included in “Prepaid and Other Current Assets” and $55.3 million was included in “Deferred Charges and Other Assets” in the Condensed Consolidated Balance Sheet as of the date of acquisition. |
Revenue Recognition | Current and noncurrent contract liabilities are included in “Other Current Liabilities” and “Contract Liabilities,” respectively, of the Condensed Consolidated Balance Sheets. Current and noncurrent contract cost assets are included in “Prepaid and Other Current Assets” and “Deferred Charges and Other Assets,” respectively, of the Condensed Consolidated Balance Sheets. The Company amortizes these assets as cost of sales on a straight-line basis over the life of the associated long-term customer contracts. |
Property, Plant and Equipment | The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated. |
Commitments and Contingencies | Accruals for loss contingencies arising from claims, assessments, litigation, environmental and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. The Company is a party to various legal actions arising in the ordinary course of its business. In accordance with FASB ASC 450, Contingencies |
Equity and Warrants | Therefore, the Common Unit is accounted for as redeemable noncontrolling interest and classified as temporary equity on the Company’s Condensed Consolidated Balance Sheets. |
Debt and Financing Cost | The current and non-current portion of the unamortized debt issuance costs related to the revolving credit facilities were included in the “Prepaid and other current assets” and the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets. |
Equity Method Interests | Unamortized basis differences will be amortized into equity income over the useful lives of the underlying pipeline assets, which ranged from 20 years to 32 years as determined at the Closing of the ALTM business combination. Capitalized interest is amortized on a straight-line basis into equity income. |
Fair Value Measurements | As such derivative contracts are classified as Level 2 in the hierarchy. |
Derivatives | The fair value or settlement value of the consolidated interest rate swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets.The Company recorded cash settlements and change in fair value of the interest rate swap contracts in “Interest expense” of the Condensed Consolidated Statements of Operations.The fair value or settlement value of the swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets.The Company recorded cash settlements and fair value adjustments on commodity swap derivatives in “Product revenue” of the Consolidated Statements of Operations. |
Share-Based Payment Compensation | These shares were held in escrow and will vest over three , C ompensation - Stock Compensation |
Compensation Related Costs, Sha
Compensation Related Costs, Share Based Payments (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Compensation | These shares were held in escrow and will vest over three , C ompensation - Stock Compensation |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | As of March 31, 2024, our allocation of purchase price for acquisitions made during 2023 are detailed below: Acquisition Date Acquisition Considerations Transferred Current Assets Property Plant & Equipment Intangible Assets Other Long Term Assets Goodwill Liabilities Noncontrolling Interest (In thousands) (1) Q1 2023 Midstream Infrastructure Assets and Incentive and Acceleration Agreement (a) $ 125,000 $ 4,736 $ 61,850 $ 3,150 $ 55,264 $ — $ — $ — (a) Consideration includes $65 million paid for certain midstream assets and the $60 million paid related to the incentive and acceleration agreement. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents a disaggregation of the Company’s revenue: Three Months Ended March 31, 2024 2023 (In thousands) Gathering and processing services $ 102,195 $ 103,425 Natural gas, NGLs and condensate sales 236,567 173,824 Other revenue 2,632 3,791 Total revenues $ 341,394 $ 281,040 |
Schedule of Remaining Performance Obligation, Expected Timing of Satisfaction | The following table presents our estimated revenue from contracts with customers for remaining performance obligations that have not yet been recognized, representing our contractually committed revenues as of March 31, 2024: Amount Fiscal Year (In thousands) Remaining of 2024 $ 44,181 2025 69,099 2026 64,789 2027 64,105 2028 63,012 Thereafter 203,692 $ 508,878 |
Schedule of Contract with Customer, Contract Liability | The following table provides information about contract liabilities from contracts with customers as of March 31, 2024: Amount (In thousands) Balance at December 31, 2023 $ 32,238 Reclassification of beginning contract liabilities to revenue as a result of performance obligations being satisfied (1,614) Cash received in advance and not recognized as revenue 514 Balance at March 31, 2024 31,138 Less: Current portion 6,301 Non-current portion $ 24,837 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, at carrying value, is as follows: March 31, December 31, 2024 2023 (In thousands) Gathering, processing, and transmission systems and facilities $ 3,300,290 $ 3,253,539 Vehicles 12,642 11,447 Computers and equipment 7,324 6,242 Less: accumulated depreciation (666,838) (626,223) Total depreciable assets, net 2,653,418 2,645,005 Construction in progress 68,816 74,369 Land 25,249 23,853 Total property, plant, and equipment, net $ 2,747,483 $ 2,743,227 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net, are comprised of the following: March 31, December 31, 2024 2023 (In thousands) Customer contracts $ 1,139,633 $ 1,139,665 Right of way assets 143,653 141,711 Less accumulated amortization (720,449) (689,706) Total amortizable intangible assets, net $ 562,837 $ 591,670 |
EQUITY METHOD INVESTMENTS (Tabl
EQUITY METHOD INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Method Investments | As of March 31, 2024, the Company owned investments in the following long-haul pipeline entities in the Permian Basin. These investments were accounted for using the equity method of accounting. For each EMI pipeline entity, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the EMI pipeline. The table below presents the ownership percentages and investment balances held by the Company for each entity: March 31, December 31, Ownership (1) 2024 2023 (In thousands) PHP 55.5% $ 1,654,920 $ 1,666,254 Breviloba 33.0% 440,869 443,684 Gulf Coast Express Pipeline LLC (“GCX”) 16.0% 430,489 431,051 $ 2,526,278 $ 2,540,989 (1) As of March 31, 2024 the Company also owned 15.0% of Epic Crude Holdings, LP (“EPIC”). The following table presents the activity in the Company’s EMIs for the three months ended March 31, 2024: Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC Total (In thousands) Balance at December 31, 2023 $ 1,666,254 $ 443,684 $ 431,051 $ 2,540,989 Contributions 3,273 — — 3,273 Distributions (1) (58,375) (10,485) (9,593) (78,453) Equity income, net (2) 43,768 7,670 9,031 60,469 Balance at March 31, 2024 $ 1,654,920 $ 440,869 $ 430,489 $ 2,526,278 (1) Distributions consisted of distributions from returns on investment of $77.2 million, which was included in cash flows from operating activities and distributions from returns of investment of $1.2 million, which was included in cash flows from investing activities. (2) For the three months ended March 31, 2024, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $2.0 million from PHP, $0.2 million from Breviloba, LLC and $1.6 million from GCX. |
