Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
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, $0.0001 par value | |
Trading Symbol | KNTK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001692787 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 18,986,460 | |
Class C Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 47,260,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | |||
Operating revenues: | ||||
Revenue from contract with customer | [1] | $ 257,249 | $ 148,103 | |
Operating costs and expenses: | ||||
Costs of sales (exclusive of depreciation and amortization shown separately below) | [1] | 120,275 | 37,005 | |
Operating expenses | [1] | 29,871 | 15,564 | |
Ad valorem taxes | [1] | 4,153 | 2,351 | |
General and administrative expenses | [1] | 22,752 | 5,626 | |
Depreciation and amortization | [1] | 61,023 | 55,971 | |
Loss on disposal of assets | [1] | 110 | 32 | |
Total operating costs and expenses | [1] | 238,184 | 116,549 | |
Operating income | [1] | 19,065 | 31,554 | |
Other income (expense): | ||||
Interest and other income | [1] | 250 | 537 | |
Gain on redemption of mandatorily redeemable Preferred Units | [1] | 4,493 | 0 | |
Unrealized loss on embedded derivative | [1] | (2,886) | 0 | |
Interest expense | [1] | (26,774) | (25,310) | |
Equity in (earnings) losses from unconsolidated affiliate | [1] | 27,917 | 11,355 | |
Total other income (expense), net | [1] | 3,000 | (13,418) | |
Income before income taxes | [1] | 22,065 | 18,136 | |
Income tax expense | [1] | 676 | 0 | |
Net income including noncontrolling interest | [1] | 21,389 | 18,136 | |
Net income attributable to Preferred Unit limited partners | [1] | 4,993 | 0 | |
Net Income attributable to common shareholders | [1] | 16,396 | 18,136 | |
Net income attributable to Common Unit limited partners | 12,531 | [1] | 18,136 | |
Net income attributable to Class A Common Shareholders | [1] | $ 3,865 | $ 0 | |
Net income attributable to Class A Common Shareholders, per share | ||||
Basic (in USD per share) | [1] | $ 0.21 | $ 0 | |
Diluted (in USD per share) | [1] | $ 0.21 | $ 0 | |
Weighted average shares | ||||
Basic (in shares) | [1] | 18,696,000 | 0 | |
Diluted (in shares) | [1] | 18,713,000 | 0 | |
Service | ||||
Operating revenues: | ||||
Revenue from contract with customer | [1] | $ 80,445 | $ 67,662 | |
Product | ||||
Operating revenues: | ||||
Revenue from contract with customer | [1] | 174,928 | 79,993 | |
Other | ||||
Operating revenues: | ||||
Revenue from contract with customer | [1] | $ 1,876 | $ 448 | |
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 17,646 | $ 18,729 |
Accounts receivable, net of allowance for credit losses of $1,000 in 2022 and 2021 | 262,575 | 178,107 |
Derivative assets | 365 | 0 |
Prepaid and other current assets | 28,881 | 20,683 |
Total assets, current | 309,467 | 217,519 |
NONCURRENT ASSETS: | ||
Property, plant and equipment, net | 2,477,944 | 1,839,279 |
Intangible assets, net | 772,979 | 786,049 |
Derivative assets | 9,290 | 0 |
Operating lease right-of-use assets | 57,199 | 61,562 |
Deferred charges and other assets | 21,563 | 22,320 |
Investment in unconsolidated affiliates | 2,361,321 | 626,477 |
Goodwill | 3,894 | 0 |
Total assets, noncurrent | 5,704,190 | 3,335,687 |
Total assets | 6,013,657 | 3,553,206 |
CURRENT LIABILITIES: | ||
Accounts payable | 10,900 | 12,220 |
Accrued expenses | 210,355 | 135,643 |
Distribution payable to Preferred Unit limited partners | 6,937 | 0 |
Derivative liabilities | 7 | 2,667 |
Mandatorily redeemable Preferred Units | 67,173 | 0 |
Current portion of operating lease liabilities | 33,029 | 31,776 |
Current portion of long-term debt, net | 54,324 | 54,280 |
Other current liabilities | 5,912 | 4,339 |
Total current liabilities | 388,637 | 240,925 |
NONCURRENT LIABILITIES: | ||
Long-term debt, net | 2,894,025 | 2,253,422 |
Contingent liabilities | 839 | 839 |
Operating lease liabilities | 24,044 | 29,889 |
Contract liabilities | 22,342 | 11,674 |
Mandatorily redeemable Preferred Units | 68,897 | 0 |
Embedded derivative liabilities | 91,936 | 0 |
Derivative liabilities | 0 | 200 |
Deferred tax liabilities | 11,876 | 7,190 |
Other liabilities | 2,717 | 2,219 |
Total noncurrent liabilities | 3,116,676 | 2,305,433 |
Total liabilities | 3,505,313 | 2,546,358 |
COMMITMENTS AND CONTINGENCIES (Note 8) | ||
Redeemable noncontrolling interest — Common Unit limited partners | 3,185,431 | 1,006,843 |
Redeemable noncontrolling interest — Preferred Unit limited partners | 460,773 | 0 |
EQUITY: | ||
Accumulated deficit | (1,137,867) | 0 |
Total equity | (1,137,860) | 5 |
Total liabilities, noncontrolling interests, and equity | 6,013,657 | 3,553,206 |
Class A Common Stock | ||
EQUITY: | ||
Common stock | 2 | 0 |
Class C Common Stock | ||
EQUITY: | ||
Common stock | $ 5 | $ 5 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts receivable, allowance for credit losses | $ 1,000 | $ 1,000 |
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) | 18,986,460 | 0 |
Common stock, shares outstanding (in shares) | 18,986,460 | 0 |
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) | 47,260,000 | 50,000,000 |
Common stock, shares outstanding (in shares) | 47,260,000 | 50,000,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income including noncontrolling interests | [1] | $ 21,389 | $ 18,136 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization expense | [1] | 61,023 | 55,971 |
Amortization of deferred financing costs | 3,389 | 3,305 | |
Amortization of contract costs | 448 | 448 | |
Distributions from unconsolidated affiliates | 48,073 | 8,203 | |
Derivatives settlement | (884) | (1,465) | |
Derivatives fair value adjustment | (8,745) | 10,593 | |
Gain on redemption of mandatorily redeemable Preferred Units | (4,493) | 0 | |
Loss on disposal of assets | [1] | 110 | 32 |
Equity in (earnings) losses from unconsolidated affiliate | [1] | (27,917) | (11,355) |
Loss (gain) on debt extinguishment | 129 | (239) | |
Share-based compensation | 6,132 | 0 | |
Deferred income taxes | 676 | 0 | |
Change in operating assets and liabilities: | |||
Accounts receivable | (67,446) | (69,376) | |
Other assets | (456) | (9,653) | |
Operating lease right-of-use assets | 4,667 | 8,190 | |
Accounts payable | (6,766) | 8,525 | |
Accrued liabilities | 73,961 | 27,524 | |
Operating lease liabilities | (4,897) | (7,245) | |
Net cash provided by operating activities | 98,393 | 41,594 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Property, plant and equipment expenditures | (29,234) | (19,753) | |
Intangible assets expenditures | (3,559) | (782) | |
Investment in unconsolidated affiliates | 0 | (20,522) | |
Net cash acquired in acquisition | 13,401 | 0 | |
Net cash used in investing activities | (19,392) | (41,057) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from issuance of long-term debt | 0 | 30,189 | |
Principal payments on long-term debt | (26,382) | (12,443) | |
Proceeds from revolver | 7,000 | 11,500 | |
Redemption of mandatorily redeemable Preferred Units | (60,702) | 0 | |
Payments of deferred financing costs | 0 | (3,152) | |
Equity contributions | 0 | 14,890 | |
Equity distributions | 0 | (30,189) | |
Net cash (used in) provided by financing activities | (80,084) | 10,795 | |
Net change in cash | (1,083) | 11,332 | |
CASH, BEGINNING OF PERIOD | 18,729 | 19,591 | |
CASH, END OF PERIOD | 17,646 | 30,923 | |
SUPPLEMENTAL SCHEDULE OF INVESTING AND FINANCING ACTIVITIES | |||
Cash paid for interest, net of amounts capitalized | 25,801 | 27,044 | |
Property and equipment and intangible accruals in accounts payable and accrued liabilities | 14,340 | 3,410 | |
Restructuring Cost and Reserve [Line Items] | |||
Class A Common Stock issued in exchange | 1,013,745 | ||
Altus Midstream LP | |||
Restructuring Cost and Reserve [Line Items] | |||
Fair value of ALTM assets acquired | 2,445,665 | 0 | |
Class A Common Stock issued in exchange | 1,013,745 | 0 | |
ALTM liabilities and mezzanine equity assumed | $ 1,431,920 | $ 0 | |
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS - USD ($) $ in Thousands | Total | Preferred Unit limited partners | Apache limited partner | Class A Common Stock | Class C Common Stock | Common Stock | Common StockClass A Common Stock | Common StockClass C Common Stock | Additional Paid-in Capital | Accumulated Deficit | |||
Beginning balance at Dec. 31, 2020 | $ 0 | [1] | $ 1,041,660 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||
Contribution | 14,890 | ||||||||||||
Distribution paid to Common Unit limited partners | (30,189) | ||||||||||||
Net income | 18,136 | ||||||||||||
Ending Balance at Mar. 31, 2021 | 0 | [1] | 1,044,497 | ||||||||||
Beginning balance, shares (in shares) at Dec. 31, 2020 | 0 | 50,599,000 | |||||||||||
Beginning balance at Dec. 31, 2020 | $ 5 | $ 0 | $ 5 | $ 0 | $ 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Contribution (in shares) | 246,000 | ||||||||||||
Contribution | 0 | $ 0 | |||||||||||
Distribution paid to Common Unit limited partners (in shares) | (498,000) | ||||||||||||
Distribution paid to Common Unit limited partners | 0 | $ 0 | |||||||||||
Share-based compensation | 0 | $ 0 | |||||||||||
Net income (loss) | [2] | 0 | |||||||||||
Ending balance, shares (in shares) at Mar. 31, 2021 | 0 | 50,347,000 | |||||||||||
Ending balance at Mar. 31, 2021 | 5 | $ 0 | $ 5 | 0 | 0 | ||||||||
Beginning balance at Dec. 31, 2021 | 0 | [1] | 1,006,843 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||
ALTM acquisition | [1] | 462,717 | |||||||||||
Distributions payable to Preferred Unit limited partners | [1] | (6,937) | |||||||||||
Redemption of Common Units | (170,060) | ||||||||||||
Net income | 4,993 | [1] | 12,531 | ||||||||||
Change in redemption value of noncontrolling interests | 2,336,117 | ||||||||||||
Ending Balance at Mar. 31, 2022 | 460,773 | [1] | 3,185,431 | ||||||||||
Beginning balance, shares (in shares) at Dec. 31, 2021 | 0 | 50,000,000 | 50,000,000 | ||||||||||
Beginning balance at Dec. 31, 2021 | 5 | $ 0 | $ 5 | 0 | 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
ALTM acquisition (in shares) | 16,246,000 | ||||||||||||
ALTM acquisition | 1,013,745 | $ 2 | 1,013,743 | ||||||||||
Redemption of Common Units (in shares | 2,740,000 | 2,740,000 | 2,740,000 | ||||||||||
Redemption of Common Units | (170,060) | $ 0 | $ 0 | (170,060) | |||||||||
Share-based compensation | 6,132 | $ 6,100 | 6,132 | ||||||||||
Remeasurement of contingent consideration | 4,450 | 4,450 | |||||||||||
Net income (loss) | 3,865 | [2] | 3,865 | ||||||||||
Change in redemption value of noncontrolling interests | (2,336,117) | (1,194,385) | (1,141,732) | ||||||||||
Ending balance, shares (in shares) at Mar. 31, 2022 | 18,986,460 | 47,260,000 | 18,986,000 | 47,260,000 | |||||||||
Ending balance at Mar. 31, 2022 | $ (1,137,860) | $ 2 | $ 5 | 0 | (1,137,867) | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||
Distributions payable to Preferred Unit limited partners | (6,937) | ||||||||||||
Ending Balance at Mar. 31, 2022 | $ 460,773 | [1] | $ 3,185,431 | ||||||||||
Beginning balance, shares (in shares) at Feb. 22, 2022 | 66,200,000 | ||||||||||||
Ending balance, shares (in shares) at Mar. 31, 2022 | 18,986,460 | 47,260,000 | 18,986,000 | 47,260,000 | |||||||||
Ending balance at Mar. 31, 2022 | $ (1,137,860) | $ 2 | $ 5 | $ 0 | $ (1,137,867) | ||||||||
[1] | Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to the Condensed Consolidated Financial Statements. | ||||||||||||
[2] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
DESCRIPTION OF THE ORGANIZATION
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Transaction On February 22, 2022 (the “Closing Date”), Kinetik Holdings Inc., a Delaware corporation (formerly known as Altus Midstream Company), consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021 (the “Contribution Agreement”), by and among the Company, Altus Midstream LP (now known as Kinetik Holdings LP), a Delaware limited partnership and subsidiary of Altus Midstream Company (the “Partnership”), New BCP Raptor Holdco, LLC, a Delaware limited liability company (“Contributor”), and BCP Raptor Holdco, LP, a Delaware limited partnership (“BCP”). The transactions are referred to herein as the “Transaction.” Pursuant to the Contribution Agreement, in connection with the closing of the Transaction (the “Closing”), (i) Contributor contributed all of the equity interests of BCP and BCP Raptor Holdco GP, LLC, a Delaware limited liability company and the general partner of BCP (“BCP GP” and, together with BCP, the “Contributed Entities”), to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership (“Common Units”) and the Company issued 50,000,000 shares of the Company’s Class C common stock, par value $0.0001 per share (“Class C Common Stock”), to Contributor. The Company’s stockholders immediately prior to the Closing continued to hold their shares of the Company’s Class A Common Stock, par value $0.0001 per share (“Class A Common Stock,” and together with the Company’s Class C Common Stock, “Common Stock”). As a result of the Transaction, immediately following the Closing (i) Contributor held approximately 75% of the issued and outstanding Common Stock, (ii) Apache Midstream LLC, a Delaware limited liability company (“Apache Midstream”), held approximately 20% of the issued and outstanding Common Stock, and (iii) the Company’s remaining stockholders held approximately 5% of the issued and outstanding Common Stock. Following the Closing, there were approximately 66.2 million total shares of Common Stock outstanding. In connection with the Closing, the Company changed its name from “Altus Midstream Company” (ALTM) to “Kinetik Holdings Inc.” Unless the context otherwise requires, “ALTM” refers to the registrant prior to the Closing and “we,” “us,” “our,” and the “Company” refer to Kinetik Holdings Inc., the registrant and its subsidiaries following the Closing. Organization BCP was formed on April 25, 2017 as a Delaware limited partnership to acquire and develop midstream oil and gas assets. BCP’s primary operating subsidiaries are EagleClaw and CR Permian Holdings, LLC (“CR Permian”). Both subsidiaries were formed to design, engineer, install, own and operate facilities and provide services for produced natural gas gathering, compression, processing, treating and dehydration, and condensate separation, stabilization, and storage, crude oil gathering and storage, water gathering and disposal assets. ALTM was originally incorporated on December 12, 2016 in Delaware under the name Kayne Anderson Acquisition Corp. (“KAAC”) for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. KAAC completed its initial public offering in the second quarter of 2017. On August 3, 2018, Altus Midstream LP was formed in Delaware as a limited partnership and wholly-owned subsidiary of KAAC and entered into a contribution agreement with certain affiliates of Apache Corporation (“Apache” and such affiliates the “Altus Midstream Entities”), formed by Apache between May 2016 and January 2017, for the purpose of acquiring, developing, and operating midstream oil and gas assets in the Alpine High resource play and surrounding areas (“Alpine High”). On November 9, 2018, KAAC acquired all equity interests of the Altus Midstream Entities and changed its name to Altus Midstream Company. On February 22, 2022, upon the Closing, legacy BCP and its subsidiaries became wholly-owned subsidiaries of the legacy Altus Midstream Company. The Transaction was accounted for as a reverse merger pursuant to ASC 805 Business Combination (“ASC 805”) , refer to Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for an additional discussion. Nature of Operations Through its consolidated subsidiaries, the Company provides comprehensive gathering, 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 egress pipeline entities that have access to various markets along the Texas Gulf Coast. Basis of Presentation The accompanying unaudited 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 current year 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. All intercompany balances and transactions have been eliminated in consolidation. Prior to the Closing, the Company’s financial statements that were filed with the SEC were derived from ALTM’s accounting records. As the Transaction was determined to be a reverse merger, BCP was considered as the accounting acquirer and ALTM was the legal acquirer. The accompanying Condensed Consolidated Financial Statements herein include (1) BCP’s net assets carried at historical value, (2) BCP’s historical results of operations prior to the Transaction, (3) the ALTM’s net assets carried at fair value as of the Closing Date and (4) the combined results of operations with the Company’s results presented within the Condensed Consolidated Financial Statements from February 22, 2022 going forward. Refer to Note 2 — Business Combination to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion. Variable Interest Entity The Company uses a qualitative approach in assessing the consolidation requirement for variable interest entities. The approach focuses on identifying which enterprise has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. In the event that the Company is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity would be consolidated in our financial statements. The Company has determined that it has significant influence over the operating and financial policies of the four pipeline entities in which it is invested, but does not exercise control over them; and hence, it accounts for these investments using the equity method. Refer to Note 9—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. Redeemable Noncontrolling Interest — Common Units Limited Partners Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C common stock, par value $0.0001 per share, to Contributor. Please refer to the Transaction discussed above. The Common Units are redeemable at the option of unit holders and accounted for on the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity. The Company records the redeemable noncontrolling interest at the higher of (i) its initial value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the maximum redemption value as of the balance sheet date. The redemption value was determined based on a 5-day volume weighted average closing price of the Class A Common Stock. See discussion and additional details in Note 10—Equity and Warrant Redeemable Noncontrolling Interest — Preferred Unit Limited Partners The Partnership issued Series A Cumulative Redeemable Preferred Units (“Preferred Units”) on June 12, 2019. As the Transaction was accounted for as a reverse merger, the Company assumed certain Preferred Units that were issued and outstanding were assumed at Closing for accounting purposes. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. The Preferred Units are accounted for on the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units. Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value and are accounted for on the Company’s Condensed Consolidated Balance Sheet as a long-term liability embedded derivative. See discussion and additional detail in Note 11—Series A Cumulative Redeemable Preferred Units . Equity Method Investments The Company follows the equity method of accounting when it does not exercise control over its equity interests, but can exercise significant influence over the operating and financial policies of the entity. Under this method, the equity investments are carried originally at acquisition cost, increased by the Company’s proportionate share of the equity interest’s net income and contributions made, and decreased by the Company’s proportionate share of the equity interest’s net losses and distributions received. Please refer to Note 9—Equity Method Investments , for further details of the Company’s equity method investments. Equity method investments acquired in the Transaction were recorded at fair value upon Closing. See discussion and additional detail in Note 2—Business Combination for purchase price allocation of the Transaction. Use of Estimates Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its condensed financial statements, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include the valuation of derivatives, the valuation of tangible and intangible assets, the valuation of share-based compensation, the valuation of contingent liabilities, the valuation of mandatorily redeemable Preferred Units, and the valuation of noncontrolling interests. Inventory Other current assets include inventory that consists of condensate, and NGLs that are valued at the lower of cost or market. At the end of each reporting period, the Partnership assesses the carrying value of inventory and makes any adjustments necessary to reduce the carrying value to the applicable net realizable value. Inventory was valued at $4.8 million and $2.1 million as of March 31, 2022 and December 31, 2021, respectively. Impairment of Long-Lived Assets In accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 360, Property, Plant and Equipment, long-lived assets, excluding goodwill, to be held and used by the Company are reviewed for impairment annually or on an interim basis if events or circumstances indicate that the fair value of the assets have decreased below their carrying value. For long-lived assets to be held and used, the Company bases their evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. The Company’s management assesses whether there has been an impairment trigger, and if a trigger is identified, then the Company would perform an undiscounted cash flow test at the lowest level for which identifiable cash flows are independent of cash flows from other assets. If the sum of the undiscounted future net cash flows is less than the net book value of the property, an impairment loss is recognized for the excess, if any, of the property’s net book value over its estimated fair value. The Company did not recognize impairment losses for long-lived assets during the three months ended March 31, 2022 and 2021. Transactions with Affiliates The accounts receivable from or payable to affiliate represent the net result of the Company’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache and its subsidiaries, who held equity shares that represented approximately 13.6% of the Company’s voting power as of April 22, 2022. Accounts receivable from affiliate was $24.7 million as of March 31, 2022. For the three months ended March 31, 2022, revenue from affiliate was $15.6 million. Accrued expense due to affiliate was $4.2 million as of March 31, 2022 and operating expenses for the three months ended March 31, 2022 were immaterial. Net Income Per Share Basic net income per share is calculated by dividing net income attributable to Class A common shareholders by the weighted average number of shares of Class A Common Stock outstanding during the period. Class C Common Stock is excluded from the weighted average shares outstanding for the calculation of basic net income per share, as holders of Class C Common Stock are not entitled to any dividends or liquidating distributions. The Company uses the “if-converted method” to determine the potential dilutive effect of (i) an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) for shares of Class A Common Stock, (ii) an assumed exercise of the outstanding public and private warrants for shares of Class A Common Stock and (iii) an assumed exchange of the outstanding Preferred Units for shares of Class A Common Stock. The dilutive effect of any earn-out consideration payable in shares is only included in periods for which the underlying conditions for the issuance are met. Recently Adopted Accounting Pronouncement Effective January 1, 2022, the Company adopted ASU 2021-08 , Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers . Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value. With adoption of ASU 2021-08, the Company assumed contract liabilities at carrying value of $9.1 million upon Closing. Recent Accounting Pronouncement Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”) . ASU 2020-04 was issued to ease the potential accounting burden expected when global capital markets move away from the London Interbank Offered Rate (“LIBOR”), the benchmark interest rate banks use to make short-term loans to each other. The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationship, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the effect that ASU 2020-04 will have on its Consolidated Financial Statements. In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method (“ASU 2022-01”) . Current GAAP permits only prepayable financial assets and one or more beneficial interests secured by a portfolio of prepayable financial instruments to be included in a last-of-layer closed portfolio. The amendments in ASU 2022-01 allow nonprepayable financial assets also to be included in a closed portfolio hedged using the portfolio layer method. That expanded scope permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. The amendments in ASU 2022-01 also clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers as follows: (1) an entity is required to maintain basis adjustments in an existing hedge on a closed portfolio basis (that is, not allocated to individual assets), (2) an entity is required to immediately recognize and present the basis adjustment associated with the amount of the designated layer that was breached in interest income. In addition, an entity is required to disclose that amount and the circumstances that led to the breach, (3) an entity is required to disclose the total amount of the basis adjustments in existing hedges as a reconciling amount if other areas of GAAP require the disaggregated disclosure of the amortized cost basis of assets included in the closed portfolio, and (4) an entity is prohibited from considering basis adjustments in an existing hedge when determining credit losses. The guidance is effective for public business entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted the amendments in |
BUSINESS COMBINATION
BUSINESS COMBINATION | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C common stock, par value $0.0001 per share, to Contributor. Please refer to the “Transaction” discussed above. The Transaction was accounted for as a business combination in accordance with ASC 805, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. The Company also adopted ASU 2021-08, effective as of January 1, 2022, to record contract liabilities at their carrying value as of the acquisition date. Although the Company was the legal acquirer, BCP and BCP GP were determined to be the accounting acquirer and legal acquiree. As a result, BCP and its subsidiaries’ net assets were carried at historical value, acquired net assets were measured at fair value except contract liabilities being recorded at carrying value at the acquisition date, and results of operations of ALTM and its subsidiaries were included in the Company’s Condensed Consolidated Financial Statements from the Closing Date going forward. The preliminary purchase price allocation is based on an assessment of the fair value of the assets acquired and liabilities assumed in the acquisition using inputs that are not observable in the market and thus level 3 inputs. The fair value of the processing plant, gathering system and related facilities and equipment are based on market and cost approaches. The goodwill of $3.9 million relates to operational synergies. The value of the Preferred Units and assumed contingent liability was determined through a probability-weighted analysis of the expected future cash flows and other applicable valuation techniques. See additional details for Preferred Units in Note 11—Series A Cumulative Redeemable Preferred Units and contingent liabilities in Note 8 —Commitments and Contingencies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, valuation of the underlying assets of the equity method investments and liabilities assumed. However, the Company is continuing its review of these matters during the measurement period, and if new information obtained about facts and circumstances that existed at the acquisition date identifies adjustments to the liabilities initially recognized, as well as any additional liabilities that existed at the acquisition date, the acquisition accounting will be revised to reflect the resulting adjustments to the provisional amounts initially recognized. The Company will finalize the purchase price allocation during the 12-month period following the acquisition date. The following table summarizes the preliminary estimated fair value of assets acquired and liabilities assumed in the Transaction in accordance with ASC 805: (In thousands) Amount Cash and cash equivalent $ 13,401 Accounts receivable 1,341 Accounts receivable - affiliates 15,681 Property, plant, and equipment, net 634,923 Intangible assets, net 13,200 Investments in unconsolidated affiliates 1,755,000 Prepaid expense and other assets 8,225 Goodwill 3,894 Total assets acquired 2,445,665 Accrued expenses and other accrued liabilities 4,923 Long-term debt 657,000 Embedded derivative liabilities 89,050 Contract liabilities 9,102 Mandatory redeemable Preferred Units 200,667 Deferred tax liabilities 4,010 Contingent liabilities 4,451 Total liabilities assumed 969,203 Redeemable noncontrolling interest - Preferred Unit limited partners 462,717 Total consideration transferred $ 1,013,745 The Company incurred acquisition-related costs of $5.7 million for the three months ended March 31, 2022. During the quarter ended March 31, 2022, the Company assumed additional revolver liabilities through the Transaction. There was no significant modification to the Company’s debt structure. Supplemental Pro Forma Information The unaudited supplemental pro forma financial for informational purposes only and is not indicative of future results. The results below for the three months ended March 31, 2022 and 2021 combine the results of the Company and the Partnership, giving effect to the Transaction as if it had been completed on January 1, 2021. Three Months Ended March 31, 2022 2021 (In thousands) Pro forma Pro forma Revenues $ 284,102 $ 182,249 Net income including noncontrolling interest $ 13,468 $ 16,802 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022 2021 (In thousands) Gathering and processing services $ 80,445 $ 67,662 Natural gas, NGLs and condensate sales 174,928 79,993 Other revenue 1,876 448 Total revenues and other $ 257,249 $ 148,103 There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2022 and 2021. Contracts with customers acquired through the Transaction had similar structure as the Company’s existing contracts with customers. The Company recognized revenues from MVC deficiency payments of nil and $2.5 million for the three months ended March 31, 2022 and 2021, respectively. Remaining Performance Obligations The following table presents our estimated revenue from contracts with customers for remaining performance obligations that has not yet been recognized, representing our contractually committed revenues as of March 31, 2022: Amount Fiscal Year (In thousands) Remaining of 2022 $ 10,179 2023 11,626 2024 8,102 2025 6,227 2026 5,066 Thereafter 72,952 $ 114,152 Our contractually committed revenue, for purposes of the tabular presentation above, is generally limited to customer contracts that have fixed pricing and fixed volume terms and conditions, generally 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, 2022: Amount (In thousands) Balance as of January 1, 2022 $ 14,756 Reclassification of beginning contract liabilities to revenue as a result of performance obligation being satisfied (1,328) Cash received and not recognized as revenue 13,908 Balance as of March 31, 2022 27,336 Less: Current portion 4,994 Non-current portion $ 22,342 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 that would not have been incurred if the contract had not been obtained. These costs are recovered through the net cash flows of the associated contract. As of March 31, 2022 and December 31, 2021, the Company had contract acquisition cost assets of $17.9 million and $18.4 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 contract. For the three months ended March 31, 2022 and 2021, the Company recognized cost of sales associated with these assets of $0.4 million and $0.4 million, respectively. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are carried at cost or fair market value at the date of acquisition less accumulated depreciation. The cost basis of constructed assets includes materials, labor, and other direct costs. Major improvements or betterment are capitalized, while repairs that do not improve the life of the respective assets are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets as follows: Estimated Useful Life Buildings 30 years Gathering, processing and transmission systems and facilities 20 years Furniture and fixtures 7 years Vehicles 5 years Computer hardware and software 3 years Property, plant and equipment, at carrying value, is as follows: March 31, December 31, 2022 2021 (In thousands) Gathering, processing and transmission systems and facilities $ 2,770,137 $ 2,121,434 Vehicles 7,055 6,090 Computers and equipment 4,492 4,271 Less: accumulated depreciation (367,629) (337,030) Total depreciable assets, net 2,414,055 1,794,765 Construction in progress 44,142 24,888 Land 19,747 19,626 Total property, plant and equipment, net $ 2,477,944 $ 1,839,279 The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated. These amounts represent property that is not yet available to be placed into productive service as of the respective reporting date. The Company recorded $30.8 million and $25.6 million of depreciation expense for the three months ended March 31, 2022 and 2021, respectively. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The Company closed a business combination transaction on February 22, 2022, refer to the Transaction in Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. The Transaction was accounted for as business combination pursuant to ASC 805 Business Combination (“ASC 805”) . In connection with the Transaction, the Company recorded excess of the purchase price over net assets acquired as goodwill. The Company recorded goodwill of $3.9 million upon Closing and as of March 31, 2022. Goodwill is tested at least annually as of December 31 of each year, or more frequently as events occur or circumstances change that would more-likely-than-not reduce fair value of a reporting unit below its carrying value. Company’s management assesses whether there has been event or circumstance that triggers the fair value of the reporting unit to be lower than its net carrying value since consummation of the Transaction, and concluded that goodwill was not impaired as of March 31, 2022. Intangible Assets Intangible assets, net are comprised of the following: March 31, December 31, 2022 2021 (In thousands) Customer contracts $ 1,135,963 $ 1,135,963 Right of way assets 116,471 99,345 Less accumulated amortization (479,455) (449,259) Total amortizable intangible assets, net $ 772,979 $ 786,049 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 range from one The Company recorded $30.2 million and $30.4 million of amortization expense for the three months ended March 31, 2022 and 2021, respectively. There was no impairment recognized on intangible assets for the three months ended March 31, 2022 and 2021. |
DEBT AND FINANCING COSTS
DEBT AND FINANCING COSTS | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT AND FINANCING COSTS | DEBT AND FINANCING COSTS During the quarter ended March 31, 2022, the Company assumed additional revolver liabilities through the Transaction closed in February 2022. There was no significant modification to the Company’s debt structure. 2017 Credit Facility - BCP 1 On June 22, 2017, BCP Raptor, LLC (“BCP I”), a wholly owned subsidiary of BCP and the parent of EagleClaw Midstream Ventures, LLC (“EagleClaw”), entered into a credit agreement with its lenders and with Jefferies Finance LLC, as administrative agent, for a term loan in and initial aggregate principal amount of $1.25 billion with a tenor of seven years, maturing on June 22, 2024. Fixed principal payments equal to 0.25% of the initial principal amount are required to be paid quarterly. Interest is paid on the term loan periodically at a rate equal to 4.25% plus LIBOR subject to a floor of 1.0%. The Company paid scheduled principal payments on this term loan of $3.1 million for the three months ended March 31, 2022 and 2021. BCP I repurchased $2.9 million of the outstanding term loan during the first quarter of 2021. No repurchase was made for this term loan during the first quarter of 2022. In addition, contemporaneously with the credit agreement described above, BCP I entered into a super-priority revolving credit agreement with its lenders and with Jefferies Finance LLC, as administrative agent, in an initial aggregate principal amount of $100.0 million with a tenor of five years, maturing on June 22, 2022. On January 16, 2020, BCP I entered into an amendment to the revolving credit agreement that increased the revolving commitment in an aggregate principal amount of $25.0 million, thereby increasing the aggregate revolving credit commitments of all lenders to $125 million. On January 4, 2021, BCP I entered into an amendment to extend the maturity date from June 22, 2022 to November 3, 2023. Interest is paid on the revolver periodically at a rate equal to LIBOR (0% floor) plus 4.00%, which decreases to LIBOR (0% floor) plus 3.75% when BCP I’s consolidated net leverage ratio is no greater than 4.50 to 1.00. BCP I must pay commitment fees quarterly in an amount equal to 0.50% per annum, which decreases to 0.375% per annum when BCP I’s consolidated net leverage is no greater than 4.50 to 1.00, in each case on the unused portion of the commitment. As of March 31, 2022 and December 31, 2021, there were $59.0 million and $52.0 million in outstanding borrowings under the revolving credit facility, respectively. 2018 Credit Facilities - BCP II and Partnership In November 2018, the Partnership entered into a revolving credit facility for general corporate purposes that matures in November 2023 (subject to two, one year extension options) (“Corporate Facility”). The agreement for this revolving credit facility provides aggregate commitments from a syndicate of banks of $800.0 million. The aggregate commitments include a letter of credit subfacility of up to $100.0 million and a swingline loan subfacility of up to $100.0 million. The Partnership may increase commitments up to an aggregate $1.5 billion by adding new lenders or obtaining the consent of any increasing existing lenders. As of March 31, 2022, there were $657.0 million of borrowings and $2.0 million of letters of credit outstanding under this facility. At the Partnership’s option, the interest rate per annum for borrowings under this facility is either a base rate, as defined, plus a margin, or LIBOR, plus a margin. The Partnership also pays quarterly a facility fee at a rate per annum on total commitments. At March 31, 2022, the base rate margin was 0.05%, the LIBOR margin was 1.05%, and the facility fee was 0.20%. In addition, a commission is payable quarterly to the lenders on the face amount of each outstanding letter of credit at a per annum rate equal to the LIBOR margin then in effect. Contemporaneous with the close of the CR Permian acquisition on November 1, 2018, BCP Raptor II, LLC (“BCP II”), a wholly owned subsidiary of BCP and the parent of CR Permian, entered into a credit agreement with its lenders and with Barclays Bank PLC, as administrative agent, for a term loan in an initial aggregate principal amount of $690.0 million with a tenor of seven years, maturing on November 3, 2025. Fixed principal payments equal to 0.25% of the initial principal amount are required to be paid quarterly. Interest is paid on the term loan periodically at a rate equal to 4.75% plus LIBOR (0% floor). BCP II paid scheduled principal payments on this term loan of $1.7 million for the three months ended March 31, 2022 and 2021. Additionally, during the three months ended March 31, 2022, BCP II voluntarily repurchased $9.9 million of the outstanding term on the open market. Similar open market repurchases totaling $4.7 million were made during the three months ended March 31, 2021. In addition, BCP II entered into a revolving credit facility in an initial aggregate principal amount of $50.0 million with a tenor of five years, maturing on November 3, 2023. On January 16, 2020, BCP II entered into an amendment to the revolving credit agreement that increased the revolving commitment in an aggregate principal amount of $10.0 million, thereby increasing the aggregate revolving credit commitments of all lenders to $60.0 million. Interest is paid on the revolver periodically at a rate equal to LIBOR plus the applicable margin of 4.50% subject to change based on our consolidated total leverage ratio. Any unpaid interest and principal are due at maturity. BCP II also pays quarterly commitment fees of 0.50% on the unused portion of the commitment. As of March 31, 2022 and December 31, 2021, there were no outstanding letters of credit under the revolving credit facility. 