Kinetik Sells 16% Stake in GCX for $540M

Kinetik Holdings Inc. recently completed the sale of its 16% equity interest in Gulf Coast Express Pipeline LLC (GCX) for a total purchase price of $540 million. The sale resulted in net cash proceeds of $494.4 million for Kinetik. As a result of this transaction, the company has released unaudited pro forma condensed consolidated financial information, which gives insight into the impact of the sale on the company's financial position and results of operations.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2024, reflects the following changes due to the GCX Sale: Cash and cash equivalents increased to $500.4 million from $9.8 million Noncurrent assets decreased to $5.8 billion from $6.2 billion * Current liabilities increased to $234.3 million from $234,000

For the three months ended March 31, 2024, the unaudited pro forma condensed consolidated statement of operations shows the following adjustments due to the GCX Sale: Operating revenues remained the same at $341.4 million Operating costs and expenses remained the same at $315.3 million * Net income attributable to Class A Common Stock Shareholders decreased to $5.6 million from $11.6 million

For the year ended December 31, 2023, the unaudited pro forma condensed consolidated statement of operations reflects the following adjustments due to the GCX Sale: Operating revenues remained the same at $1.3 billion Operating costs and expenses remained the same at $1.1 billion * Net income attributable to Class A Common Stock Shareholders decreased to $288.9 million from $289.4 million

The pro forma financial information provides a clear picture of how the GCX Sale has affected Kinetik's financial position and results of operations. It shows a significant increase in cash and cash equivalents, a decrease in noncurrent assets, and changes in net income attributable to Class A Common Stock Shareholders.

The company's management has provided explanations for certain assumptions made in preparing the unaudited pro forma financial information, and it is important to consider that the actual financial position and results of operations may differ from the pro forma amounts due to various factors.

Following these announcements, the company's shares moved -0.1%, and are now trading at a price of $39.89. Check out the company's full 8-K submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

IN FOCUS