Schedule of Equity Method Investment, Summarized Financial Information | The following table represents selected data for the Company’s EMI pipelines (on a 100 percent basis) for the three months ended March 31, 2024 and 2023. Three Months Ended March 31, 2024 2023 Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC (In thousands) Revenues $ 126,215 $ 50,958 $ 91,001 $ 92,840 $ 45,901 $ 89,748 Operating income 80,567 25,420 66,580 56,805 21,949 65,216 Net income 80,159 25,552 66,429 59,691 22,211 71,091 |
DEBT AND FINANCING COSTS - (Tab
DEBT AND FINANCING COSTS - (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The following table summarizes the Company’s debt obligations as of March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 (In thousands) Unsecured term loan $ 1,200,000 $ 1,200,000 $1.00 billion 2030 senior unsecured notes 1,000,000 1,000,000 $0.80 billion 2028 senior unsecured notes 800,000 800,000 $1.25 billion revolving line of credit 547,000 594,000 Total long-term debt 3,547,000 3,594,000 Debt issuance costs, net (1) (30,241) (31,510) Unamortized debt premiums and discounts, net 356 319 Total long-term debt, net $ 3,517,115 $ 3,562,809 (1) Excludes unamortized debt issuance cost related to the revolving line of credit. Unamortized debt issuance cost associated with the revolving line of credit was $5.0 million and $5.4 million as of March 31, 2024 and December 31, 2023, respectively. The current and non-current portion of the unamortized debt issuance costs related to the revolving credit facilities were included in the “Prepaid and other current assets” and the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets. |
Schedule of Financing Costs, Net | The table below presents the components of the Company’s financing costs, net of capitalized interest: Three Months Ended 2024 2023 (In thousands) Capitalized interest $ (944) $ (2,233) Debt issuance costs 1,699 1,521 Interest expense 46,712 70,020 Total financing costs, net of capitalized interest $ 47,467 $ 69,308 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Components of Accrued Expenses | The following table provides detail of the Company’s current accrued expenses on March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 (In thousands) Accrued product purchases $ 100,087 $ 109,172 Accrued taxes 6,528 632 Accrued salaries, vacation, and related benefits 3,848 1,872 Accrued capital expenditures 8,371 18,534 Accrued interest 35,746 33,760 Accrued other expenses 15,495 13,451 Total accrued expenses $ 170,075 $ 177,421 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023: March 31, 2024 Level 1 Level 2 Level 3 Total (In thousands) Commodity swap $ — $ 1,716 $ — $ 1,716 Interest rate derivatives — 8,682 — 8,682 Total assets $ — $ 10,398 $ — $ 10,398 Commodity swaps $ — $ 14,889 $ — $ 14,889 Interest rate derivatives — 340 — 340 Total liabilities $ — $ 15,229 $ — $ 15,229 December 31, 2023 Level 1 Level 2 Level 3 Total (In thousands) Commodity swap $ — $ 3,663 $ — $ 3,663 Interest rate derivatives — 4,314 — 4,314 Total assets $ — $ 7,977 $ — $ 7,977 Commodity swaps $ — $ 1,749 $ — $ 1,749 Interest rate derivatives — 5,348 — 5,348 Total liabilities $ — $ 7,097 $ — $ 7,097 |
DERIVATIVES AND HEDGING ACTIV_2
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the fair value of derivative assets and liabilities related to the interest rate swap contracts: March 31, December 31, 2024 2023 (In thousands) Derivatives assets - current $ 8,682 $ 4,314 Total derivative assets $ 8,682 $ 4,314 Derivatives liabilities - noncurrent $ 340 $ 5,348 Total derivative liabilities $ 340 $ 5,348 Three Months Ended March 31, 2024 2023 (In thousands) Cash settlements $ 3,952 $ — Favorable (unfavorable) fair value adjustment $ 13,329 $ (17,190) March 31, December 31, 2024 2023 (In thousands) Derivatives assets - current $ 1,582 $ 3,498 Derivative assets - noncurrent 134 165 Total derivative assets $ 1,716 $ 3,663 Derivative liabilities - current $ 14,811 $ 1,734 Derivatives liabilities - noncurrent 78 15 Total derivative liabilities $ 14,889 $ 1,749 Three Months Ended March 31, 2024 2023 (In thousands) Cash settlements $ (198) $ 974 (Unfavorable) favorable fair value adjustment $ (15,286) $ 5,420 |
Schedule of Detail Information of Commodity Swaps Outstanding | The following table presents detailed information of commodity swaps outstanding as of March 31, 2024 (in thousands, except volumes): March 31, 2024 Commodity Unit Volume Net Fair Value Natural Gas MMBtus 6,225,000 $ (4,224) NGL Gallons 191,058,000 (2,078) Crude Bbl 201,500 (1,023) Crude Collars Bbl 73,200 (376) Crude Basis Spread Swaps Bbl 95,600 (36) Natural Gas Basis Spread Swaps MMBtus 27,565,000 (5,436) $ (13,173) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement, Outstanding Award, Activity, Excluding Option | The table below summarizes Class A Share and Class C Share activities for the three months ended March 31, 2024: Number of Shares Weighted Avg Grant-Date Fair Market Value Per Unit Outstanding and unvested shares at December 31, 2023 5,444,488 $ 28.91 Vested 16,404 31.18 Forfeited 796 31.18 Outstanding and unvested shares at March 31, 2024 5,427,288 $ 28.90 |
Schedule of Share-Based Compensation Arrangement by Share-Based Payment Award, Options Than Options, Grants in Period, Grant Date Intrinsic Value | Table below summarizes aggregate intrinsic value (market value at vesting date) and grant-date fair value of vested Class A Shares for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 (In thousands) Aggregate intrinsic value of vested Class A Shares $ 654 $ — Grant-date fair value of vested Class A Shares $ 511 $ — |