2019 Credit Facility - BCP PHP On September 18, 2019, BCP PHP, LLC (“BCP PHP”), a wholly owned subsidiary of BCP and the owner of a 26.67% interest in the Permian Highway Pipeline (“PHP”), entered into a credit agreement with its lenders for a term facility with an initial term commitment of $483.0 million and a conversion date term commitment of $30.2 million and a letter of credit facility up to $32.4 million. The maturity of the associated debt is due March 3, 2025 in accordance with the credit agreement. During the three months ended March 31, 2022 and 2021, BCP PHP paid its principal payments on this term loan totaling $11.6 million and nil, respectively. Fixed principal payments are required to be paid quarterly commencing with the first full quarter ending after the term conversion date, which was June 30, 2021. Interest is paid on the outstanding borrowings monthly at a rate equal to 1.625% plus adjusted LIBOR (subject to a 1% floor) for four years after the closing date and at a rate equal to 1.875% plus adjusted LIBOR (subject to a 1% floor) thereafter. BCP PHP must also pay quarterly commitment fees of 35% of the applicable margin then in effect on the undrawn portion of the available commitments. As of March 31, 2022 and 2021, there were no outstanding letters of credit. Our debt agreements contain various covenants or restriction provisions that, amongst other things limit or restrict the applicable subsidiary’s ability to incur certain liens on assets, property or revenue, engage in certain mergers, dissolutions, investments or acquisitions, incur indebtedness or guarantee debt, make certain dispositions, and enter into certain transactions with subsidiaries or affiliates that exceed a specified threshold. These agreements also contain defined financial covenants, including a debt service coverage ratio. As of March 31, 2022 and December 31, 2021, each applicable subsidiary was in compliance with all loan covenants. The fair value of the Company and its subsidiaries’ consolidated debt as of March 31, 2022 and December 31, 2021 was $2.98 billion and $2.34 billion, respectively. The carrying value of that debt was $2.98 billion and $2.35 billion, as of March 31, 2022 and December 31, 2021, respectively. All of the debt, except the Corporate Facility, is non-recourse to the Company and its assets, except its respective obligor (and associated subsidiaries) BCP I, BCP II and BCP PHP, as the case may be. The following table summarizes the Company’s debt obligations as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 (In thousands) $1.25 billion term loan (BCP I) $ 1,172,292 $ 1,175,417 $690 million term loan (BCP II) 627,695 639,393 $513 million term loan (BCP PHP) 467,762 479,377 $800 million revolving line of credit (Partnership) 657,000 — $125 million revolving line of credit (BCP I) 59,000 52,000 Total Long-term debt 2,983,749 2,346,187 Less: Deferred financing costs, net (35,400) (38,485) 2,948,349 2,307,702 Less: Current portion, net (54,324) (54,280) Long-term portion of debt and finance lease obligations, net $ 2,894,025 $ 2,253,422 The table below presents the components of the Company’s financing costs, net of capitalized interest: Three Months Ended March 31, 2022 2021 (In thousands) Capitalized interest $ 104 $ 211 Deferred financing costs 3,389 3,305 Interest expense 23,281 21,794 Total financing costs, net of capitalized interest $ 26,774 $ 25,310 As of March 31, 2022 and December 31, 2021, deferred financing costs associated with the three term loans were $35.4 million and $38.5 million, respectively. Deferred financing costs associated with the revolvers were $1.9 million as of March 31, 2022 and $2.2 million as of December 31, 2021. The amortization of the deferred financing costs was charged to interest expense for the periods presented. The amount of deferred financing costs included in interest expense for the three months ended March 31, 2022 and 2021 was $3.4 million and $3.3 million, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES The following table provides detail of the Company’s accrued expenses at March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 (In thousands) Accrued product purchases $ 168,324 $ 118,364 Accrued taxes 7,282 4,299 Accrued salaries, vacation, and related benefits 3,657 2,113 Accrued capital expenditures 4,608 2,995 Accrued interest expenses 7,777 — Accrued expense due to related party 4,247 — Accrued other expenses 14,460 7,872 Total accrued expenses $ 210,355 $ 135,643 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022 and December 31, 2021, there were no accruals for loss contingencies. Litigation The Company is a party to various legal actions arising in the ordinary course of its businesses. In accordance with 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. Thus, the Company’s exposure and ultimate losses may be higher, and possibly significantly more, than the amounts accrued. The Company has entered into litigation with two third parties to collect outstanding receivables totaling $19.7 million that 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. Contingent Liabilities As part of the acquisition of Permian Gas on June 11, 2019, consideration included a contingent liability arrangement with PDC. The arrangement requires additional monies to be paid by the Company to PDC on a per Mcf basis if the actual annual Mcf volume amounts exceed forecasted annual Mcf volume amounts starting in 2020 and continuing through 2029. The arrangement defines the incentive rate per Mcf for each qualifying year and the total monies paid under this arrangement are capped at $60.5 million. Amounts are payable on an annual basis over the earn-out period. The fair value of the contingent liability recognized on the acquisition date of $3.9 million was estimated utilizing the following key assumptions: (1) present value factors based on the Company’s weighted-average cost of capital, 2) a probability weighted payout based on an estimate of future volumes and (3) a discount period consistent with the arrangement’s life and the respective due dates of the potential future payments. Based on current forecasts and discussions with PDC, management revalued this contingent liability with updated assumptions at each reporting period. As of March 31, 2022 and December 31, 2021, the estimated fair value of the contingent consideration liability was $0.8 million and $0.8 million, respectively. As part of the Transaction, the Company assumed contingent liabilities of $4.5 million related to earn-out consideration of up to 1,250,000 shares of Class A Common Stock as follows: • 625,000 shares if the per share closing price of the Class A Common Stock as reported by Nasdaq during any 30-trading-day period ending prior to November 9, 2023 is equal to or greater than $280.00 for any 20 trading days within such 30-trading-day period. • 625,000 shares if the per share closing price of the Class A Common Stock as reported by Nasdaq during any 30-trading-day period ending prior to November 9, 2023 is equal to or greater than $320.00 for any 20 trading days within such 30-trading-day period. Pursuant to ASC 805, this earn-out consideration was a pre-existing contingency and accounted for as an assumed liability to the acquirer on acquisition date. Immediately subsequent to the Closing, the Company evaluated the earn-out consideration classification in accordance with ASC 480—Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815—Derivatives and Hedging (“ASC 815”). The Company determined the earn-out consideration to be classified as an equity based on the settlement provision. Environmental Matters As an owner of infrastructure assets and with rights to surface lands, the Company is subject to various local and federal laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the Company for the cost of pollution clean-up resulting from operations and subject the Company to liability for pollution damages. The Company is not aware of any environmental claims existing as of March 31, 2022, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS As of March 31, 2022, 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 equity method investment (“EMIs” or “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 2022 2021 (In thousands) Gulf Coast Express Pipeline LLC 16.0% $ 465,028 $ — Permian Highway Pipeline LLC (1) 53.3% 1,426,736 626,477 Breviloba, LLC (Shin Oak) 33.0% 469,557 — $ 2,361,321 $ 626,477 (1) Ownership for Permian Highway Pipeline LLC was 53.3% and 26.7% as of March 31, 2022 and December 31, 2021, respectively. Additionally, as of March 31, 2022, the Company owned 15.0% of Epic Crude Holdings, LP (“EPIC”). However, no dollar value was assigned through the purchase price allocation as adjustment was made to eliminate equity in losses of EPIC. No additional contribution was made to EPIC and no distribution or equity income was received from EPIC during the three months ended March 31, 2022. As of March 31, 2022, the unamortized basis differences included in the EMI pipelines balances were $418.3 million. There was no unamortized basis difference as of December 31, 2021. 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. There was capitalized interest of $12.3 million and $12.8 million as of March 31, 2022 and December 31, 2021, 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, 2022: Gulf Coast Express Pipeline LLC Permian Highway Pipeline LLC Breviloba, LLC Total (2) (In thousands) Balance at December 31, 2021 $ — $ 626,477 $ — $ 626,477 Acquisitions 470,000 815,000 470,000 1,755,000 Distributions (8,412) (35,998) (3,663) (48,073) Equity income, net (1) 3,440 21,257 3,220 27,917 Balance at March 31, 2022 $ 465,028 $ 1,426,736 $ 469,557 $ 2,361,321 (1) Net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $0.8 million from Gulf Cost Express, $1.3 million from Permian Highway Pipeline LLC and $0.1 million from Breviloba. (2) The EMIs acquired in the Transaction are included in the results from February 22, 2022 to March 31, 2022, and this is also the case for the additional 26.67% of PHP that was acquired in the Transaction. The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation . Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s financial statement consolidations. Summarized Financial Information The following table represents selected income statement data for the Company’s EMI pipelines (on a 100 percent basis) for the three months ended March 31, 2022. Three Months Ended March 31, 2022 2021 Gulf Coast Express Pipeline LLC Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC (1) Permian Highway Pipeline LLC (1) Breviloba, LLC (1) (In thousands) Revenues $ 89,973 $ 97,856 $ 48,521 $ 88,369 $ 97,848 $ 34,529 Operating income 63,443 59,476 26,314 60,108 42,580 17,300 Net income 63,529 59,213 26,366 59,768 42,580 17,359 (1) For the three months ended March 31, 2021, the Company only had equity interest in Permian Highway Pipeline LLC. |
EQUITY AND WARRANTS
EQUITY AND WARRANTS | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
EQUITY AND WARRANTS | EQUITY AND WARRANTS Redeemable Noncontrolling Interest — Common Unit Limited Partners On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C common stock, par value $0.0001 per share, to Contributor. Please refer to the “Transaction” discussed above. The redemption option of the Common Unit is not legally detachable or separately exercisable from the instrument and is non-transferable, and 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 Sheet. During the three months ended March 31, 2022, 2,740,000 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 47,260,000 Common Units and an equal number of Class C Common Stock issued and outstanding as of March 31, 2022. The Common Units fair value was approximately $3.19 billion as of March 31, 2022. Redeemable Noncontrolling Interest — Preferred Unit Limited Partners Upon Closing, the Company assumed certain Preferred Units that were issued and outstanding on acquisition date. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. Refer to Note 11—Series A Cumulative Redeemable Preferred Units for further discussion. Public Warrants As of March 31, 2022 there were 12,577,350 Public Warrants (as defined below) outstanding. Each whole public warrant entitles the holder to purchase one twentieth of a share of Class A Common Stock at a price of $230.00 per share (the “Public Warrants”). The Public Warrants will expire on November 9, 2023 or upon redemption or liquidation. The Company may call the Public Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant with not less than 30 days’ notice provided to the Public Warrant holders. However, this redemption right can only be exercised if the reported last sale price of the Class A Common Stock equals or exceeds $360.00 per share for any 20-trading days within a 30-trading day period ending three business days prior to sending the notice of redemption to the Public Warrant holders. Private Placement Warrants As of March 31, 2022, there were 6,364,281 Private Placement Warrants (as defined below) outstanding, of which Apache holds 3,182,140. The private placement warrants will expire on November 9, 2023 and are identical to the Public Warrants discussed above, except (i) they will not be redeemable by the Company so long as they are held by the initial holders or their respective permitted transferees and (ii) they may be exercised by the holders on a cashless basis (the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”). The Company recorded a fair value of $0.1 million for the Public Warrants and a fair value of $0.1 million for the Private Warrants as of March 31, 2022 on the Condensed Consolidated Balance Sheet in other non-current liabilities. Refer to Note 15—Fair Value Measurement in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding valuation of the Warrants. Dividend On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with selected parties including Blackstone, I Squared Capital, Management and Apache (“Reinvestment Holder”). The Reinvestment Agreement obligates each Reinvestment Holder to reinvest in shares of Class A Common Stock at least 20% of all distributions on Common Units or dividends on shares of Class A Common Stock held by such Reinvestment Holder. On February 22, 2022, the Audit Committee and subsequently the Board approved that for the calendar year 2022, 100% of all distributions or dividends received by the Reinvestment Holders would be reinvested in newly issued Class A shares. On April 4, 2022, the Company filed a Registration Statement on Form S-3 related to the Reinvestment Agreement and the establishment of the Dividend and Distribution Reinvestment Plan (the “Plan”) for all other holders. Refer to Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional details. On April 20, 2022, the Company’s Board of Directors (the “Board”) declared a cash dividend of $1.50 per share on the Company’s Class A Common Stock, which will be payable to stockholders on May 17, 2022. The Company, through its ownership of the general partner of the Partnership, also declared a distribution of $1.50 per Common Unit from the Partnership to the holders of Common Units. 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.” The Company anticipates 7.8 million of the Class A and Class C shares will receive a cash dividend with the balance receiving additional Class A shares under the Reinvestment Agreement (defined above). Prior to the merger close date, the Partnership had 625,000 Preferred Units issued and outstanding. Immediately prior to the Closing, on February 22, 2022, the Partnership redeemed for cash, 100,000 Preferred Units in an amount equal to approximately $120.1 million. The Company assumed the remaining 525,000 Preferred Units as well as 29,983 paid-in-kind (“PIK”) Preferred Units that were issued and outstanding at the close of the acquisition. 150,000 of these Preferred Units and a pro rata amount of the PIK units contain a mandatory redemption feature as further discussed below. Mandatorily Redeemable Preferred Units At the close of the Transaction, the Company effectuated the Third Amended and Restated Agreement of Limited Partnership of the Partnership (“Partnership LPA”), which among other things, provides for mandatory pro-rata redemptions by the Partnership of 50,000 Preferred Units at or prior to each of the six-, twelve- and eighteen-month anniversaries of the effectiveness of the Partnership LPA, for an aggregate of 150,000 Preferred Units over the eighteen-month period. Given this mandatory redemption feature and pursuant to ASC 480 , liability classification is required for these 150,000 Preferred Units and the pro rata PIK units. The Company values the liability as of each reporting date and records the change in valuation in the “Other income (expenses)” in the Condensed Consolidated Statements of Operations. The Partnership consummated the first of such redemptions redeeming 50,000 units along with 2,856 PIK units on March 28, 2022 for an aggregate amount equal to $60.7 million. For the remaining 100,000 Preferred Units that contain the mandatory redemption feature, the Company recorded $67.2 million and $68.9 million in current and noncurrent liabilities, respectively, as of March 31, 2022. These 100,000 Preferred Units must be redeemed in 50,000 unit increments by February 22, 2023 and August 22, 2023, respectively. The Partnership LPA also provides the Partnership with an option to redeem Preferred Units early so long as at least 25,000 Preferred Units are redeemed in each redemption, without any dollar-value threshold. Redeemable Noncontrolling Interest Preferred Units The remaining 375,000 Preferred Units assumed on the Closing Date do not contain a mandatory redemption feature, and are accounted for on the Company’s Condensed Consolidated Balance Sheets as a redeemable noncontrolling interest classified as temporary equity in accordance with the terms of the Preferred Units, including the redemption rights with respect thereto. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. The Company applies a two-step approach to measure the redeemable noncontrolling interest related to the Preferred Units, by first allocating a portion of the Company’s net income in accordance with the terms of the Partnership LPA. After consideration of the foregoing, the Company records an additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end, if applicable. The amount of such adjustment is determined based upon the accreted value method to reflect the passage of time until the Preferred Units are exchangeable at the option of the holder. Pursuant to this method, the net transaction price is accreted using the effective interest method, to the Series A Redemption Price (as defined in the Partnership LPA) calculated at the seventh anniversary of the closing of the Preferred Unit Offering. The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price. Activities related to Preferred Units for the three months ended March 31, 2022 are as follows: Units Outstanding Amount (3) (In thousands, except for unit data) Redeemable noncontrolling interest — Preferred Units, immediately upon Closing Date of Transaction (1) 396,417 $ 462,717 Distribution payable to Preferred Unit limited partners — (6,937) Allocation of net income — 4,993 Redeemable noncontrolling interest — Preferred Units, as of March 31, 2022 396,417 460,773 Embedded derivative liability (2) 91,936 $ 552,709 (1) Included 21,417 PIK units on a pro rata basis. (2) Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. Refer to Note 15—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period. (3) As of March 31, 2022, the Redemption Price would have been based on an 11.1% percent internal rate of return, which would equate to a redemption value of $700.0 million. |
