Kinetik Holdings Inc.KNTK

Kinetik Holdings Inc. Fair Value Disclosure

10-KFiled Feb 26, 20262 min read
FAIR VALUE MEASUREMENTS
The following tables present financial assets and liabilities that are measured at fair value on a recurring basis:
December 31, 2025
Level 1Level 2Level 3Total
(In thousands)
Commodity swaps
$— $15,369 $— $15,369 
Interest rate derivatives— 4 — 4 
Total assets$— $15,373 $— $15,373 
Commodity swaps$— $5,371 $— $5,371 
Interest rate derivatives— 135 — 135 
Total liabilities$— $5,506 $— $5,506 
December 31, 2024
Level 1Level 2Level 3Total
(In thousands)
Commodity swaps
$— $1,869 $— $1,869 
Interest rate derivatives— 504 — 504 
Total assets$— $2,373 $— $2,373 
Commodity swaps$— $10,742 $— $10,742 
Interest rate derivatives— 1,206 — 1,206 
Contingent liabilities$— $— $4,700 4,700 
Total liabilities$— $11,948 $4,700 $16,648 
Our derivative contracts consist of interest rate swaps and commodity swaps. The 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 13—Derivatives and Hedging Activities in the Notes to our Consolidated Financial Statements in this Annual Report for further discussion related to commodity swaps and interest rate swaps.
The Company recorded a contingent liability related to the Kings Landing Earnout using Level 3 inputs, including projected spending and completion probability of the project on the Durango Acquisition Date. The Kings Landing Earnout was settled during 2025 and had a zero balance as of December 31, 2025. Refer to Note 17—Commitments and Contingencies in the Notes to our Consolidated Financial Statements in this Annual Report for further discussion related to the Kings Landing Earnout contingent liability.
Long-term debt’s carrying value can vary from fair value. See Note 8—Debt and Financing Costs in the Notes to Consolidated Financial Statements in this Annual Report for further information. The carrying amounts reported on the 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 year ended December 31, 2025.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Mar 3, 2025
2023Mar 5, 2024
2022Mar 7, 2023
2021Feb 22, 2022
2020Feb 26, 2021
2019Mar 16, 2020
2017Mar 27, 2018

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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