Schedule of Nonvested Restricted Stock Shares Activity | The table below summarizes RSU activities for the three months ended March 31, 2024: Number of Shares (1) Weighted Avg Grant-Date Fair Market Value Per Unit (1) Outstanding and unvested shares at December 31, 2023 435,220 $ 31.15 Granted 585,340 35.17 Vested 290,708 34.24 Forfeited 4,039 32.44 Outstanding and unvested shares at March 31, 2024 725,813 $ 33.30 (1) Number of shares and weighted average fair market value per share here include RSUs issued to new employees that transitioned from ALTM as part of the merger as replacement awards. |
Schedule of Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | Table below summarizes aggregate intrinsic value (market value at vesting date) and grant-date fair value of RSUs for the three months ended March 31, 2024 and 2023. Three Months Ended March 31, 2024 2023 (In thousands) Aggregate intrinsic value of vested RSUs $ 10,148 $ 6,700 Grant-date fair value of vested RSUs $ 9,954 $ 6,188 |
Schedule of Share-Based Payment Arrangement, Performance Shares, Activity | The table below summarizes PSU activities for the three months ended March 31, 2024: Number of Shares Weighted Avg Grant-Date Fair Market Value Per Unit Granted in 2024 198,703 $ 36.76 Outstanding and unvested shares at March 31, 2024 198,703 $ 36.76 |
Schedule of Share-Based Payment Award, Other Than Options, Valuation Assumptions | The table below presents a summary of the grant-date fair value assumptions used to value the PSUs on grant date: March 2024 Grant-date fair value per unit $36.76 Beginning average price $32.84 Risk-free interest rate 4.21% Volatility factor 37% Expected term 2.82 years |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Schedule of Total Income Tax Provision (Benefit) | The Company is subject to U.S. federal income tax and state taxes. Income tax expense included in the condensed consolidated financial statements in this Quarterly Report on Form 10-Q is as follows: Three Months Ended 2024 2023 (In thousands) Income before income taxes $ 39,194 $ 4,715 Income tax expense $ 3,787 $ 416 Effective tax rate 9.66 % 8.82 % |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Net Income Per Share | The computation of basic and diluted net income per share for the periods presented in the condensed consolidated financial statements is shown in the tables below: Three Months Ended 2024 2023 (In thousands, except per share amounts) Net income attributable to Class A common shareholders $ 11,550 $ 1,436 Less: Net income available to participating unvested restricted Class A common shareholders (1) (4,394) (4,156) Total net income attributable to Class A common shareholders $ 7,156 $ (2,720) Weighted average shares outstanding - basic (2) 57,869 47,612 Dilutive effect of unvested Class A common shares (3) 523 213 Weighted average shares outstanding - diluted (2)(4) 58,392 47,825 Net income available per common share - basic $ 0.12 $ (0.06) Net income available per common share - diluted $ 0.12 $ (0.06) (1) Represents dividends paid to unvested Class A Shares. (2) Weighted average Class A common shares have been retrospectively restated due to bonus effect of Class A common shares issued under the Reinvestment Agreement for all periods presented in which the Class A common shares were outstanding. (3) Includes dilutive effect from both RSUs and PSUs on unvested Class A common shares. (4) The effect of an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for all periods presented in which the Common Units were outstanding. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables present the reconciliation of the non-GAAP measure Segment Adjusted EBITDA to the GAAP measure segment income (loss) before income taxes as of and for the three months period ended March 31, 2024 and 2023: Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated (In thousands) For the Three Months Ended March 31, 2024 Segment income (loss) before income taxes $ 50,173 $ 65,298 $ (76,277) $ 39,194 Add back: Interest expense 16 — 47,451 47,467 Depreciation and amortization 71,310 2,290 6 73,606 Contract assets amortization 1,655 — — 1,655 Proportionate EMI EBITDA — 88,402 — 88,402 Share-based compensation — — 22,561 22,561 Loss on disposal of assets 4,166 — — 4,166 Commodity hedging unrealized loss 15,088 — — 15,088 Integration costs 41 — — 41 Other one-time costs or amortization 536 — 1,889 2,425 Deduct: Interest income — — 577 577 Equity income from unconsolidated affiliates — 60,469 — 60,469 Segment Adjusted EBITDA (2) $ 142,985 $ 95,521 $ (4,947) $ 233,559 Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated (In thousands) For the Three Months Ended March 31, 2023 Segment income (loss) before income taxes $ 51,012 $ 46,432 $ (92,729) $ 4,715 Add back: Interest expense 9 — 69,299 69,308 Depreciation and amortization 68,393 455 6 68,854 Contract assets amortization 1,655 — — 1,655 Commodity hedging unrealized gain (4,987) — — (4,987) Proportionate EMI EBITDA — 71,867 — 71,867 Share-based compensation — — 17,540 17,540 Loss on disposal of assets 102 — — 102 Integration costs 7 — 918 925 Acquisition transaction costs 33 — 235 268 Other one-time costs or amortization 3,025 — 723 3,748 Deduct: Warrant valuation adjustment — — 44 44 Equity income from unconsolidated affiliates — 46,464 — 46,464 Segment Adjusted EBITDA (2) $ 119,249 $ 72,290 $ (4,052) $ 187,487 (1) Corporate and Other represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain General and Administrative Expense items. Items included here to reconcile operating segments profit and loss with the Company’s consolidated profit and loss. (2) Segment adjusted EBITDA is a non-GAAP measure; please see Key Performance Metrics in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q, for a definition of segment adjusted EBITDA. The following tables present the revenue for the individual operating segments for the three month periods ended March 31, 2024 and 2023: Midstream Logistics Pipeline Transportation Elimination Consolidated (In thousands) For the Three Months Ended March 31, 2024 Revenue $ 336,688 $ 2,074 $ — $ 338,762 Other revenue 2,630 2 — 2,632 Intersegment revenue (1) — 6,215 (6,215) — Total segment operating revenue $ 339,318 $ 8,291 $ (6,215) $ 341,394 Midstream Logistics Pipeline Transportation Consolidated (In thousands) For the Three Months Ended March 31, 2023 Revenue $ 276,555 $ 694 $ 277,249 Other revenue 3,789 2 3,791 Total segment operating revenue $ 280,344 $ 696 $ 281,040 (1) The Company accounts for intersegment sales at market prices, while it accounts for asset transfers at book value. Intersegment revenue is eliminated at consolidation. The following table presents total assets for each operating segment as of March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 (In thousands) Midstream Logistics $ 3,734,578 $ 3,772,764 Pipeline Transportation (1) 2,686,670 2,703,588 Segment total assets 6,421,248 6,476,352 Corporate and other 26,336 20,521 Total assets $ 6,447,584 $ 6,496,873 (1) Includes investment in unconsolidated affiliates of $2.53 billion and $2.54 billion as of March 31, 2024 and December 31, 2023, respectively. |