SERIES A CUMULATIVE REDEEMABLE
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS | EQUITY AND WARRANTS Redeemable Noncontrolling Interest — Common Unit Limited Partners On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C common stock, par value $0.0001 per share, to Contributor. Please refer to the “Transaction” discussed above. The redemption option of the Common Unit is not legally detachable or separately exercisable from the instrument and is non-transferable, and 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 Sheet. During the three months ended March 31, 2022, 2,740,000 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 47,260,000 Common Units and an equal number of Class C Common Stock issued and outstanding as of March 31, 2022. The Common Units fair value was approximately $3.19 billion as of March 31, 2022. Redeemable Noncontrolling Interest — Preferred Unit Limited Partners Upon Closing, the Company assumed certain Preferred Units that were issued and outstanding on acquisition date. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. Refer to Note 11—Series A Cumulative Redeemable Preferred Units for further discussion. Public Warrants As of March 31, 2022 there were 12,577,350 Public Warrants (as defined below) outstanding. Each whole public warrant entitles the holder to purchase one twentieth of a share of Class A Common Stock at a price of $230.00 per share (the “Public Warrants”). The Public Warrants will expire on November 9, 2023 or upon redemption or liquidation. The Company may call the Public Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant with not less than 30 days’ notice provided to the Public Warrant holders. However, this redemption right can only be exercised if the reported last sale price of the Class A Common Stock equals or exceeds $360.00 per share for any 20-trading days within a 30-trading day period ending three business days prior to sending the notice of redemption to the Public Warrant holders. Private Placement Warrants As of March 31, 2022, there were 6,364,281 Private Placement Warrants (as defined below) outstanding, of which Apache holds 3,182,140. The private placement warrants will expire on November 9, 2023 and are identical to the Public Warrants discussed above, except (i) they will not be redeemable by the Company so long as they are held by the initial holders or their respective permitted transferees and (ii) they may be exercised by the holders on a cashless basis (the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”). The Company recorded a fair value of $0.1 million for the Public Warrants and a fair value of $0.1 million for the Private Warrants as of March 31, 2022 on the Condensed Consolidated Balance Sheet in other non-current liabilities. Refer to Note 15—Fair Value Measurement in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding valuation of the Warrants. Dividend On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with selected parties including Blackstone, I Squared Capital, Management and Apache (“Reinvestment Holder”). The Reinvestment Agreement obligates each Reinvestment Holder to reinvest in shares of Class A Common Stock at least 20% of all distributions on Common Units or dividends on shares of Class A Common Stock held by such Reinvestment Holder. On February 22, 2022, the Audit Committee and subsequently the Board approved that for the calendar year 2022, 100% of all distributions or dividends received by the Reinvestment Holders would be reinvested in newly issued Class A shares. On April 4, 2022, the Company filed a Registration Statement on Form S-3 related to the Reinvestment Agreement and the establishment of the Dividend and Distribution Reinvestment Plan (the “Plan”) for all other holders. Refer to Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional details. On April 20, 2022, the Company’s Board of Directors (the “Board”) declared a cash dividend of $1.50 per share on the Company’s Class A Common Stock, which will be payable to stockholders on May 17, 2022. The Company, through its ownership of the general partner of the Partnership, also declared a distribution of $1.50 per Common Unit from the Partnership to the holders of Common Units. 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.” The Company anticipates 7.8 million of the Class A and Class C shares will receive a cash dividend with the balance receiving additional Class A shares under the Reinvestment Agreement (defined above). Prior to the merger close date, the Partnership had 625,000 Preferred Units issued and outstanding. Immediately prior to the Closing, on February 22, 2022, the Partnership redeemed for cash, 100,000 Preferred Units in an amount equal to approximately $120.1 million. The Company assumed the remaining 525,000 Preferred Units as well as 29,983 paid-in-kind (“PIK”) Preferred Units that were issued and outstanding at the close of the acquisition. 150,000 of these Preferred Units and a pro rata amount of the PIK units contain a mandatory redemption feature as further discussed below. Mandatorily Redeemable Preferred Units At the close of the Transaction, the Company effectuated the Third Amended and Restated Agreement of Limited Partnership of the Partnership (“Partnership LPA”), which among other things, provides for mandatory pro-rata redemptions by the Partnership of 50,000 Preferred Units at or prior to each of the six-, twelve- and eighteen-month anniversaries of the effectiveness of the Partnership LPA, for an aggregate of 150,000 Preferred Units over the eighteen-month period. Given this mandatory redemption feature and pursuant to ASC 480 , liability classification is required for these 150,000 Preferred Units and the pro rata PIK units. The Company values the liability as of each reporting date and records the change in valuation in the “Other income (expenses)” in the Condensed Consolidated Statements of Operations. The Partnership consummated the first of such redemptions redeeming 50,000 units along with 2,856 PIK units on March 28, 2022 for an aggregate amount equal to $60.7 million. For the remaining 100,000 Preferred Units that contain the mandatory redemption feature, the Company recorded $67.2 million and $68.9 million in current and noncurrent liabilities, respectively, as of March 31, 2022. These 100,000 Preferred Units must be redeemed in 50,000 unit increments by February 22, 2023 and August 22, 2023, respectively. The Partnership LPA also provides the Partnership with an option to redeem Preferred Units early so long as at least 25,000 Preferred Units are redeemed in each redemption, without any dollar-value threshold. Redeemable Noncontrolling Interest Preferred Units The remaining 375,000 Preferred Units assumed on the Closing Date do not contain a mandatory redemption feature, and are accounted for on the Company’s Condensed Consolidated Balance Sheets as a redeemable noncontrolling interest classified as temporary equity in accordance with the terms of the Preferred Units, including the redemption rights with respect thereto. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. The Company applies a two-step approach to measure the redeemable noncontrolling interest related to the Preferred Units, by first allocating a portion of the Company’s net income in accordance with the terms of the Partnership LPA. After consideration of the foregoing, the Company records an additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end, if applicable. The amount of such adjustment is determined based upon the accreted value method to reflect the passage of time until the Preferred Units are exchangeable at the option of the holder. Pursuant to this method, the net transaction price is accreted using the effective interest method, to the Series A Redemption Price (as defined in the Partnership LPA) calculated at the seventh anniversary of the closing of the Preferred Unit Offering. The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price. Activities related to Preferred Units for the three months ended March 31, 2022 are as follows: Units Outstanding Amount (3) (In thousands, except for unit data) Redeemable noncontrolling interest — Preferred Units, immediately upon Closing Date of Transaction (1) 396,417 $ 462,717 Distribution payable to Preferred Unit limited partners — (6,937) Allocation of net income — 4,993 Redeemable noncontrolling interest — Preferred Units, as of March 31, 2022 396,417 460,773 Embedded derivative liability (2) 91,936 $ 552,709 (1) Included 21,417 PIK units on a pro rata basis. (2) Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. Refer to Note 15—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period. (3) As of March 31, 2022, the Redemption Price would have been based on an 11.1% percent internal rate of return, which would equate to a redemption value of $700.0 million. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Company previously issued incentive units, which included performance and service conditions, to certain employees and board members. The units consisted of Class A-1, Class A-2, and Class A-3 units. These units derived value from the Company’s certain wholly owned subsidiaries. Class A-1 and A-2 units would have vested upon either (i) the date of consummation of a change in control or (ii) the date that is 1-year following the consummation of the initial public offering (“IPO”) of the Company (or its successor) (collectively “Exit Events”). Class A-3 units would have vested upon a change in control, if the participants were employed at the time of the event, or upon termination of the participant by the Company. Immediately upon Closing, all outstanding Class A-1 and Class A-2 units were cancelled and exchanged for 2,650,000 shares (the “Class A Shares”) of the Company’s Class A Common Stock. These Class A Shares are issued and outstanding as they were distributed pro rata to all holders of Class A-1 and Class A-2 units by the Common Unit limited partners from the 50,000,000 common units they received upon the Closing. Before distributing these Common Units, the Common Unit limited partners redeemed them for Class A Common Stock. The Class A Shares are held in escrow and will vest over three to four years. Similarly, the Class A-3 units were exchanged for approximately 163,000 Class C Common Stock and Common Units (the “Class C Shares”) and will vest over four years. The Company also issued approximately 38,000 replacement restricted share awards (“Replacement Awards”) to new employees that transitioned from ALTM as part of the merger. These changes for all three share types established a new measurement date. The Class A Shares, Class C Shares and Replacement Awards were valued based on the Company’s publicly quoted price on the measurement date, which was the Closing Date of the Transaction. With respect to these shares, the Company recorded compensation expenses of $6.1 million for the three months ended March 31, 2022, based on a straight line amortization of the associated awards’ fair value over the respective vesting life of the shares. With respect to the incentive units, no compensation expenses were recorded for the three months ended March 31, 2021, as the incentive units were considered non-vested prior to their cancellation and exchange for Class A or Class C Common Stock. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company is subject to U.S. federal income tax and the Texas margin tax. The Company’s income tax provision for the three months ended March 31, 2022 consists of following: Three Months Ended March 31, 2022 2021 (In thousands) Current tax expense: Federal $ — $ — State and local — — Total current tax expense — — Deferred tax expense: Federal — — State and Local 676 — Total deferred tax expense 676 — Total income tax expense $ 676 $ — The Company records income taxes using an estimated annual effective tax rate and recognizes specific events discretely as they occur. The following table presents reconciliation of the U.S. statutory income tax rate to the estimated annual effective tax rate: Three Months Ended March 31, 2022 U.S. statutory rate (1) 21.0 % Tax attributable to Noncontrolling interest - Common Units limited partners (11.6) % Tax attributable to Noncontrolling interest - Preferred Units limited partners (5.1) % State tax rate 3.1 % Other 0.2 % Valuation allowance (4.5) % Effective rate 3.1 % (1) Prior to the Closing on February 22, 2022, the Company was organized as limited partnership and was not subject to the U.S. federal income tax for the three months ended March 31, 2021. For state purposes, the Company records deferred tax assets and liabilities based on the differences between the carrying value and tax basis of assets and liabilities recorded on the consolidated balance sheets. The deferred tax liabilities recorded as of March 31, 2022 and December 31, 2021 relate to these differences. For federal purposes, the Company has a deferred tax asset related to our investment in the Partnership and net operating losses. The Company recorded a full allowance valuation on its deferred tax assets, as it has determined that more-likely-than-not that the benefit of the deferred tax assets will not be realized. Upon Closing, the Company assumed certain uncertain tax positions from ALTM. The Company accounts for income taxes in accordance with ASC 740—Income Taxes , which prescribes a minimum recognition threshold a tax position must meet before being recognized in the financial statements. Tax positions generally refer to a position taken in a previously filed income tax return or expected to be included in a tax return to be filed in the future that is reflected in the measurement of current and deferred income tax assets and liabilities. Reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows: (In thousands) Amount Balance as of January 1, 2022 $ — Increase related to ALTM acquisition 5,238 Reduction related to current year activities (228) Balance as of March 31, 2022 $ 5,010 |
NET INCOME PER SHARE
NET INCOME PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The computation of basic and diluted net income (loss) per share for the periods presented in the Condensed Consolidated Financial Statements is shown in the table below. Three Months Ended March 31, 2022 2021 Income Weighted-average shares Per Share Income Weighted-average shares Per Share (In thousands, except per share data) Basic: Net income attributable to Class A common shareholders $ 3,865 18,696 $ 0.21 $ — — $ — Effect of dilutive securities: Replacement Awards — 17 — — — — Diluted (1)(2) : Net income attributable to Class A common shareholders $ 3,865 18,713 $ 0.21 $ — — $ — (1) The effect of an assumed exchange of the outstanding Preferred Units and outstanding public and private warrants for shares of Class A Common Stock would have been anti-dilutive for all periods presented in which the Preferred Units and public and private warrants were outstanding. (2) 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. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company’s financial assets and liabilities measured at fair value on a recurring basis include cash and cash equivalents, accrued receivables, accounts receivable, accounts receivable from affiliates, dividends and distributions payable, interest rate and commodity swap derivatives, and Company’s private and public warrants and an embedded derivative liability related to the issuance of Preferred Units. Topic 820 establishes a framework for measuring fair value in U.S. GAAP, clarifies the definition of fair value within that framework, and requires disclosures about the use of fair value measurements. Topic 820 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Topic 820 provides a framework for measuring fair value, establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of the counterparty’s creditworthiness when valuing certain assets. Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level 1 inputs). The three levels of the fair value hierarchy under Topic 820 are described below: Level 1 inputs : Unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 inputs : Inputs, other than quoted prices in active markets, that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 inputs : Prices or valuations that require unobservable inputs that are both significant to the fair value measurement and unobservable. Valuation under Level 3 generally involves a significant degree of judgment from management. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Where available, fair value is based on observable market prices or inventory parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity. The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021: March 31, 2022 Level 1 Level 2 Level 3 Total (In thousands) Interest rate derivatives $ — $ 9,655 $ — $ 9,655 Total assets — 9,655 — 9,655 Mandatorily redeemable Preferred Units — — 136,070 136,070 Embedded derivative — — 91,936 91,936 Public warrants 126 — — 126 Private warrants — — 95 95 Interest rate derivatives — 7 — 7 Total liabilities $ 126 $ 7 $ 228,101 $ 228,234 December 31, 2021 Level 1 Level 2 Level 3 Total (In thousands) Commodity swaps $ — $ 205 $ — $ 205 Interest rate derivatives — 2,662 — 2,662 Total liabilities $ — $ 2,867 $ — $ 2,867 The Company is exposed to certain risks arising from both its business operations and economic conditions, and the Company enters into certain derivative contracts to manage the exposures. Refer to Note 16—Derivatives and Hedging Activities in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further discussion related to commodity swaps and interest rate derivatives. The Company bifurcated and recognized the embedded derivative associated with the Preferred Units related to the exchange option provided to the Preferred Unit holders under the terms of the Amended LPA. The valuation of the embedded derivative, (using an income approach), was based on expected future interest rates using the Black-Karasinski model, the Company’s imputed interest rate ranged from 7.32% to 11.58%, interest rate volatility of 39.79%, the expected timing of periodic cash distributions, the estimated timing for the potential exercise of the exchange option of 4.2 years and anticipated dividend yields of the Preferred Units. The Company recorded an unrealized loss of $2.9 million for the three months ended March 31, 2022, which was recorded as an “Unrealized loss on embedded derivative” in the Condensed Consolidated Statement of Operations. The Company has classified these recurring fair value measurements as Level 3 in the fair value hierarchy. The carrying value of the Company’s Public Warrants are recorded at fair value based on quoted market prices, a Level 1 fair value measurement. The carrying value of the Company’s Private Placement Warrants are recorded at fair value determined using an option pricing model, a Level 3 fair value measurement, which is calculated based on key assumptions related to expected volatility of the Company’s common stock, an expected dividend yield, the remaining term of the warrants outstanding and the risk-free rate based on the U.S. Treasury yield curve in effect at the time of the valuation. These assumptions are estimated utilizing historical trends of the Company’s common stock, Public Warrants and other factors. The Company has recorded a liability of $0.2 million as of March 31, 2022. There was no change in fair value of the warrants since closing of the Transaction through reporting date. |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2022 | |