DESCRIPTION OF THE ORGANIZATI_3
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2024 USD ($) entity | Mar. 18, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Interest in pipeline entities | entity | 4 | ||||
Costs of sales (exclusive of depreciation and amortization) | [1],[2] | $ 153,687 | $ 115,877 | ||
Highway Pipeline LLC and Breviloba, LLC | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Costs of sales (exclusive of depreciation and amortization) | 13,900 | 1,900 | |||
Apache Midstream and Titus | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Operating expenses | $ 200 | 300 | |||
Apache | Maximum | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Common stock, share outstanding, ownership percentage | 0% | 10% | |||
Related Party | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Revenue | 17,200 | 25,800 | |||
Costs of sales (exclusive of depreciation and amortization) | $ 23,300 | 19,700 | |||
Related Party | Apache Midstream and Titus | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Revenue | $ 17,200 | 25,800 | |||
Costs of sales (exclusive of depreciation and amortization) | $ 9,400 | $ 17,800 | |||
Common Stock | Related Party | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Ownership percentage | 5% | ||||
Kinetik Holdings LP | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Limited partners, ownership interest | 39% | ||||
[1] Cost of sales (exclusive of depreciation and amortization) is net of gas service revenues totaling $44.5 million and $30.5 million for the three months ended March 31, 2024 and 2023, respectively, for certain volumes where we act as principal. |
BUSINESS COMBINATIONS - Allocat
BUSINESS COMBINATIONS - Allocation of Acquisition Costs to Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 13, 2023 |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,077 | $ 5,077 | |
Midstream Infrastructure Assets and Incentive and Acceleration Agreement | |||
Business Acquisition [Line Items] | |||
Considerations Transferred | $ 125,000 | ||
Property Plant & Equipment | 61,850 | ||
Intangible Assets | 3,150 | ||
Goodwill | 0 | ||
Liabilities | 0 | ||
Noncontrolling Interest | 0 | ||
Assets acquired | $ 65,000 | ||
Incentive and acceleration agreement | 60,000 | ||
Midstream Infrastructure Assets and Incentive and Acceleration Agreement | Current Assets | |||
Business Acquisition [Line Items] | |||
Current Assets | 4,736 | ||
Midstream Infrastructure Assets and Incentive and Acceleration Agreement | Other Long Term Assets | |||
Business Acquisition [Line Items] | |||
Other Long Term Assets | $ 55,264 |
BUSINESS COMBINATIONS - Additio
BUSINESS COMBINATIONS - Additional Information (Details) - Midstream Infrastructure Assets and Incentive and Acceleration Agreement - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2024 | Mar. 13, 2023 | |
Business Acquisition [Line Items] | |||
Assets acquired | $ 65,000 | ||
Agreement term | 20 years | ||
Incentive and acceleration agreement | $ 60,000 | ||
Current Assets | |||
Business Acquisition [Line Items] | |||
Current Assets | 4,736 | ||
Other Long Term Assets | |||
Business Acquisition [Line Items] | |||
Other long term assets | $ 55,264 | ||
Plan | |||
Business Acquisition [Line Items] | |||
Assets acquired | $ 65,000 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Disaggregation of Revenue [Line Items] | |||
Total operating revenues | [1] | $ 341,394 | $ 281,040 |
Gathering and processing services | |||
Disaggregation of Revenue [Line Items] | |||
Total operating revenues | 102,195 | 103,425 | |
Natural gas, NGLs and condensate sales | |||
Disaggregation of Revenue [Line Items] | |||
Total operating revenues | 236,567 | 173,824 | |
Other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total operating revenues | $ 2,632 | $ 3,791 | |
[1] Includes amounts associated with related parties of $17.2 million and $25.8 million for the three months ended March 31, 2024 and 2023, respectively. |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | ||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | [1] | $ 341,394,000 | $ 281,040,000 | |
Capitalized contract cost | 69,500,000 | $ 71,200,000 | ||
Amortization of contract costs | 1,655,000 | 1,655,000 | ||
Minimum Volume Commitments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 0 | $ 1,100,000 | ||
[1] Includes amounts associated with related parties of $17.2 million and $25.8 million for the three months ended March 31, 2024 and 2023, respectively. |
REVENUE RECOGNITION - Remaining
REVENUE RECOGNITION - Remaining Performance Obligations (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 508,878 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 44,181 |
Expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 69,099 |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 64,789 |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 64,105 |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 63,012 |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 203,692 |
Expected timing of satisfaction, period |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 32,238 | |
Reclassification of beginning contract liabilities to revenue as a result of performance obligations being satisfied | (1,614) | |
Cash received in advance and not recognized as revenue | 514 | |
Ending balance | 31,138 | |
Less: Current portion | 6,301 | |
Non-current portion | $ 24,837 | $ 25,761 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Less: accumulated depreciation | $ (666,838,000) | $ (626,223,000) | |
Total depreciable assets, net | 2,653,418,000 | 2,645,005,000 | |
Total property, plant, and equipment, net | 2,747,483,000 | 2,743,227,000 | |
Depreciation expense | 42,900,000 | $ 38,400,000 | |
Impairment of long-lived assets | 0 | $ 0 | |
Gathering, processing, and transmission systems and facilities | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 3,300,290,000 | 3,253,539,000 | |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 12,642,000 | 11,447,000 | |
Computers and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 7,324,000 | 6,242,000 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 68,816,000 | 74,369,000 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 25,249,000 | $ 23,853,000 |
INTANGIBLE ASSETS, NET - Intang
INTANGIBLE ASSETS, NET - Intangible Asset (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Less accumulated amortization | $ (720,449) | $ (689,706) |
Total amortizable intangible assets, net | 562,837 | 591,670 |
Customer contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortizable intangible assets, gross | 1,139,633 | 1,139,665 |
Right of way assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortizable intangible assets, gross | $ 143,653 | $ 141,711 |
INTANGIBLE ASSETS, NET - Narrat
INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Initial term | 10 years | |
Option to renewal | 10 years | |
Percent of original consideration paid | 130% | |
Remaining weighted average amortization period | 6 years 9 months 3 days | |
Amortization of intangible assets | $ 30,700,000 | $ 30,500,000 |
Impairment of intangible assets | $ 0 | $ 0 |
Right of way assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 10 years | |
Remaining weighted average amortization period | 6 years 5 months 12 days | |
Customer Contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining weighted average amortization period | 6 years 9 months 21 days | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining term | 1 year | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining term | 20 years |
EQUITY METHOD INVESTMENTS - Inf
EQUITY METHOD INVESTMENTS - Information of Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity method interests | $ 2,526,278 | $ 2,540,989 | |
Difference between carrying amount and underlying equity | 345,900 | 349,300 | |
Capitalized interest | 24,500 | 24,700 | |
Movement In Equity Method Interests [Roll Forward] | |||
Beginning balance | 2,540,989 | ||
Contributions | 3,273 | ||
Distributions | (78,453) | ||
Equity income, net | 60,469 | $ 46,464 | |
Ending balance | 2,526,278 | ||
Distributions from unconsolidated affiliates | 77,213 | 67,764 | |
Distributions from unconsolidated affiliate | $ 1,240 | $ 5,793 | |
Altus Midstream LP | Minimum | Underlying Pipeline | |||
Schedule of Equity Method Investments [Line Items] | |||
Useful life | 20 years | ||
Altus Midstream LP | Maximum | Underlying Pipeline | |||
Schedule of Equity Method Investments [Line Items] | |||
Useful life | 32 years | ||
PHP | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 55.50% | ||
Equity method interests | $ 1,654,920 | 1,666,254 | |
Movement In Equity Method Interests [Roll Forward] | |||
Beginning balance | 1,666,254 | ||
Contributions | 3,273 | ||
Distributions | (58,375) | ||
Equity income, net | 43,768 | ||
Ending balance | 1,654,920 | ||
Amortization | $ 2,000 | ||
Breviloba | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 33% | ||
Equity method interests | $ 440,869 | 443,684 | |
Movement In Equity Method Interests [Roll Forward] | |||
Beginning balance | 443,684 | ||
Contributions | 0 | ||
Distributions | (10,485) | ||
Equity income, net | 7,670 | ||
Ending balance | 440,869 | ||
Amortization | $ 200 | ||
Gulf Coast Express Pipeline LLC (“GCX”) | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 16% | ||
Equity method interests | $ 430,489 | $ 431,051 | |
Movement In Equity Method Interests [Roll Forward] | |||
Beginning balance | 431,051 | ||
Contributions | 0 | ||
Distributions | (9,593) | ||
Equity income, net | 9,031 | ||
Ending balance | 430,489 | ||
Amortization | $ 1,600 | ||
Epic Crude Holdings, LP | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 15% |
EQUITY METHOD INVESTMENTS - Sum
EQUITY METHOD INVESTMENTS - Summarized Financial Information of Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | ||
Operating income | $ 26,101 | $ 27,265 |
Net income | 35,407 | 4,299 |
PHP | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 126,215 | 92,840 |
Operating income | 80,567 | 56,805 |
Net income | 80,159 | 59,691 |
Breviloba, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 50,958 | 45,901 |
Operating income | 25,420 | 21,949 |
Net income | 25,552 | 22,211 |
Gulf Coast Express Pipeline LLC (“GCX”) | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 91,001 | 89,748 |
Operating income | 66,580 | 65,216 |
Net income | $ 66,429 | $ 71,091 |
DEBT AND FINANCING COSTS - Sche
DEBT AND FINANCING COSTS - Schedule of Long-Term Debt (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 3,547,000,000 | $ 3,594,000,000 |
Debt issuance costs, net | (30,241,000) | (31,510,000) |
Unamortized debt premiums and discounts, net | 356,000 | 319,000 |
Total long-term debt, net | 3,517,115,000 | 3,562,809,000 |
Unamortized debt issuance cost | 30,200,000 | 31,500,000 |
$1.25 billion revolving line of credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 547,000,000 | 594,000,000 |
Unamortized debt issuance cost | 5,000,000 | 5,400,000 |
Term Loan | Unsecured term loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 1,200,000,000 | 1,200,000,000 |
Term Loan | $1.25 billion revolving line of credit | ||
Debt Instrument [Line Items] | ||
Face amount | 1,250,000,000 | |
Unsecured Debt | $1.00 billion 2030 senior unsecured notes | ||
Debt Instrument [Line Items] | ||
Face amount | 1,000,000,000 | |
Total long-term debt | 1,000,000,000 | 1,000,000,000 |
Unsecured Debt | $0.80 billion 2028 senior unsecured notes | ||
Debt Instrument [Line Items] | ||
Face amount | 800,000,000 | |
Total long-term debt | $ 800,000,000 | $ 800,000,000 |
DEBT AND FINANCING COSTS - Sc_2
DEBT AND FINANCING COSTS - Schedule of Financing Costs, Net of Capitalized Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Disclosure [Abstract] | ||
Capitalized interest | $ (944) | $ (2,233) |
Debt issuance costs | 1,699 | 1,521 |
Interest expense | 46,712 | 70,020 |
Total financing costs, net of capitalized interest | $ 47,467 | $ 69,308 |
DEBT AND FINANCING COSTS - Addi
DEBT AND FINANCING COSTS - Additional Information (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 08, 2022 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance cost | $ 30,200,000 | $ 31,500,000 | |
Unamortized debt premiums and discounts, net | 356,000 | 319,000 | |
Debt, fair value | $ 3,530,000,000 | $ 3,570,000,000 | |
Senior Notes | 5.825 % Senior Notes Due 2030 | |||
Debt Instrument [Line Items] | |||
Stated percentage | 5.875% | 5.875% | |
Senior Notes | 6.625 % Senior Notes Due 2028 | |||
Debt Instrument [Line Items] | |||
Stated percentage | 6.625% | 6.625% | |
Unsecured Debt | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt maximum borrowing capacity | $ 1,250,000,000 | ||
Letters of credit outstanding | $ 12,600,000 | $ 12,600,000 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accrued product purchases | $ 100,087 | $ 109,172 |
Accrued taxes | 6,528 | 632 |
Accrued salaries, vacation, and related benefits | 3,848 | 1,872 |
Accrued capital expenditures | 8,371 | 18,534 |
Accrued interest | 35,746 | 33,760 |
Accrued other expenses | 15,495 | 13,451 |
Total accrued expenses | $ 170,075 | $ 177,421 |
EQUITY (Details)
EQUITY (Details) $ in Thousands | 3 Months Ended | ||||