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. The Company did not elect to apply hedge accounting to these derivative contracts and recorded fair value of the derivatives on the Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021. 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 minimizes counterparty credit risk in derivative instruments by entering into transactions with high credit-rating counterparties. The Company’s objectives in using interest rate derivatives is 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. In September of 2019, BCP PHP entered into two interest rate swaps on 75.0% of the outstanding $513.0 million term loan. These instruments were effective September 30, 2019 and have a mandatory termination date on November 19, 2024. The notional amounts of these swaps float monthly such that 75.0% of the total outstanding term loan is covered by the notional of the two swaps over the life of the associated term facility. These swaps result in fixed LIBOR rates ranging from 1.76% to 1.78% for the respective notional amounts of our debt for the LIBOR component of our interest rate and are paid in monthly installments. 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. Interest rate swap derivative liabilities were $7 thousand and $2.7 million as of March 31, 2022 and December 31, 2021, respectively. Interest rate swap derivative assets were $9.7 million as of March 31, 2022. BCP PHP recorded cash settlements on interest rate swap derivatives of $0.9 million and $0.6 million for the three months ended March 31, 2022 and 2021, respectively, in the “Interest Expense” of the Condensed Consolidated Statements of Operations. In addition, BCP PHP recorded unrealized gain of $11.6 million and unrealized loss of $10.6 million for the change in fair value of the interest rate swap derivatives for the three months ended March 31, 2022 and 2021, respectively, in the “Interest Expense” of the Condensed Consolidated Statements of Operations. Commodity Price Risk Similarly, in 2020 and 2021 the Company entered into WTI crude hedges at a specific notional that provides for a fixed price for crude in the Permian Basin. All of the Company’s commodity swaps had reached maturity as of December 31, 2021. The fair value or settlement value of the swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheet. Commodity swap derivative liability was nil and $0.2 million as of March 31, 2022 and December 31, 2021, respectively. |
SEGMENTS
SEGMENTS | 3 Months Ended |
Mar. 31, 2022 | |
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 chief operating decision maker (“CODM”) to make key operating decisions, assess performance and allocate resources. Our Chief Executive Officer is the CODM. These segments are 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) water gathering and disposal. • Pipeline Transportation: The Pipeline Transportation segment consists of equity investment interests in four Permian Basin pipelines that access to various points along the Texas Gulf Coast, and our Delaware Link Pipeline that is under construction. The current operating pipelines transport crude oil, natural gas and NGLs to the Texas Gulf Coast. Upon Closing, our CODM reviewed the Company and ALTM’s reporting segment activities. The Company then renamed its Gathering and Processing segment to Midstream Logistics and its Transmission segment to Pipeline Transportation. These name changes were made to better align segment activities with the name of respective segment. There was no change in segment composition or structure for the three months ended March 31, 2022. The following tables present the operating results and other key financial measures for the individual operating segment as of and for the three months ended March 31, 2022 and 2021: Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated (2) For the three months ended 3/31/2022 (In thousands) Segment net income (loss) including noncontrolling interests $ 9,185 $ 29,136 $ (16,932) $ 21,389 Add back: Interest expense (income) 26,642 (1,614) 1,617 26,645 (Gain) on redemption of mandatorily redeemable Preferred units — — (4,493) (4,493) Income tax expense (benefit) 457 (39) 258 676 Depreciation and amortization 60,893 130 — 61,023 Contract assets amortization 448 — — 448 Proportionate EMI EBITDA — 40,741 — 40,741 Share-based compensation — — 6,132 6,132 Loss on disposal of assets 110 — — 110 Loss on debt extinguishment 129 — — 129 Unrealized loss on derivatives — — 2,886 2,886 Integration costs 4,104 — 2,047 6,151 Acquisition transaction costs 4 — 5,672 5,676 Other one-time costs or amortization 918 — 277 1,195 Deduct: Equity (income) from unconsolidated affiliates — 27,917 — 27,917 Segment adjusted EBITDA $ 102,890 $ 40,437 $ (2,536) $ 140,791 Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated (2) For the three months ended 3/31/2021 (In thousands) Segment net income (loss) including noncontrolling interests $ 8,194 $ 12,429 $ (2,487) $ 18,136 Add back: Interest expense (income) 27,694 (2,145) — 25,549 Depreciation and amortization 55,842 129 — 55,971 Contract assets amortization 448 — — 448 Proportionate EMI EBITDA — 16,256 — 16,256 Loss on disposal of assets 32 — — 32 Gain on debt extinguishment (239) — — (239) Derivatives loss due to Winter Storm Uri 13,456 — — 13,456 Other one-time costs or amortization 389 8 (69) 328 Deduct: Interest and other income 16 — — 16 Equity (income) from unconsolidated affiliates — 11,355 — 11,355 Segment adjusted EBITDA $ 105,800 $ 15,322 $ (2,556) $ 118,566 (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. (2) Results do not include legacy ALTM prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. The following tables present the revenue for individual operating segment for the three months ended March 31, 2022 and 2021: Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated For the three months ended 3/31/2022 (In thousands) Revenue $ 255,373 $ — $ — $ 255,373 Other revenue 1,874 2 — $ 1,876 Total segment operating revenue $ 257,247 $ 2 $ — $ 257,249 Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated For the three months ended 3/31/2021 (In thousands) Revenue $ 147,655 $ — $ — $ 147,655 Other revenue 446 2 — $ 448 Total segment operating revenue $ 148,101 $ 2 $ — $ 148,103 (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. The following table present total assets for individual operation segment as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 (In thousands) Midstream Logistics $ 3,624,556 $ 2,916,774 Pipeline Transportation 2,383,390 635,784 Segment total assets 6,007,946 3,552,558 Corporate and other 5,711 648 Total assets $ 6,013,657 $ 3,553,206 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 4, 2022, the Company filed a registration statement on Form S-3 with the SEC to reserve 15,000,000 shares of Class A Common Stock for issuance under the Plan, refer to Note—10 Equity and Warrants for additional information. On April 20, 2022, the Company’s Board of Directors declared a cash dividend of $1.50 per share on the Company’s Class A Common Stock which will be payable to stockholders on May 17, 2022. The Company, through its ownership of the general partner of the Partnership, declared a distribution of $1.50 per Common Unit from the Partnership to the holders of Common Units. Please refer to Note 10—Equity and Warrants for additional information. On May 10, 2022, the Company’s Board of Directors amended the Company’s 2019 Omnibus Compensation Plan (as amended from time to time, the “2019 Plan”), in order to reflect the Company’s name change and certain other non-material updates. Under the 2019 Plan, the Company is authorized to grant equity-based awards to its employees and directors. The foregoing description of the 2019 Plan is qualified in its entirety by reference to the 2019 Plan, a copy of which is attached as Exhibit 10.5 to this Quarterly Report on Form 10-Q and is incorporated herein by reference. |
DESCRIPTION OF THE ORGANIZATI_2
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying unaudited 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 current year 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. All intercompany balances and transactions have been eliminated in consolidation. |
Principles of Consolidation | Prior to the Closing, the Company’s financial statements that were filed with the SEC were derived from ALTM’s accounting records. As the Transaction was determined to be a reverse merger, BCP was considered as the accounting acquirer and ALTM was the legal acquirer. The accompanying Condensed Consolidated Financial Statements herein include (1) BCP’s net assets carried at historical value, (2) BCP’s historical results of operations prior to the Transaction, (3) the ALTM’s net assets carried at fair value as of the Closing Date and (4) the combined results of operations with the Company’s results presented within the Condensed Consolidated Financial Statements from February 22, 2022 going forward. Refer to Note 2 — Business Combination |
Variable Interest Entity | Variable Interest Entity The Company uses a qualitative approach in assessing the consolidation requirement for variable interest entities. The approach focuses on identifying which enterprise has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. In the event that the Company is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity would be consolidated in our financial statements. The Company has determined that it has significant influence over the operating and financial policies of the four pipeline entities in which it is invested, but does not exercise control over them; and hence, it accounts for these investments using the equity method. Refer to Note 9—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest — Common Units Limited Partners Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C common stock, par value $0.0001 per share, to Contributor. Please refer to the Transaction discussed above. The Common Units are redeemable at the option of unit holders and accounted for on the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity. The Company records the redeemable noncontrolling interest at the higher of (i) its initial value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the maximum redemption value as of the balance sheet date. The redemption value was determined based on a 5-day volume weighted average closing price of the Class A Common Stock. See discussion and additional details in Note 10—Equity and Warrant Redeemable Noncontrolling Interest — Preferred Unit Limited Partners The Partnership issued Series A Cumulative Redeemable Preferred Units (“Preferred Units”) on June 12, 2019. As the Transaction was accounted for as a reverse merger, the Company assumed certain Preferred Units that were issued and outstanding were assumed at Closing for accounting purposes. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. |
Equity Method Interests | Equity Method InvestmentsThe Company follows the equity method of accounting when it does not exercise control over its equity interests, but can exercise significant influence over the operating and financial policies of the entity. Under this method, the equity investments are carried originally at acquisition cost, increased by the Company’s proportionate share of the equity interest’s net income and contributions made, and decreased by the Company’s proportionate share of the equity interest’s net losses and distributions received.Unamortized basis differences will be amortized into equity income over the useful lives of the underlying pipeline assets. |
Use of Estimates | Use of Estimates Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its condensed financial statements, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include the valuation of derivatives, the valuation of tangible and intangible assets, the valuation of share-based compensation, the valuation of contingent liabilities, the valuation of mandatorily redeemable Preferred Units, and the valuation of noncontrolling interests. |
Inventory | InventoryOther current assets include inventory that consists of condensate, and NGLs that are valued at the lower of cost or market. At the end of each reporting period, the Partnership assesses the carrying value of inventory and makes any adjustments necessary to reduce the carrying value to the applicable net realizable value. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 360, Property, Plant and Equipment, long-lived assets, excluding goodwill, to be held and used by the Company are reviewed for impairment annually or on an interim basis if events or circumstances indicate that the fair value of the assets have decreased below their carrying value. For long-lived assets to be held and used, the Company bases their evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. |
Transactions with Affiliates | Transactions with AffiliatesThe accounts receivable from or payable to affiliate represent the net result of the Company’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache and its subsidiaries, who held equity shares that represented approximately 13.6% of the Company’s voting power as of April 22, 2022. |
Net Income per Share | Net Income Per Share Basic net income per share is calculated by dividing net income attributable to Class A common shareholders by the weighted average number of shares of Class A Common Stock outstanding during the period. Class C Common Stock is excluded from the weighted average shares outstanding for the calculation of basic net income per share, as holders of Class C Common Stock are not entitled to any dividends or liquidating distributions. The Company uses the “if-converted method” to determine the potential dilutive effect of (i) an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) for shares of Class A Common Stock, (ii) an assumed exercise of the outstanding public and private warrants for shares of Class A Common Stock and (iii) an assumed exchange of the outstanding Preferred Units for shares of Class A Common Stock. The dilutive effect of any earn-out consideration payable in shares is only included in periods for which the underlying conditions for the issuance are met. |
Recently Adopted Accounting Pronouncement and Recent Accounting Pronouncement Not Yet Adopted | Recently Adopted Accounting Pronouncement Effective January 1, 2022, the Company adopted ASU 2021-08 , Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers . Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value. With adoption of ASU 2021-08, the Company assumed contract liabilities at carrying value of $9.1 million upon Closing. Recent Accounting Pronouncement Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”) . ASU 2020-04 was issued to ease the potential accounting burden expected when global capital markets move away from the London Interbank Offered Rate (“LIBOR”), the benchmark interest rate banks use to make short-term loans to each other. The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationship, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the effect that ASU 2020-04 will have on its Consolidated Financial Statements. In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method (“ASU 2022-01”) . Current GAAP permits only prepayable financial assets and one or more beneficial interests secured by a portfolio of prepayable financial instruments to be included in a last-of-layer closed portfolio. The amendments in ASU 2022-01 allow nonprepayable financial assets also to be included in a closed portfolio hedged using the portfolio layer method. That expanded scope permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. The amendments in ASU 2022-01 also clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers as follows: (1) an entity is required to maintain basis adjustments in an existing hedge on a closed portfolio basis (that is, not allocated to individual assets), (2) an entity is required to immediately recognize and present the basis adjustment associated with the amount of the designated layer that was breached in interest income. In addition, an entity is required to disclose that amount and the circumstances that led to the breach, (3) an entity is required to disclose the total amount of the basis adjustments in existing hedges as a reconciling amount if other areas of GAAP require the disaggregated disclosure of the amortized cost basis of assets included in the closed portfolio, and (4) an entity is prohibited from considering basis adjustments in an existing hedge when determining credit losses. The guidance is effective for public business entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted the amendments in |
Business Combination | The Transaction was accounted for as a business combination in accordance with ASC 805, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. The Company also adopted ASU 2021-08, effective as of January 1, 2022, to record contract liabilities at their carrying value as of the acquisition date. Although the Company was the legal acquirer, BCP and BCP GP were determined to be the accounting acquirer and legal acquiree. As a result, BCP and its subsidiaries’ net assets were carried at historical value, acquired net assets were measured at fair value except contract liabilities being recorded at carrying value at the acquisition date, and results of operations of ALTM and its subsidiaries were included in the Company’s Condensed Consolidated Financial Statements from the Closing Date going forward. The preliminary purchase price allocation is based on an assessment of the fair value of the assets acquired and liabilities assumed in the acquisition using inputs that are not observable in the market and thus level 3 inputs. The fair value of the processing plant, gathering system and related facilities and equipment are based on market and cost approaches. The goodwill of $3.9 million relates to operational synergies. The value of the Preferred Units and assumed contingent liability was determined through a probability-weighted analysis of the expected future cash flows and other applicable valuation techniques. See additional details for Preferred Units in Note 11—Series A Cumulative Redeemable Preferred Units and contingent liabilities in Note 8 —Commitments and Contingencies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, valuation of the underlying assets of the equity method investments and liabilities assumed. However, the Company is continuing its review of these matters during the measurement period, and if new information obtained about facts and circumstances that existed at the acquisition date identifies adjustments to the liabilities initially recognized, as well as any additional liabilities that existed at the acquisition date, the acquisition accounting will be revised to reflect the resulting adjustments to the provisional amounts initially recognized. The Company will finalize the purchase price allocation during the 12-month period following the acquisition date. |
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. |
Property, Plant and Equipment | Property, plant and equipment are carried at cost or fair market value at the date of acquisition less accumulated depreciation. The cost basis of constructed assets includes materials, labor, and other direct costs. Major improvements or betterment are capitalized, while repairs that do not improve the life of the respective assets are expensed as incurred.The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated. |
Goodwill | Goodwill is tested at least annually as of December 31 of each year, or more frequently as events occur or circumstances change that would more-likely-than-not reduce fair value of a reporting unit below its carrying value. |
Debt and Financing Cost | The amortization of the deferred financing costs was charged to interest expense for the periods presented. |
Commitments and Contingencies | Pursuant to ASC 805, this earn-out consideration was a pre-existing contingency and accounted for as an assumed liability to the acquirer on acquisition dateThe Company determined the earn-out consideration to be classified as an equity based on the settlement provision. |
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 Sheet.The remaining 375,000 Preferred Units assumed on the Closing Date do not contain a mandatory redemption feature, and are accounted for on the Company’s Condensed Consolidated Balance Sheets as a redeemable noncontrolling interest classified as temporary equity in accordance with the terms of the Preferred Units, including the redemption rights with respect thereto. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. |
Share-Based Compensation | The Class A Shares, Class C Shares and Replacement Awards were valued based on the Company’s publicly quoted price on the measurement date, which was the Closing Date of the Transaction. With respect to these shares, the Company recorded compensation expenses of $6.1 million for the three months ended March 31, 2022, based on a straight line amortization of the associated awards’ fair value over the respective vesting life of the shares. |
Income Tax | The Company accounts for income taxes in accordance with ASC 740—Income Taxes, which prescribes a minimum recognition threshold a tax position must meet before being recognized in the financial statements. |
Fair Value Measurements | The Company’s financial assets and liabilities measured at fair value on a recurring basis include cash and cash equivalents, accrued receivables, accounts receivable, accounts receivable from affiliates, dividends and distributions payable, interest rate and commodity swap derivatives, and Company’s private and public warrants and an embedded derivative liability related to the issuance of Preferred Units. Topic 820 establishes a framework for measuring fair value in U.S. GAAP, clarifies the definition of fair value within that framework, and requires disclosures about the use of fair value measurements. Topic 820 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Topic 820 provides a framework for measuring fair value, establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of the counterparty’s creditworthiness when valuing certain assets. Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level 1 inputs). The three levels of the fair value hierarchy under Topic 820 are described below: Level 1 inputs : Unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 inputs : Inputs, other than quoted prices in active markets, that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 inputs : Prices or valuations that require unobservable inputs that are both significant to the fair value measurement and unobservable. Valuation under Level 3 generally involves a significant degree of judgment from management. |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary estimated fair value of assets acquired and liabilities assumed in the Transaction in accordance with ASC 805: (In thousands) Amount Cash and cash equivalent $ 13,401 Accounts receivable 1,341 Accounts receivable - affiliates 15,681 Property, plant, and equipment, net 634,923 Intangible assets, net 13,200 Investments in unconsolidated affiliates 1,755,000 Prepaid expense and other assets 8,225 Goodwill 3,894 Total assets acquired 2,445,665 Accrued expenses and other accrued liabilities 4,923 Long-term debt 657,000 Embedded derivative liabilities 89,050 Contract liabilities 9,102 Mandatory redeemable Preferred Units 200,667 Deferred tax liabilities 4,010 Contingent liabilities 4,451 Total liabilities assumed 969,203 Redeemable noncontrolling interest - Preferred Unit limited partners 462,717 Total consideration transferred $ 1,013,745 |
Schedule of Pro Forma Information | The unaudited supplemental pro forma financial for informational purposes only and is not indicative of future results. The results below for the three months ended March 31, 2022 and 2021 combine the results of the Company and the Partnership, giving effect to the Transaction as if it had been completed on January 1, 2021. Three Months Ended March 31, 2022 2021 (In thousands) Pro forma Pro forma Revenues $ 284,102 $ 182,249 Net income including noncontrolling interest $ 13,468 $ 16,802 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | The following table presents a disaggregation of the Company’s revenue. Three Months Ended March 31, 2022 2021 (In thousands) Gathering and processing services $ 80,445 $ 67,662 Natural gas, NGLs and condensate sales 174,928 79,993 Other revenue 1,876 448 Total revenues and other $ 257,249 $ 148,103 |
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 has not yet been recognized, representing our contractually committed revenues as of March 31, 2022: Amount Fiscal Year (In thousands) Remaining of 2022 $ 10,179 2023 11,626 2024 8,102 2025 6,227 2026 5,066 Thereafter 72,952 $ 114,152 |
Schedule of Contract with Customer, Contract Liability | The following table provides information about contract liabilities from contracts with customers as of March 31, 2022: Amount (In thousands) Balance as of January 1, 2022 $ 14,756 Reclassification of beginning contract liabilities to revenue as a result of performance obligation being satisfied (1,328) Cash received and not recognized as revenue 13,908 Balance as of March 31, 2022 27,336 Less: Current portion 4,994 Non-current portion $ 22,342 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets as follows: Estimated Useful Life Buildings 30 years Gathering, processing and transmission systems and facilities 20 years Furniture and fixtures 7 years Vehicles 5 years Computer hardware and software 3 years Property, plant and equipment, at carrying value, is as follows: March 31, December 31, 2022 2021 (In thousands) Gathering, processing and transmission systems and facilities $ 2,770,137 $ 2,121,434 Vehicles 7,055 6,090 Computers and equipment 4,492 4,271 Less: accumulated depreciation (367,629) (337,030) Total depreciable assets, net 2,414,055 1,794,765 Construction in progress 44,142 24,888 Land 19,747 19,626 Total property, plant and equipment, net $ 2,477,944 $ 1,839,279 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net are comprised of the following: March 31, December 31, 2022 2021 (In thousands) Customer contracts $ 1,135,963 $ 1,135,963 Right of way assets 116,471 99,345 Less accumulated amortization (479,455) (449,259) Total amortizable intangible assets, net $ 772,979 $ 786,049 |
DEBT AND FINANCING COSTS - (Tab
DEBT AND FINANCING COSTS - (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The following table summarizes the Company’s debt obligations as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 (In thousands) $1.25 billion term loan (BCP I) $ 1,172,292 $ 1,175,417 $690 million term loan (BCP II) 627,695 639,393 $513 million term loan (BCP PHP) 467,762 479,377 $800 million revolving line of credit (Partnership) 657,000 — $125 million revolving line of credit (BCP I) 59,000 52,000 Total Long-term debt 2,983,749 2,346,187 Less: Deferred financing costs, net (35,400) (38,485) 2,948,349 2,307,702 Less: Current portion, net (54,324) (54,280) Long-term portion of debt and finance lease obligations, net $ 2,894,025 $ 2,253,422 |
Schedule of Financing Costs, Net | The table below presents the components of the Company’s financing costs, net of capitalized interest: Three Months Ended March 31, 2022 2021 (In thousands) Capitalized interest $ 104 $ 211 Deferred financing costs 3,389 3,305 Interest expense 23,281 21,794 Total financing costs, net of capitalized interest $ 26,774 $ 25,310 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Components of Accrued Expenses | The following table provides detail of the Company’s accrued expenses at March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 (In thousands) Accrued product purchases $ 168,324 $ 118,364 Accrued taxes 7,282 4,299 Accrued salaries, vacation, and related benefits 3,657 2,113 Accrued capital expenditures 4,608 2,995 Accrued interest expenses 7,777 — Accrued expense due to related party 4,247 — Accrued other expenses 14,460 7,872 Total accrued expenses $ 210,355 $ 135,643 |
EQUITY METHOD INVESTMENTS (Tabl
EQUITY METHOD INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Method Investments | As of March 31, 2022, 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 equity method investment (“EMIs” or “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 2022 2021 (In thousands) Gulf Coast Express Pipeline LLC 16.0% $ 465,028 $ — Permian Highway Pipeline LLC (1) 53.3% 1,426,736 626,477 Breviloba, LLC (Shin Oak) 33.0% 469,557 — $ 2,361,321 $ 626,477 (1) Ownership for Permian Highway Pipeline LLC was 53.3% and 26.7% as of March 31, 2022 and December 31, 2021, respectively. The following table presents the activity in the Company’s EMIs for the three months ended March 31, 2022: Gulf Coast Express Pipeline LLC Permian Highway Pipeline LLC Breviloba, LLC Total (2) (In thousands) Balance at December 31, 2021 $ — $ 626,477 $ — $ 626,477 Acquisitions 470,000 815,000 470,000 1,755,000 Distributions (8,412) (35,998) (3,663) (48,073) Equity income, net (1) 3,440 21,257 3,220 27,917 Balance at March 31, 2022 $ 465,028 $ 1,426,736 $ 469,557 $ 2,361,321 (1) Net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $0.8 million from Gulf Cost Express, $1.3 million from Permian Highway Pipeline LLC and $0.1 million from Breviloba. (2) The EMIs acquired in the Transaction are included in the results from February 22, 2022 to March 31, 2022, and this is also the case for the additional 26.67% of PHP that was acquired in the Transaction. The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation . Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s financial statement consolidations. |
Schedule of Equity Method Investment, Summarized Financial Information | The following table represents selected income statement data for the Company’s EMI pipelines (on a 100 percent basis) for the three months ended March 31, 2022. Three Months Ended March 31, 2022 2021 Gulf Coast Express Pipeline LLC Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC (1) Permian Highway Pipeline LLC (1) Breviloba, LLC (1) (In thousands) Revenues $ 89,973 $ 97,856 $ 48,521 $ 88,369 $ 97,848 $ 34,529 Operating income 63,443 59,476 26,314 60,108 42,580 17,300 Net income 63,529 59,213 26,366 59,768 42,580 17,359 (1) For the three months ended March 31, 2021, the Company only had equity interest in Permian Highway Pipeline LLC. |
SERIES A CUMULATIVE REDEEMABL_2
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Preferred Units | Activities related to Preferred Units for the three months ended March 31, 2022 are as follows: Units Outstanding Amount (3) (In thousands, except for unit data) Redeemable noncontrolling interest — Preferred Units, immediately upon Closing Date of Transaction (1) 396,417 $ 462,717 Distribution payable to Preferred Unit limited partners — (6,937) Allocation of net income — 4,993 Redeemable noncontrolling interest — Preferred Units, as of March 31, 2022 396,417 460,773 Embedded derivative liability (2) 91,936 $ 552,709 (1) Included 21,417 PIK units on a pro rata basis. (2) Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. Refer to Note 15—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period. (3) As of March 31, 2022, the Redemption Price would have been based on an 11.1% percent internal rate of return, which would equate to a redemption value of $700.0 million. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Total Income Tax Provision (Benefit) | The Company is subject to U.S. federal income tax and the Texas margin tax. The Company’s income tax provision for the three months ended March 31, 2022 consists of following: Three Months Ended March 31, 2022 2021 (In thousands) Current tax expense: Federal $ — $ — State and local — — Total current tax expense — — Deferred tax expense: Federal — — State and Local 676 — Total deferred tax expense 676 — Total income tax expense $ 676 $ — |
Schedule of Reconciliation of Tax on Income (Loss) Before Income Taxes and Total Tax Expense (Benefit) | The Company records income taxes using an estimated annual effective tax rate and recognizes specific events discretely as they occur. The following table presents reconciliation of the U.S. statutory income tax rate to the estimated annual effective tax rate: Three Months Ended March 31, 2022 U.S. statutory rate (1) 21.0 % Tax attributable to Noncontrolling interest - Common Units limited partners (11.6) % Tax attributable to Noncontrolling interest - Preferred Units limited partners (5.1) % State tax rate 3.1 % Other 0.2 % Valuation allowance (4.5) % Effective rate 3.1 % |
Schedule of Unrecognized Tax Benefits | Reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows: (In thousands) Amount Balance as of January 1, 2022 $ — Increase related to ALTM acquisition 5,238 Reduction related to current year activities (228) Balance as of March 31, 2022 $ 5,010 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Net (Loss) Per Share | The computation of basic and diluted net income (loss) per share for the periods presented in the Condensed Consolidated Financial Statements is shown in the table below. Three Months Ended March 31, 2022 2021 Income Weighted-average shares Per Share Income Weighted-average shares Per Share (In thousands, except per share data) Basic: Net income attributable to Class A common shareholders $ 3,865 18,696 $ 0.21 $ — — $ — Effect of dilutive securities: Replacement Awards — 17 — — — — Diluted (1)(2) : Net income attributable to Class A common shareholders $ 3,865 18,713 $ 0.21 $ — — $ — (1) The effect of an assumed exchange of the outstanding Preferred Units and outstanding public and private warrants for shares of Class A Common Stock would have been anti-dilutive for all periods presented in which the Preferred Units and public and private warrants were outstanding. (2) 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. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022 and December 31, 2021: March 31, 2022 Level 1 Level 2 Level 3 Total (In thousands) Interest rate derivatives $ — $ 9,655 $ — $ 9,655 Total assets — 9,655 — 9,655 Mandatorily redeemable Preferred Units — — 136,070 136,070 Embedded derivative — — 91,936 91,936 Public warrants 126 — — 126 Private warrants — — 95 95 Interest rate derivatives — 7 — 7 Total liabilities $ 126 $ 7 $ 228,101 $ 228,234 December 31, 2021 Level 1 Level 2 Level 3 Total (In thousands) Commodity swaps $ — $ 205 $ — $ 205 Interest rate derivatives — 2,662 — 2,662 Total liabilities $ — $ 2,867 $ — $ 2,867 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables present the operating results and other key financial measures for the individual operating segment as of and for the three months ended March 31, 2022 and 2021: Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated (2) For the three months ended 3/31/2022 (In thousands) Segment net income (loss) including noncontrolling interests $ 9,185 $ 29,136 $ (16,932) $ 21,389 Add back: Interest expense (income) 26,642 (1,614) 1,617 26,645 (Gain) on redemption of mandatorily redeemable Preferred units — — (4,493) (4,493) Income tax expense (benefit) 457 (39) 258 676 Depreciation and amortization 60,893 130 — 61,023 Contract assets amortization 448 — — 448 Proportionate EMI EBITDA — 40,741 — 40,741 Share-based compensation — — 6,132 6,132 Loss on disposal of assets 110 — — 110 Loss on debt extinguishment 129 — — 129 Unrealized loss on derivatives — — 2,886 2,886 Integration costs 4,104 — 2,047 6,151 Acquisition transaction costs 4 — 5,672 5,676 Other one-time costs or amortization 918 — 277 1,195 Deduct: Equity (income) from unconsolidated affiliates — 27,917 — 27,917 Segment adjusted EBITDA $ 102,890 $ 40,437 $ (2,536) $ 140,791 Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated (2) For the three months ended 3/31/2021 (In thousands) Segment net income (loss) including noncontrolling interests $ 8,194 $ 12,429 $ (2,487) $ 18,136 Add back: Interest expense (income) 27,694 (2,145) — 25,549 Depreciation and amortization 55,842 129 — 55,971 Contract assets amortization 448 — — 448 Proportionate EMI EBITDA — 16,256 — 16,256 Loss on disposal of assets 32 — — 32 Gain on debt extinguishment (239) — — (239) Derivatives loss due to Winter Storm Uri 13,456 — — 13,456 Other one-time costs or amortization 389 8 (69) 328 Deduct: Interest and other income 16 — — 16 Equity (income) from unconsolidated affiliates — 11,355 — 11,355 Segment adjusted EBITDA $ 105,800 $ 15,322 $ (2,556) $ 118,566 (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. (2) Results do not include legacy ALTM prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. The following tables present the revenue for individual operating segment for the three months ended March 31, 2022 and 2021: Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated For the three months ended 3/31/2022 (In thousands) Revenue $ 255,373 $ — $ — $ 255,373 Other revenue 1,874 2 — $ 1,876 Total segment operating revenue $ 257,247 $ 2 $ — $ 257,249 Midstream Logistics Pipeline Transportation Corporate and Other (1) Consolidated For the three months ended 3/31/2021 (In thousands) Revenue $ 147,655 $ — $ — $ 147,655 Other revenue 446 2 — $ 448 Total segment operating revenue $ 148,101 $ 2 $ — $ 148,103 (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. The following table present total assets for individual operation segment as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 (In thousands) Midstream Logistics $ 3,624,556 $ 2,916,774 Pipeline Transportation 2,383,390 635,784 Segment total assets 6,007,946 3,552,558 Corporate and other 5,711 648 Total assets $ 6,013,657 $ 3,553,206 |
DESCRIPTION OF THE ORGANIZATI_3
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The Transaction (Details) - $ / shares | Mar. 31, 2022 | Feb. 23, 2022 | Feb. 22, 2022 | Dec. 31, 2021 |
Schedule Of Organization [Line Items] | ||||
Percent of common stock, issued and outstanding, owned | 5.00% | |||
Common stock, shares outstanding (in shares) | 66,200,000 | |||
Class C Common Stock | ||||
Schedule Of Organization [Line Items] | ||||
Common stock, shares issued (in shares) | 47,260,000 | 50,000,000 | 50,000,000 | |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares outstanding (in shares) | 47,260,000 | 50,000,000 | ||
Class A Common Stock | ||||
Schedule Of Organization [Line Items] | ||||
Common stock, shares issued (in shares) | 18,986,460 | 0 | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares outstanding (in shares) | 18,986,460 | 0 | ||