Mar. 07, 2024 USD ($) | Mar. 31, 2024 USD ($) shares | Mar. 31, 2023 shares | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 shares | |
Class of Stock [Line Items] | |||||
Redeemable noncontrolling interest — limited partner | $ | $ 3,624,670 | $ 3,157,807 | |||
Class C Common Stock | |||||
Class of Stock [Line Items] | |||||
Common stock, shares issued (in shares) | 93,942,788 | 94,089,038 | |||
Common stock, shares outstanding (in shares) | 93,942,788 | 94,089,038 | |||
Class C Common Stock | Common Stock | |||||
Class of Stock [Line Items] | |||||
Stock redeemed (in shares) | 146,250 | ||||
Common stock, shares issued (in shares) | 93,900,000 | ||||
Common stock, shares outstanding (in shares) | 93,943,000 | 94,089,000 | 94,089,000 | 94,270,000 | |
Class A Common Stock | |||||
Class of Stock [Line Items] | |||||
Common stock, redemption ratio | 1 | ||||
Common stock, shares issued (in shares) | 59,712,487 | 57,096,538 | |||
Common stock, shares outstanding (in shares) | 59,712,487 | 57,096,538 | |||
Class A Common Stock | Public warrants | |||||
Class of Stock [Line Items] | |||||
Class of warrant or right, purchase ratio for common stock | 0.1 | ||||
Class A Common Stock | Common Stock | |||||
Class of Stock [Line Items] | |||||
Stock redeemed (in shares) | 146,000 | 181,000 | |||
Common stock, shares issued (in shares) | 59,700,000 | ||||
Common stock, shares outstanding (in shares) | 59,712,000 | 49,054,000 | 57,097,000 | 45,679,000 | |
Class A Common Stock and Common Units | Common Stock | |||||
Class of Stock [Line Items] | |||||
Dividends, cash | $ | $ 39,500 | ||||
Class A Common Stock By Reinvestment Holders | Common Stock | |||||
Class of Stock [Line Items] | |||||
Dividends, cash | $ | $ 74,200 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Liabilities | ||
Total liabilities | $ 3,796,350 | $ 3,869,889 |
Fair Value, Recurring | ||
Assets | ||
Total derivative assets | 10,398 | 7,977 |
Liabilities | ||
Total liabilities | 15,229 | 7,097 |
Fair Value, Recurring | Commodity swap | ||
Assets | ||
Total derivative assets | 1,716 | 3,663 |
Liabilities | ||
Total derivative liabilities | 14,889 | 1,749 |
Fair Value, Recurring | Interest rate derivatives | ||
Assets | ||
Total derivative assets | 8,682 | 4,314 |
Liabilities | ||
Total derivative liabilities | 340 | 5,348 |
Fair Value, Recurring | Level 1 | ||
Assets | ||
Total derivative assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Fair Value, Recurring | Level 1 | Commodity swap | ||
Assets | ||
Total derivative assets | 0 | 0 |
Liabilities | ||
Total derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 1 | Interest rate derivatives | ||
Assets | ||
Total derivative assets | 0 | 0 |
Liabilities | ||
Total derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets | ||
Total derivative assets | 10,398 | 7,977 |
Liabilities | ||
Total liabilities | 15,229 | 7,097 |
Fair Value, Recurring | Level 2 | Commodity swap | ||
Assets | ||
Total derivative assets | 1,716 | 3,663 |
Liabilities | ||
Total derivative liabilities | 14,889 | 1,749 |
Fair Value, Recurring | Level 2 | Interest rate derivatives | ||
Assets | ||
Total derivative assets | 8,682 | 4,314 |
Liabilities | ||
Total derivative liabilities | 340 | 5,348 |
Fair Value, Recurring | Level 3 | ||
Assets | ||
Total derivative assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Fair Value, Recurring | Level 3 | Commodity swap | ||
Assets | ||
Total derivative assets | 0 | 0 |
Liabilities | ||
Total derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 3 | Interest rate derivatives | ||
Assets | ||
Total derivative assets | 0 | 0 |
Liabilities | ||
Total derivative liabilities | $ 0 | $ 0 |
DERIVATIVES AND HEDGING ACTIV_3
DERIVATIVES AND HEDGING ACTIVITIES - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) agreement | |
Interest Rate Swap | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Number of instruments held | agreement | 2 |
Derivative notional amount | $ | $ 1,700 |
Interest Rate Swap | Minimum | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative, fixed interest rate | 4.38% |
Interest Rate Swap | Maximum | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative, fixed interest rate | 4.48% |
Commodity Swap | Minimum | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Term of contract | 1 month |
Commodity Swap | Maximum | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Term of contract | 26 months |
DERIVATIVES AND HEDGING ACTIV_4
DERIVATIVES AND HEDGING ACTIVITIES - Fair Value of Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivatives assets - current | $ 10,264 | $ 7,812 |
Derivative asset, non-current | 134 | 165 |
Derivative liabilities - current | 14,811 | 1,734 |
Derivatives liabilities - noncurrent | 418 | 5,363 |
Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivatives assets - current | 8,682 | 4,314 |
Total derivative assets | 8,682 | 4,314 |
Derivatives liabilities - noncurrent | 340 | 5,348 |
Total derivative liabilities | 340 | 5,348 |
Commodity Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivatives assets - current | 1,582 | 3,498 |
Derivative asset, non-current | 134 | 165 |
Total derivative assets | 1,716 | 3,663 |
Derivative liabilities - current | 14,811 | 1,734 |
Derivatives liabilities - noncurrent | 78 | 15 |
Total derivative liabilities | $ 14,889 | $ 1,749 |
DERIVATIVES AND HEDGING ACTIV_5
DERIVATIVES AND HEDGING ACTIVITIES - Derivatives activities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Cash settlements | $ (3,754) | $ (974) |
Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Cash settlements | 3,952 | 0 |
(Unfavorable) favorable fair value adjustment | 13,329 | (17,190) |
Commodity Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Cash settlements | (198) | 974 |
(Unfavorable) favorable fair value adjustment | $ (15,286) | $ 5,420 |
DERIVATIVES AND HEDGING ACTIV_6
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Detail Information of Commodity Swaps Outstanding (Details) - Commodity Swap $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) MMBTU bbl gal | |
Derivative [Line Items] | |
Net Fair Value | $ (13,173) |
Natural Gas | |
Derivative [Line Items] | |
Notional Quantity (Energy) | MMBTU | 6,225,000 |
Net Fair Value | $ (4,224) |
NGL | |
Derivative [Line Items] | |
Notional Quantity (Volume) | gal | 191,058,000 |
Net Fair Value | $ (2,078) |
Crude | |
Derivative [Line Items] | |
Notional Quantity (Volume) | bbl | 201,500 |
Net Fair Value | $ (1,023) |
Crude Collars | |
Derivative [Line Items] | |
Notional Quantity (Volume) | bbl | 73,200 |
Net Fair Value | $ (376) |
Crude Basis Spread Swaps | |
Derivative [Line Items] | |
Notional Quantity (Volume) | bbl | 95,600 |