Altus Midstream LP | ||||
Schedule Of Organization [Line Items] | ||||
Common stock, shares issued (in shares) | 50,000,000 | 50,000,000 | ||
BCP Raptor Holdco, LLC | ||||
Schedule Of Organization [Line Items] | ||||
Percent of common stock, issued and outstanding, owned | 75.00% | |||
Apache Midstream LLC | ||||
Schedule Of Organization [Line Items] | ||||
Percent of common stock, issued and outstanding, owned | 20.00% |
DESCRIPTION OF THE ORGANIZATI_4
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Redeemable noncontrolling interest (Details) - $ / shares | Mar. 31, 2022 | Feb. 23, 2022 | Feb. 22, 2022 | Dec. 31, 2021 |
Class C Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued (in shares) | 47,260,000 | 50,000,000 | 50,000,000 | |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Altus Midstream LP | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued (in shares) | 50,000,000 | 50,000,000 |
DESCRIPTION OF THE ORGANIZATI_5
DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Feb. 22, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||||
Inventory | $ 4,800,000 | $ 2,100,000 | ||
Impairment of long-lived assets | 0 | $ 0 | ||
Accounts receivable, affiliates | 24,700,000 | |||
Revenue from affiliate | 15,600,000 | |||
Accrued expense due to affiliate | $ 4,247,000 | $ 0 | ||
Apache Midstream LLC | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Ownership percentage by noncontrolling owners | 13.60% | |||
BCP and BCP GP | ||||
Business Acquisition [Line Items] | ||||
Contract liabilities | $ 9,102,000 |
BUSINESS COMBINATION - Addition
BUSINESS COMBINATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Feb. 23, 2022 | Feb. 22, 2022 | Dec. 31, 2021 | |
BCP and BCP GP | |||||
Business Acquisition [Line Items] | |||||
Acquisition-related transaction costs | $ 5.7 | $ 29 | |||
Reversal of acquisition related expenses | $ 18.7 | ||||
Class C Common Stock | |||||
Business Acquisition [Line Items] | |||||
Common stock, shares issued (in shares) | 47,260,000 | 50,000,000 | 50,000,000 | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Altus Midstream LP | |||||
Business Acquisition [Line Items] | |||||
Common stock, shares issued (in shares) | 50,000,000 | 50,000,000 |
BUSINESS COMBINATION - Allocati
BUSINESS COMBINATION - Allocation of Acquisition Costs to Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Feb. 22, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 3,894 | $ 0 | |
BCP and BCP GP | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalent | $ 13,401 | ||
Accounts receivable | 1,341 | ||
Accounts receivable - affiliates | 15,681 | ||
Property, plant, and equipment, net | 634,923 | ||
Intangible assets, net | 13,200 | ||
Investments in unconsolidated affiliates | 1,755,000 | ||
Prepaid expense and other assets | 8,225 | ||
Goodwill | $ 3,900 | 3,894 | |
Total assets acquired | 2,445,665 | ||
Accrued expenses and other accrued liabilities | 4,923 | ||
Long-term debt | 657,000 | ||
Embedded derivative liabilities | 89,050 | ||
Contract liabilities | 9,102 | ||
Mandatory redeemable Preferred Units | 200,667 | ||
Deferred tax liabilities | 4,010 | ||
Contingent liabilities | 4,451 | ||
Total liabilities assumed | 969,203 | ||
Redeemable noncontrolling interest - Preferred Unit limited partners | 462,717 | ||
Total consideration transferred | $ 1,013,745 |
BUSINESS COMBINATION - Pro Form
BUSINESS COMBINATION - Pro Forma (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenues | $ 284,102 | $ 182,249 |
Net income including noncontrolling interest | $ 13,468 | $ 16,802 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | [1] | $ 257,249 | $ 148,103 |
Gathering and processing services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | 80,445 | 67,662 | |
Natural gas, NGLs and condensate sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | 174,928 | 79,993 | |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | [1] | $ 1,876 | $ 448 |
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | [1] | $ 257,249,000 | $ 148,103,000 | |
Capitalized contract cost | 17,900,000 | $ 18,400,000 | ||
Amortization of contract costs | 448,000 | 448,000 | ||
Minimum Volume Commitments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 0 | $ 2,500,000 | ||
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
REVENUE RECOGNITION - Remaining
REVENUE RECOGNITION - Remaining Performance Obligations (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 114,152 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 10,179 |
Expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 11,626 |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 8,102 |
Expected timing of satisfaction, period | 1 year |
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 | $ 6,227 |
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 | $ 5,066 |
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 | $ 72,952 |
Expected timing of satisfaction, period |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 14,756 | |
Reclassification of beginning contract liabilities to revenue as a result of performance obligation being satisfied | (1,328) | |
Cash received and not recognized as revenue | 13,908 | |
Ending balance | 27,336 | |
Less: Current portion | 4,994 | |
Non-current portion | $ 22,342 | $ 11,674 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Total depreciable assets, net | $ 2,414,055 | $ 1,794,765 | |
Less: accumulated depreciation | (367,629) | (337,030) | |
Total property, plant and equipment, net | 2,477,944 | 1,839,279 | |
Depreciation expense | $ 30,800 | $ 25,600 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 30 years | ||
Gathering, processing and transmission systems and facilities | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 20 years | ||
Total property, plant and equipment, gross | $ 2,770,137 | 2,121,434 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 7 years | ||
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 5 years | ||
Total property, plant and equipment, gross | $ 7,055 | 6,090 | |
Computer hardware and software | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 3 years | ||
Total property, plant and equipment, gross | $ 4,492 | 4,271 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 44,142 | 24,888 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 19,747 | $ 19,626 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 3,894,000 | $ 0 | |
Finite-Lived Intangible Assets [Line Items] | |||
Initial term | 10 years | ||
Option to renewal | 10 years | ||
Percent of original consideration paid | 130.00% | ||
Amortization of intangible assets | $ 30,200,000 | $ 30,400,000 | |
Impairment of intangible assets | $ 0 | $ 0 | |
Right of way assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 10 years | ||
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Remaining term | 1 year | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Remaining term | 20 years |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Asset (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Less accumulated amortization | $ (479,455) | $ (449,259) |
Total amortizable intangible assets, net | 772,979 | 786,049 |
Customer contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortizable intangible assets, gross | 1,135,963 | 1,135,963 |
Right of way assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortizable intangible assets, gross | $ 116,471 | $ 99,345 |
DEBT AND FINANCING COSTS - Addi
DEBT AND FINANCING COSTS - Additional Information (Details) | Jan. 16, 2020USD ($) | Sep. 18, 2019USD ($) | Nov. 01, 2018USD ($) | Jun. 22, 2017USD ($) | Nov. 30, 2018USD ($)option | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Feb. 22, 2022 | Dec. 31, 2021USD ($) |
Debt Instrument [Line Items] | |||||||||
Debt, fair value | $ 2,980,000,000 | $ 2,340,000,000 | |||||||
Debt outstanding | 2,983,749,000 | 2,346,187,000 | |||||||
Deferred financing costs | 35,400,000 | 38,485,000 | |||||||
Amortization of deferred financing costs | 3,389,000 | $ 3,305,000 | |||||||
Permian Highway Pipeline (“PHP”) | |||||||||
Debt Instrument [Line Items] | |||||||||
Ownership percentage by noncontrolling owners | 26.67% | 26.67% | |||||||
2017 Credit Facility | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Term | 5 years | ||||||||
Current borrowing capacity | $ 25,000,000 | $ 100,000,000 | |||||||
Debt maximum borrowing capacity | 125,000,000 | ||||||||
LIBOR floor | 0.00% | ||||||||
Debt facility fee percentage | 0.50% | ||||||||
Debt outstanding | 59,000,000 | 52,000,000 | |||||||
2017 Credit Facility | Revolving Credit Facility | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt covenant term, leverage ratio | 4.50 | ||||||||
2017 Credit Facility | Revolving Credit Facility | If Consolidated Net Leverage Ratio is No Greater than 4.50 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 3.75% | ||||||||
Debt facility fee percentage | 0.375% | ||||||||
2017 Credit Facility | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 4.00% | ||||||||
2017 Credit Facility | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | If Consolidated Net Leverage Ratio is No Greater than 4.50 | |||||||||
Debt Instrument [Line Items] | |||||||||
LIBOR floor | 0.00% | ||||||||
2018 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Letters of credit outstanding | 2,000,000 | ||||||||
2018 Credit Facility | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Term | 5 years | ||||||||
Debt maximum borrowing capacity | $ 60,000,000 | $ 50,000,000 | |||||||
Debt facility fee percentage | 0.50% | ||||||||
Debt outstanding | 657,000,000 | ||||||||
Increase in maximum borrowing capacity | $ 10,000,000 | ||||||||
2018 Credit Facility | Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt outstanding | 0 | 0 | |||||||
2018 Credit Facility | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 4.50% | ||||||||
2019 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Periodic payment, principal | 0 | ||||||||
Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Deferred financing costs | 35,400,000 | 38,500,000 | |||||||
Term Loan | $1.25 billion term loan (BCP I) | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 1,250,000,000 | 1,250,000,000 | |||||||
Term | 7 years | ||||||||
Principal payment as percent of initial principal amount | 0.25% | ||||||||
Stated percentage | 4.25% | ||||||||
Periodic payment, principal | 3,100,000 | ||||||||
Extinguishment of debt | 0 | 2,900,000 | |||||||
Debt outstanding | 1,172,292,000 | 1,175,417,000 | |||||||
Term Loan | $1.25 billion term loan (BCP I) | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||||
Term Loan | $690.0 million term loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 690,000,000 | ||||||||
Term | 7 years | ||||||||
Principal payment as percent of initial principal amount | 0.25% | ||||||||
Stated percentage | 4.75% | ||||||||
Periodic payment, principal | 1,700,000 | 1,700,000 | |||||||
Extinguishment of debt | 9,900,000 | $ 4,700,000 | |||||||
LIBOR floor | 0.00% | ||||||||
Term Loan | 2019 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 483,000,000 | ||||||||
Periodic payment, principal | 11,600,000 | ||||||||
Letters of credit outstanding | 0 | 0 | |||||||
Conversion date term commitments | $ 30,200,000 | ||||||||
Quarterly commitment fees as percent of applicable margin | 35.00% | ||||||||
Term Loan | 2019 Credit Facility | Firs Four Years | |||||||||
Debt Instrument [Line Items] | |||||||||
LIBOR floor | 1.00% | ||||||||
Effective percentage | 1.625% | ||||||||
Term Loan | 2019 Credit Facility | After Four Years | |||||||||
Debt Instrument [Line Items] | |||||||||
LIBOR floor | 1.00% | ||||||||
Effective percentage | 1.875% | ||||||||
Term Loan | 2019 Credit Facility | Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt maximum borrowing capacity | $ 32,400,000 | ||||||||
Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Deferred financing costs | $ 1,900,000 | $ 2,200,000 | |||||||
Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Current borrowing capacity | 800,000,000 | ||||||||
Debt maximum borrowing capacity | $ 1,500,000,000 | ||||||||
Debt facility fee percentage | 0.20% | ||||||||
Number of extension options | option | 2 | ||||||||
Extended financing agreement term | 1 year | ||||||||
Line of Credit | Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Current borrowing capacity | $ 100,000,000 | ||||||||
Line of Credit | Swingline Loan Subfacility | |||||||||
Debt Instrument [Line Items] | |||||||||
Current borrowing capacity | $ 100,000,000 | ||||||||
Line of Credit | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 1.05% | ||||||||
Line of Credit | Base Rate | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 0.05% |
DEBT AND FINANCING COSTS - Sche
DEBT AND FINANCING COSTS - Schedule of Long-Term Debt (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 22, 2017 |
Debt Instrument [Line Items] | |||
Total Long-term debt | $ 2,983,749,000 | $ 2,346,187,000 | |
Less: Deferred financing costs, net | (35,400,000) | (38,485,000) | |
Debt outstanding | 2,948,349,000 | 2,307,702,000 | |
Less: Current portion, net | (54,324,000) | (54,280,000) | |
Long-term debt, net | 2,894,025,000 | 2,253,422,000 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Less: Deferred financing costs, net | (35,400,000) | (38,500,000) | |
Term Loan | $1.25 billion term loan (BCP I) | |||
Debt Instrument [Line Items] | |||
Total Long-term debt | 1,172,292,000 | 1,175,417,000 | |
Face amount | 1,250,000,000 | $ 1,250,000,000 | |
Term Loan | $690 million term loan (BCP II) | |||
Debt Instrument [Line Items] | |||
Total Long-term debt | 627,695,000 | 639,393,000 | |
Face amount | 690,000,000 | ||
Term Loan | $513 million term loan (BCP PHP) | |||
Debt Instrument [Line Items] | |||
Total Long-term debt | 467,762,000 | 479,377,000 | |
Face amount | 513,000,000 | ||
Line of Credit | |||
Debt Instrument [Line Items] | |||
Less: Deferred financing costs, net | (1,900,000) | (2,200,000) | |
Line of Credit | $800 million revolving line of credit (Partnership) | |||
Debt Instrument [Line Items] | |||
Total Long-term debt | 657,000,000 | 0 | |
Debt maximum borrowing capacity | 800,000,000 | ||
Line of Credit | $125 million revolving line of credit (BCP I) | |||
Debt Instrument [Line Items] | |||
Total Long-term debt | 59,000,000 | $ 52,000,000 | |
Debt maximum borrowing capacity | $ 125,000,000 |
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, 2022 | Mar. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Capitalized interest | $ 104 | $ 211 |
Deferred financing costs | 3,389 | 3,305 |
Interest expense | 23,281 | 21,794 |
Total financing costs, net of capitalized interest | $ 26,774 | $ 25,310 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued product purchases | $ 168,324 | $ 118,364 |
Accrued taxes | 7,282 | 4,299 |
Accrued salaries, vacation, and related benefits | 3,657 | 2,113 |
Accrued capital expenditures | 4,608 | 2,995 |
Accrued interest expenses | 7,777 | 0 |
Accrued expense due to affiliate | 4,247 | 0 |
Accrued other expenses | 14,460 | 7,872 |
Accrued expenses | $ 210,355 | $ 135,643 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Feb. 22, 2022 | Jun. 11, 2019 | Mar. 31, 2022 | Dec. 31, 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 | |||
Consideration transferred | $ 3,900,000 | |||
Contingent liabilities | 800,000 | |||
Altus Midstream LP | Class A Common Stock | ||||
Loss Contingencies [Line Items] | ||||
Contingent liabilities | $ 4,500,000 | |||
Equity interest issuable (in shares) | 1,250,000 | |||
Altus Midstream LP | Class A Common Stock | Price Option One | ||||
Loss Contingencies [Line Items] | ||||
Equity interest issuable (in shares) | 625,000 | |||
Trading period | 30 days | |||
Stock price trigger (in dollars per share) | $ 280 | |||
Threshold trading days | 20 days | |||
Altus Midstream LP | Class A Common Stock | Price Option Two | ||||
Loss Contingencies [Line Items] | ||||
Equity interest issuable (in shares) | 625,000 | |||
Trading period | 30 days | |||
Stock price trigger (in dollars per share) | $ 320 | |||
Threshold trading days | 20 days | |||
Winter Storm Uri | ||||
Loss Contingencies [Line Items] | ||||
Outstanding receivable | $ 19,700,000 |
EQUITY METHOD INVESTMENTS - Inf
EQUITY METHOD INVESTMENTS - Information of Equity Method Investments (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | ||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method interests | $ 2,361,321,000 | $ 626,477,000 | ||
Difference between carrying amount and underlying equity | 418,300,000 | 0 | ||
Capitalized interest | 12,300,000 | 12,800,000 | ||
Movement In Equity Method Interests [Roll Forward] | ||||
Balance at December 31, 2021 | 626,477,000 | |||
Equity Method Investment, Acquisitions | 1,755,000,000 | |||
Distributions | (48,073,000) | |||
Equity income (loss), net | [1] | 27,917,000 | $ 11,355,000 | |
Balance at March 31, 2022 | $ 2,361,321,000 | |||
Gulf Coast Express Pipeline LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 16.00% | |||
Equity method interests | $ 465,028,000 | $ 0 | ||
Movement In Equity Method Interests [Roll Forward] | ||||
Balance at December 31, 2021 | 0 | |||
Equity Method Investment, Acquisitions | 470,000,000 | |||
Distributions | (8,412,000) | |||
Equity income (loss), net | 3,440,000 | |||
Balance at March 31, 2022 | 465,028,000 | |||
Amortization | $ 800,000 | |||
Permian Highway Pipeline LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 53.30% | 26.70% | ||
Equity method interests | $ 1,426,736,000 | $ 626,477,000 | ||
Movement In Equity Method Interests [Roll Forward] | ||||
Balance at December 31, 2021 | 626,477,000 | |||
Equity Method Investment, Acquisitions | 815,000,000 | |||
Distributions | (35,998,000) | |||
Equity income (loss), net | 21,257,000 | |||
Balance at March 31, 2022 | 1,426,736,000 | |||
Amortization | $ 1,300,000 | |||
Breviloba, LLC (Shin Oak) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 33.00% | |||
Equity method interests | $ 469,557,000 | $ 0 | ||
Movement In Equity Method Interests [Roll Forward] | ||||
Balance at December 31, 2021 | 0 | |||
Equity Method Investment, Acquisitions | 470,000,000 | |||
Distributions | (3,663,000) | |||
Equity income (loss), net | 3,220,000 | |||
Balance at March 31, 2022 | 469,557,000 | |||
Amortization | $ 100,000 | |||
EPIC Crude Holdings, LP | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 15.00% | |||
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
EQUITY METHOD INVESTMENTS - Sum
EQUITY METHOD INVESTMENTS - Summarized Financial Information of Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Schedule of Equity Method Investments [Line Items] | |||
Operating income | [1] | $ 19,065 | $ 31,554 |
Net income | [1] | 21,389 | 18,136 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Gulf Coast Express Pipeline LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 89,973 | 88,369 | |
Operating income | 63,443 | 60,108 | |
Net income | 63,529 | 59,768 | |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Permian Highway Pipeline LLC(1) | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 97,856 | 97,848 | |
Operating income | 59,476 | 42,580 | |
Net income | 59,213 | 42,580 | |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Breviloba, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 48,521 | 34,529 | |
Operating income | 26,314 | 17,300 | |
Net income | $ 26,366 | $ 17,359 | |
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
EQUITY AND WARRANTS (Details)
EQUITY AND WARRANTS (Details) | Apr. 20, 2022$ / shares | Mar. 31, 2022USD ($)$ / sharesshares | Mar. 31, 2022USD ($)$ / sharesshares | Feb. 23, 2022shares | Feb. 22, 2022$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares |
Class of Stock [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 66,200,000 | |||||||
Notice period to redeem warrants | 30 days | |||||||