Net Fair Value | $ (36) |
Natural Gas Basis Spread Swaps | |
Derivative [Line Items] | |
Notional Quantity (Volume) | bbl | 27,565,000 |
Net Fair Value | $ (5,436) |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) shares | Mar. 31, 2023 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | $ | $ 22,561 | $ 17,540 |
Class A and Class C Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cost not yet recognized | $ | $ 61,600 | |
Period for recognition for remaining compensation cost | 1 year 6 months 18 days | |
Class A and Class C Shares | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Class A and Class C Shares | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
Performance shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 198,703 | |
Cost not yet recognized | $ | $ 7,100 | |
Period for recognition for remaining compensation cost | 2 years 9 months | |
Performance period | 3 years | |
Vested (in shares) | 0 | |
Performance shares | ALTM | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
Granted (in shares) | 395,416 | |
Performance shares | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of potential target shares | 0% | |
Performance shares | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of potential target shares | 200% | |
Restricted stock units awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 585,340 | |
Cost not yet recognized | $ | $ 18,500 | |
Period for recognition for remaining compensation cost | 2 years 10 days | |
Settlement basis (in shares) | 1 | |
Vested (in shares) | 290,708 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Class A and Class C Shares Activities (Details) - Common Stock | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Shares | |
Outstanding at the beginning of period (in shares) | shares | 5,444,488 |
Vested (in shares) | shares | 16,404 |
Forfeited (in shares) | shares | 796 |
Outstanding at the end of period (in shares) | shares | 5,427,288 |
Weighted Avg Grant-Date Fair Market Value Per Unit | |
Outstanding at the beginning of period (in dollars per share) | $ / shares | $ 28.91 |
Vested (in dollars per share) | $ / shares | 31.18 |
Forfeited (in dollars per share) | $ / shares | 31.18 |
Outstanding at the end of period (in dollars per share) | $ / shares | $ 28.90 |
SHARE-BASED COMPENSATION - Sc_2
SHARE-BASED COMPENSATION - Schedule of Aggregate Intrinsic Value (Market Value At Vesting Date) (Details) - Class A Common Stock - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate intrinsic value of vested Class A Shares | $ 654 | $ 0 |
Grant-date fair value of vested Class A Shares | $ 511 | $ 0 |
SHARE-BASED COMPENSATION - Sc_3
SHARE-BASED COMPENSATION - Schedule of RSUs Activities (Details) - Restricted stock units awards | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Shares | |
Outstanding at the beginning of period (in shares) | shares | 435,220 |
Granted (in shares) | shares | 585,340 |
Vested (in shares) | shares | 290,708 |
Forfeited (in shares) | shares | 4,039 |
Outstanding at the end of period (in shares) | shares | 725,813 |
Weighted Avg Grant-Date Fair Market Value Per Unit | |
Outstanding at the beginning of period (in dollars per share) | $ / shares | $ 31.15 |
Granted (in dollars per share) | $ / shares | 35.17 |
Vested (in dollars per share) | $ / shares | 34.24 |
Forfeited (in dollars per share) | $ / shares | 32.44 |
Outstanding at the end of period (in dollars per share) | $ / shares | $ 33.30 |
SHARE-BASED COMPENSATION - Sc_4
SHARE-BASED COMPENSATION - Schedule of Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity (Details) - Restricted stock units awards - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate intrinsic value of vested RSUs | $ 10,148 | $ 6,700 |
Grant-date fair value of vested RSUs | $ 9,954 | $ 6,188 |
SHARE-BASED COMPENSATION - Sc_5
SHARE-BASED COMPENSATION - Schedule of PSUs Activities (Details) - Performance shares | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Shares | |
Granted (in shares) | 198,703 |
Vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Outstanding at the end of period (in shares) | 198,703 |
Weighted Avg Grant-Date Fair Market Value Per Unit | |
Granted (in dollars per share) | $ / shares | $ 36.76 |
Outstanding at the end of period (in dollars per share) | $ / shares | $ 36.76 |
SHARE-BASED COMPENSATION - Gran
SHARE-BASED COMPENSATION - Grant Fair Value Assumptions (Details) - Performance shares | 3 Months Ended |
Mar. 31, 2024 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant-date fair value per unit | $ 36.76 |
Beginning average price | $ 32.84 |
Risk-free interest rate | 4.21% |
Volatility factor | 37% |
Expected term | 2 years 9 months 25 days |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 39,194 | $ 4,715 |
Income tax expense | $ 3,787 | $ 416 |
Effective tax rate | 9.66% | 8.82% |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Earnings Per Share [Abstract] | |||
Net income attributable to Class A common shareholders | $ 11,550 | $ 1,436 | |
Less: Net income available to participating unvested restricted Class A common shareholders | (4,394) | (4,156) | |
Total net income attributable to Class A common shareholders - basic | $ 7,156 | $ (2,720) | |
Weighted average shares outstanding - basic (in shares) | [1] | 57,869 | 47,612 |
Dilutive effect of unvested Class A common shares (in shares) | 523 | 213 | |
Weighted average shares outstanding - diluted (in shares) | [1] | 58,392 | 47,825 |
Net income available per common share - basic (in USD per share) | $ 0.12 | $ (0.06) | |
Net income available per common share - diluted (in USD per share) | $ 0.12 | $ (0.06) | |
[1] Weighted average Class A common shares have been retrospectively restated due to effect of Class A common shares issued under the Reinvestment Agreement for all periods presented in which the Class A common shares were outstanding. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Jun. 11, 2019 | Mar. 31, 2024 | Dec. 31, 2023 | Feb. 28, 2021 |
Loss Contingencies [Line Items] | ||||
Loss contingency accrual | $ 0 | $ 0 | ||
Permian Gas | ||||
Loss Contingencies [Line Items] | ||||
Maximum annual amount to be paid | $ 60,500,000 | |||
Period of annual volume without exceeding incentive forecast volume | 4 years | |||
Expected period of annual volume without exceeding incentive forecast volume | 6 years | |||
Contingent liabilities | $ 0 | $ 0 | ||
Winter Storm Uri | ||||
Loss Contingencies [Line Items] | ||||
Receivable | $ 11,600,000 | |||
Receivable, noncurrent | 8,000,000 | |||
Receivable allowance | $ 0 |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) agreement Segment stream | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segments | Segment | 2 | ||
Number of reportable segments | Segment | 2 | ||
Segment Reporting Information [Line Items] | |||
Income before income taxes | $ 39,194 | $ 4,715 | |
Add back: | |||
Interest expense | 47,467 | 69,308 | |
Depreciation and amortization expenses | 73,606 | 68,854 | |
Contract assets amortization | 1,655 | 1,655 | |
Commodity hedging unrealized gain | (4,987) | ||
Proportionate EMI EBITDA | 88,402 | 71,867 | |
Share-based compensation | 22,561 | 17,540 | |
Loss on disposal of assets | 4,166 | 102 | |
Commodity hedging unrealized loss | 15,088 | ||
Integration costs | 41 | 925 | |
Acquisition transaction costs | 268 | ||
Other one-time costs or amortization | 2,425 | 3,748 | |
Deduct: | |||
Interest income | 577 | ||
Warrants fair value adjustment | 0 | 44 | |
Equity income from unconsolidated affiliates | 60,469 | 46,464 | |
Segment adjusted EBITDA | 233,559 | 187,487 | |
Total assets | 6,447,584 | $ 6,496,873 | |
Investments in unconsolidated affiliates | 2,526,278 | 2,540,989 | |
Operating Segments | |||
Deduct: | |||
Total assets | $ 6,421,248 | 6,476,352 | |
Operating Segments | Midstream Logistics | |||
Segment Reporting Information [Line Items] | |||
Number of streams in which a segment operates | stream | 3 | ||
Income before income taxes | $ 50,173 | 51,012 | |
Add back: | |||
Interest expense | 16 | 9 | |
Depreciation and amortization expenses | 71,310 | 68,393 | |
Contract assets amortization | 1,655 | 1,655 | |
Commodity hedging unrealized gain | (4,987) | ||
Proportionate EMI EBITDA | 0 | 0 | |
Share-based compensation | 0 | 0 | |
Loss on disposal of assets | 4,166 | 102 | |
Commodity hedging unrealized loss | 15,088 | ||
Integration costs | 41 | 7 | |
Acquisition transaction costs | 33 | ||
Other one-time costs or amortization | 536 | 3,025 | |
Deduct: | |||
Interest income | 0 | ||
Warrants fair value adjustment | 0 | ||
Equity income from unconsolidated affiliates | 0 | 0 | |
Segment adjusted EBITDA | 142,985 | 119,249 | |
Revenue | 339,318 | 280,344 | |
Total assets | 3,734,578 | 3,772,764 | |
Operating Segments | Midstream Logistics | Product and Service | |||
Deduct: | |||
Revenue | 336,688 | 276,555 | |
Operating Segments | Midstream Logistics | Other revenue | |||
Deduct: | |||
Revenue | $ 2,630 | 3,789 | |
Operating Segments | Pipeline Transportation | |||
Segment Reporting Information [Line Items] | |||
Number of pipelines with equity investment interest | agreement | 4 | ||
Income before income taxes | $ 65,298 | 46,432 | |
Add back: | |||
Interest expense | 0 | 0 | |
Depreciation and amortization expenses | 2,290 | 455 | |
Contract assets amortization | 0 | 0 | |
Commodity hedging unrealized gain | 0 | ||
Proportionate EMI EBITDA | 88,402 | 71,867 | |
Share-based compensation | 0 | 0 | |
Loss on disposal of assets | 0 | 0 | |
Commodity hedging unrealized loss | 0 | ||
Integration costs | 0 | 0 | |
Acquisition transaction costs | 0 | ||
Other one-time costs or amortization | 0 | 0 | |
Deduct: | |||
Interest income | 0 | ||
Warrants fair value adjustment | 0 | ||
Equity income from unconsolidated affiliates | 60,469 | 46,464 | |
Segment adjusted EBITDA | 95,521 | 72,290 | |
Revenue | 8,291 | 696 | |
Total assets | 2,686,670 | 2,703,588 | |
Operating Segments | Pipeline Transportation | Product and Service | |||
Deduct: | |||
Revenue | 2,074 | 694 | |
Operating Segments | Pipeline Transportation | Other revenue | |||
Deduct: | |||
Revenue | $ 2 | 2 | |
Operating Segments | Operating Revenues, Cost of Sales, Operating Expenses and Ad Valorem Expenses | Segment Concentration Risk | Midstream Logistics | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 99% | ||
Operating Segments | Valorem Expenses | Segment Concentration Risk | Midstream Logistics | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 93% | ||
Operating Segments | EBITDA | Segment Concentration Risk | Pipeline Transportation | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 92% | ||
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Income before income taxes | $ (76,277) | (92,729) | |
Add back: | |||
Interest expense | 47,451 | 69,299 | |
Depreciation and amortization expenses | 6 | 6 | |
Contract assets amortization | 0 | 0 | |
Commodity hedging unrealized gain | 0 | ||
Proportionate EMI EBITDA | 0 | 0 | |
Share-based compensation | 22,561 | 17,540 | |
Loss on disposal of assets | 0 | 0 | |
Commodity hedging unrealized loss | 0 | ||
Integration costs | 0 | 918 | |
Acquisition transaction costs | 235 | ||
Other one-time costs or amortization | 1,889 | 723 | |
Deduct: | |||
Interest income | 577 | ||
Warrants fair value adjustment | 44 | ||
Equity income from unconsolidated affiliates | 0 | 0 | |
Segment adjusted EBITDA | (4,947) | (4,052) | |
Total assets | $ 26,336 | $ 20,521 | |
Corporate and Other | General and Administrative Expenses and Debt Service Costs | Segment Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 86% | ||
Elimination | |||
Deduct: | |||
Revenue | $ (6,215) | ||
Elimination | Product and Service | |||
Deduct: | |||
Revenue | 0 | ||
Elimination | Other revenue | |||
Deduct: | |||
Revenue | 0 | ||
Elimination | Midstream Logistics | |||
Deduct: | |||
Revenue | 0 | ||
Elimination | Pipeline Transportation | |||
Deduct: | |||
Revenue | 6,215 | ||
Consolidated | |||
Deduct: | |||
Revenue | 341,394 | 281,040 | |
Consolidated | Product and Service | |||
Deduct: | |||
Revenue | 338,762 | 277,249 | |
Consolidated | Other revenue | |||
Deduct: | |||
Revenue | $ 2,632 | $ 3,791 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | May 09, 2024 | Apr. 18, 2024 | Apr. 02, 2024 |
Subsequent Event [Line Items] | |||
Accounts receivable from securitization | $ 150 | ||
Line of credit facility, remaining borrowing capacity | $ 1,000 | ||
Gulf Coast Express Pipeline LLC | |||
Subsequent Event [Line Items] | |||
Ownership percentage sold | 16% | ||
Proceeds from sale | $ 540 | ||
Cash payment | 510 | ||
Additional earn out in cash | 30 | ||
Class A Common Stock | |||
Subsequent Event [Line Items] | |||
Dividends declared (in USD per share) | $ 0.75 | ||
The Partnership | |||
Subsequent Event [Line Items] | |||
Distribution declared (in USD per share) | $ 0.75 | ||
Durango Acquisition | The Partnership | |||
Subsequent Event [Line Items] | |||
Consideration transferred | 765 | ||
Aggregate purchase price, cash paid | 315 | ||
Contingent liabilities | $ 75 | ||
Durango Acquisition | The Partnership | Class C Common Stock | To Be Issued At Closing | |||
Subsequent Event [Line Items] | |||
Equity interest issuable (in shares) | 3,800 | ||
Durango Acquisition | The Partnership | Class C Common Stock | To Be Issued on July 1, 2025 | |||
Subsequent Event [Line Items] | |||
Equity interest issuable (in shares) | 7,700 |