Threshold trading days | 20 days | |||||||
Trading period | 30 days | |||||||
Derivatives fair value adjustment | $ | $ 0 | |||||||
Percent of distributions or dividends reinvested in newly issued Class A shares | 100.00% | |||||||
Number of shares receiving cash dividend (in shares) | 7,800,000 | 7,800,000 | ||||||
Common Units limited partners | ||||||||
Class of Stock [Line Items] | ||||||||
Equity, carrying amount | $ | $ 3,185,431,000 | $ 3,185,431,000 | $ 1,006,843,000 | $ 1,044,497,000 | $ 1,041,660,000 | |||
Class A Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued (in shares) | 18,986,460 | 18,986,460 | 0 | |||||
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, redemption ratio | 1 | |||||||
Common stock, shares outstanding (in shares) | 18,986,460 | 18,986,460 | 0 | |||||
Common stock | $ | $ 2,000 | $ 2,000 | $ 0 | |||||
Warrant exercise price (in USD per share) | $ / shares | $ 230 | $ 230 | ||||||
Percent of required investment | 20.00% | |||||||
Subsequent Event | Class A Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Dividends declared (in USD per share) | $ / shares | $ 1.50 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock redeemed (in shares) | 2,740,000 | |||||||
Stock price trigger (in dollars per share) | $ / shares | $ 360 | $ 360 | ||||||
Common Stock | Class A Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock redeemed (in shares) | 2,740,000 | |||||||
Common stock, shares outstanding (in shares) | 18,986,000 | 18,986,000 | 0 | 0 | ||||
Public Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Number of warrant outstanding (in shares) | 12,577,350 | 12,577,350 | ||||||
Redemption price of warrants (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||
Derivatives fair value adjustment | $ | $ 100,000 | |||||||
Private Placement Warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Number of warrant outstanding (in shares) | 6,364,281 | 6,364,281 | ||||||
Derivatives fair value adjustment | $ | $ 100,000 | |||||||
Altus Midstream LP | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued (in shares) | 50,000,000 | 50,000,000 | ||||||
The Partnership | Subsequent Event | ||||||||
Class of Stock [Line Items] | ||||||||
Distribution declared (in dollars per share) | $ / shares | $ 1.50 | |||||||
Apache | Private Placement Warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Number of warrant outstanding (in shares) | 3,182,140 | 3,182,140 |
SERIES A CUMULATIVE REDEEMABL_3
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Additional Information (Details) - USD ($) $ in Thousands | Mar. 28, 2022 | Feb. 22, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||||
Stock redeemed value | $ (170,060) | |||
Current liabilities | 388,637 | $ 240,925 | ||
Noncurrent liabilities | 3,116,676 | $ 2,305,433 | ||
Mandatory Redemption Feature | ||||
Class of Stock [Line Items] | ||||
Stock redeemed (in shares) | 150,000 | |||
Prior to Eighteen-Month Period | ||||
Class of Stock [Line Items] | ||||
Stock redeemed (in shares) | 50,000 | |||
Over Eighteen-Month Period | ||||
Class of Stock [Line Items] | ||||
Stock redeemed (in shares) | 150,000 | |||
Without Mandatory Redemption Feature | ||||
Class of Stock [Line Items] | ||||
Temporary Equity, Shares Outstanding | 375,000 | |||
Preferred Unit limited partners | ||||
Class of Stock [Line Items] | ||||
Number of Preferred Units sold (in shares) | 625,000 | |||
Stock redeemed (in shares) | 50,000 | 100,000 | ||
Stock redeemed value | $ 60,700 | $ 120,100 | ||
Shares outstanding (in shares) | 525,000 | |||
Current liabilities | 67,200 | |||
Noncurrent liabilities | $ 68,900 | |||
Temporary Equity, Shares Outstanding | 396,417 | 396,417 | ||
Preferred Unit limited partners | Mandatory Redemption Feature | ||||
Class of Stock [Line Items] | ||||
Stock redeemed (in shares) | 100,000 | |||
Preferred Unit limited partners | Must be Redeemed by February 22, 2023 | ||||
Class of Stock [Line Items] | ||||
Stock redeemed (in shares) | 50,000 | |||
Preferred Unit limited partners | Without Any dollar-Value Threshold | ||||
Class of Stock [Line Items] | ||||
Stock redeemed (in shares) | 25,000 | |||
Paid-in-Kind Units | ||||
Class of Stock [Line Items] | ||||
Stock redeemed (in shares) | 2,856 | |||
Shares outstanding (in shares) | 29,983 |
SERIES A CUMULATIVE REDEEMABL_4
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Activity Related to Preferred Units (Details) - USD ($) $ in Thousands | Mar. 28, 2022 | Feb. 22, 2022 | Mar. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Beginning balance | $ 0 | |||||
Ending balance | $ 460,773 | 460,773 | ||||
Embedded derivative liability | $ 91,936 | $ 91,936 | $ 0 | |||
Paid-in-kind (in shares) | 21,417 | |||||
Stock redeemed value | $ (170,060) | |||||
With Initial Rate of Return | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Stock redeemed value | $ 700,000 | |||||
Preferred Unit limited partners | ||||||
Movement In Preferred Units [Roll Forward] | ||||||
Redeemable noncontrolling interest - Preferred Units: beginning of period (in shares) | 396,417 | |||||
Redeemable noncontrolling interest - Preferred Units: end of period (in shares) | 396,417 | 396,417 | 396,417 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Beginning balance | $ 462,717 | |||||
Distribution payable to Preferred Unit limited partners | (6,937) | $ (6,937) | [1] | |||
Allocation of net income | 4,993 | |||||
Ending balance | $ 462,717 | 460,773 | 460,773 | |||
Embedded derivative liability | 91,936 | 91,936 | ||||
Redeemable noncontrolling interest, including embedded derivative liability | $ 552,709 | $ 552,709 | ||||
Redemption, internal rate of return | 11.10% | 11.10% | ||||
Stock redeemed value | $ 60,700 | $ 120,100 | ||||
[1] | Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to the Condensed Consolidated Financial Statements. |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands | Feb. 22, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Feb. 23, 2022 | Dec. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation | $ (6,132) | $ 0 | |||
New Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issued (in shares) | 38,000 | ||||
Altus Midstream LP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares issued (in shares) | 50,000,000 | 50,000,000 | |||
Class A Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares issued (in shares) | 18,986,460 | 0 | |||
Share-based compensation | $ (6,100) | $ 0 | |||
Class A Common Stock | Class A-1 and Class A-2 Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock issued for exchange | 2,650,000 | ||||
Class A Common Stock | Class A-3 Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock issued for exchange | 163,000 |
INCOME TAXES - Total Provision
INCOME TAXES - Total Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Current tax expense: | |||
Federal | $ 0 | $ 0 | |
State and local | 0 | 0 | |
Total current tax expense | 0 | 0 | |
Deferred tax expense: | |||
Federal | 0 | 0 | |
State and Local | 676 | 0 | |
Total deferred tax expense | 676 | 0 | |
Total income tax expense | [1] | $ 676 | $ 0 |
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Tax of Income Before Income Taxes and Total Tax Expense (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax [Line Items] | |
U.S. statutory rate | 21.00% |
State tax rate | 3.10% |
Other | 0.20% |
Valuation allowance | (4.50%) |
Effective rate | 3.10% |
Common Units limited partners | |
Income Tax [Line Items] | |
Tax attributable to Noncontrolling interest | (11.60%) |
Preferred Unit limited partners | |
Income Tax [Line Items] | |
Tax attributable to Noncontrolling interest | (5.10%) |
INCOME TAXES - Reconciliation_2
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance as of January 1, 2022 | $ 0 |
Increase related to ALTM acquisition | 5,238 |
Reduction related to current year activities | (228) |
Balance as of March 31, 2022 | $ (5,010) |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Basic: | |||
Net income attributable to Class A common shareholders | [1] | $ 3,865 | $ 0 |
Net income attributable to Class A common shareholders (in shares) | [1] | 18,696,000 | 0 |
Net income attributable to Class A common shareholders (in USD per share) | [1] | $ 0.21 | $ 0 |
Effect of dilutive securities: | |||
Replacement Awards | $ 0 | $ 0 | |
Replacement Awards (in shares) | 17,000 | 0 | |
Replacement Awards (in dollars per share) | $ 0 | $ 0 | |
Diluted: | |||
Net income attributable to Class A Common Shareholders | $ 3,865 | $ 0 | |
Net income (loss) attributable to Class A common shareholders (in shares) | [1] | 18,713,000 | 0 |
Net income (loss) attributable to Class A common shareholders (in USD per share) | [1] | $ 0.21 | $ 0 |
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Total assets | $ 9,700 | |
Liabilities | ||
Total liabilities | 7 | $ 2,700 |
Mandatorily redeemable Preferred Units | 67,173 | 0 |
Embedded derivative liabilities | 91,936 | 0 |
Warrants outstanding, fair value | 200 | |
Fair Value, Measurements, Recurring | ||
Assets | ||
Total assets | 9,655 | |
Liabilities | ||
Total liabilities | 228,234 | 2,867 |
Fair Value, Measurements, Recurring | Public Warrants | ||
Liabilities | ||
Warrants outstanding, fair value | 126 | |
Fair Value, Measurements, Recurring | Private Placement Warrant | ||
Liabilities | ||
Warrants outstanding, fair value | 95 | |
Fair Value, Measurements, Recurring | Commodity swaps | ||
Liabilities | ||
Total liabilities | 205 | |
Fair Value, Measurements, Recurring | Interest rate derivatives | ||
Assets | ||
Total assets | 9,655 | |
Liabilities | ||
Total liabilities | 7 | 2,662 |
Fair Value, Measurements, Recurring | Mandatorily redeemable Preferred Units | ||
Liabilities | ||
Mandatorily redeemable Preferred Units | 136,070 | |
Fair Value, Measurements, Recurring | Embedded derivative | ||
Liabilities | ||
Embedded derivative liabilities | 91,936 | |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets | ||
Total assets | 0 | |
Liabilities | ||
Total liabilities | 126 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Public Warrants | ||
Liabilities | ||
Warrants outstanding, fair value | 126 | |
Fair Value, Measurements, Recurring | Level 1 | Private Placement Warrant | ||
Liabilities | ||
Warrants outstanding, fair value | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Commodity swaps | ||
Liabilities | ||
Total liabilities | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Interest rate derivatives | ||
Assets | ||
Total assets | 0 | |
Liabilities | ||
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Mandatorily redeemable Preferred Units | ||
Liabilities | ||
Mandatorily redeemable Preferred Units | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Embedded derivative | ||
Liabilities | ||
Embedded derivative liabilities | 0 | |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets | ||
Total assets | 9,655 | |
Liabilities | ||
Total liabilities | 7 | 2,867 |
Fair Value, Measurements, Recurring | Level 2 | Public Warrants | ||
Liabilities | ||
Warrants outstanding, fair value | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Private Placement Warrant | ||
Liabilities | ||
Warrants outstanding, fair value | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Commodity swaps | ||
Liabilities | ||
Total liabilities | 205 | |
Fair Value, Measurements, Recurring | Level 2 | Interest rate derivatives | ||
Assets | ||
Total assets | 9,655 | |
Liabilities | ||
Total liabilities | 7 | 2,662 |
Fair Value, Measurements, Recurring | Level 2 | Mandatorily redeemable Preferred Units | ||
Liabilities | ||
Mandatorily redeemable Preferred Units | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Embedded derivative | ||
Liabilities | ||
Embedded derivative liabilities | 0 | |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets | ||
Total assets | 0 | |
Liabilities | ||
Total liabilities | 228,101 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Public Warrants | ||
Liabilities | ||
Warrants outstanding, fair value | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Private Placement Warrant | ||
Liabilities | ||
Warrants outstanding, fair value | 95 | |
Fair Value, Measurements, Recurring | Level 3 | Commodity swaps | ||
Liabilities | ||
Total liabilities | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Interest rate derivatives | ||
Assets | ||
Total assets | 0 | |
Liabilities | ||
Total liabilities | 0 | $ 0 |
Fair Value, Measurements, Recurring | Level 3 | Mandatorily redeemable Preferred Units | ||
Liabilities | ||
Mandatorily redeemable Preferred Units | 136,070 | |
Fair Value, Measurements, Recurring | Level 3 | Embedded derivative | ||
Liabilities | ||
Embedded derivative liabilities | $ 91,936 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2022USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivatives settlement | [1] | $ 2,886,000 | $ 0 | |
Warrants outstanding, fair value | $ 200,000 | $ 200,000 | ||
Change in fair value of warrants | $ 0 | |||
Level 3 | Risk Free Interest Rate | Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Embedded derivative liability, measurement input | 0.0732 | 0.0732 | ||
Level 3 | Risk Free Interest Rate | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Embedded derivative liability, measurement input | 0.1158 | 0.1158 | ||
Level 3 | Interest Rate Volatility | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Embedded derivative liability, measurement input | 0.3979 | 0.3979 | ||
Expected timing until exercise of exchange option | 4 years 2 months 12 days | |||
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
DERIVATIVES AND HEDGING ACTIV_2
DERIVATIVES AND HEDGING ACTIVITIES (Details) | 3 Months Ended | |||
Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Sep. 30, 2019USD ($)instrument | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Debt outstanding | $ 2,983,749,000 | $ 2,346,187,000 | ||
Derivative liability | 7,000 | 2,700,000 | ||
Derivative asset | 9,700,000 | |||
Derivative cash settlement | 884,000 | $ 1,465,000 | ||
Term Loan | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Debt outstanding | $ 513,000,000 | |||
Interest Rate Swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Number of instruments held | instrument | 2 | |||
Derivative cash settlement | 900,000 | 600,000 | ||
Unrealized gains | 11,600,000 | |||
Unrealized losses | $ (10,600,000) | |||
Interest Rate Swap | Minimum | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Basis spread on variable rate | 1.76% | |||
Interest Rate Swap | Maximum | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Basis spread on variable rate | 1.78% | |||
Interest Rate Swap | Term Loan | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Percent under notional amount | 75.00% | |||
Percent of debt outstanding covered by notional Amount | 75.00% | |||
Commodity Swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative liability | $ 0 | $ 200,000 |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022USD ($)Segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | ||
Segment Reporting [Abstract] | ||||
Number of operating segments | Segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Net income including noncontrolling interests | [1] | $ 21,389 | $ 18,136 | |
Gain on redemption of mandatorily redeemable Preferred Units | [1] | 4,493 | 0 | |
Income tax expense (benefit) | [1] | 676 | 0 | |
Depreciation and amortization expense | [1] | 61,023 | 55,971 | |
Share-based compensation | 6,132 | 0 | ||
Loss on disposal of assets | [1] | 110 | 32 | |
Loss on debt extinguishment | 129 | (239) | ||
Derivatives settlement | [1] | 2,886 | 0 | |
Interest and other income | [1] | 250 | 537 | |
Equity in (earnings) losses from unconsolidated affiliate | [1] | (27,917) | (11,355) | |
Assets | 6,013,657 | $ 3,553,206 | ||
Product and Service | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 255,373 | 147,655 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Assets | 6,007,946 | 3,552,558 | ||
Operating Segments | Midstream Logistics | ||||
Segment Reporting Information [Line Items] | ||||
Net income including noncontrolling interests | 9,185 | 8,194 | ||
Interest expense (income) | 26,642 | 27,694 | ||
Gain on redemption of mandatorily redeemable Preferred Units | 0 | |||
Income tax expense (benefit) | 457 | |||
Depreciation and amortization expense | 60,893 | 55,842 | ||
Contract assets amortization | 448 | 448 | ||
Proportionate EMI EBITDA | 0 | 0 | ||
Share-based compensation | 0 | |||
Loss on disposal of assets | 110 | 32 | ||
Loss on debt extinguishment | 129 | (239) | ||
Derivatives settlement | 0 | (13,456) | ||
Integration costs | 4,104 | |||
Acquisition transaction costs | 4 | |||
Other one-time costs or amortization | 918 | 389 | ||
Interest and other income | 16 | |||
Equity in (earnings) losses from unconsolidated affiliate | 0 | 0 | ||
Segment adjusted EBITDA | 102,890 | 105,800 | ||
Revenue from contract with customer | 257,247 | 148,101 | ||
Assets | 3,624,556 | 2,916,774 | ||
Operating Segments | Midstream Logistics | Product and Service | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 255,373 | 147,655 | ||
Operating Segments | Midstream Logistics | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 1,874 | 446 | ||
Operating Segments | Pipeline Transportation | ||||
Segment Reporting Information [Line Items] | ||||
Net income including noncontrolling interests | 29,136 | 12,429 | ||
Interest expense (income) | (1,614) | (2,145) | ||
Gain on redemption of mandatorily redeemable Preferred Units | 0 | |||
Income tax expense (benefit) | (39) | |||
Depreciation and amortization expense | 130 | 129 | ||
Contract assets amortization | 0 | 0 | ||
Proportionate EMI EBITDA | 40,741 | 16,256 | ||
Share-based compensation | 0 | |||
Loss on disposal of assets | 0 | 0 | ||
Loss on debt extinguishment | 0 | 0 | ||
Derivatives settlement | 0 | 0 | ||
Integration costs | 0 | |||
Acquisition transaction costs | 0 | |||
Other one-time costs or amortization | 0 | 8 | ||
Interest and other income | 0 | |||
Equity in (earnings) losses from unconsolidated affiliate | 27,917 | 11,355 | ||
Segment adjusted EBITDA | 40,437 | 15,322 | ||
Revenue from contract with customer | 2 | 2 | ||
Assets | 2,383,390 | 635,784 | ||
Operating Segments | Pipeline Transportation | Product and Service | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 0 | 0 | ||
Operating Segments | Pipeline Transportation | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 2 | 2 | ||
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Net income including noncontrolling interests | (16,932) | (2,487) | ||
Interest expense (income) | 1,617 | 0 | ||
Gain on redemption of mandatorily redeemable Preferred Units | (4,493) | |||
Income tax expense (benefit) | 258 | |||
Depreciation and amortization expense | 0 | 0 | ||
Contract assets amortization | 0 | 0 | ||
Proportionate EMI EBITDA | 0 | 0 | ||
Share-based compensation | 6,132 | |||
Loss on disposal of assets | 0 | 0 | ||
Loss on debt extinguishment | 0 | 0 | ||
Derivatives settlement | 2,886 | 0 | ||
Integration costs | 2,047 | |||
Acquisition transaction costs | 5,672 | |||
Other one-time costs or amortization | 277 | (69) | ||
Interest and other income | 0 | |||
Equity in (earnings) losses from unconsolidated affiliate | 0 | 0 | ||
Segment adjusted EBITDA | (2,536) | (2,556) | ||
Revenue from contract with customer | 0 | 0 | ||
Assets | 5,711 | $ 648 | ||
Corporate and Other | Product and Service | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 0 | 0 | ||
Corporate and Other | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 0 | 0 | ||
Consolidated | ||||
Segment Reporting Information [Line Items] | ||||
Net income including noncontrolling interests | 21,389 | 18,136 | ||
Interest expense (income) | 26,645 | 25,549 | ||
Gain on redemption of mandatorily redeemable Preferred Units | (4,493) | |||
Income tax expense (benefit) | 676 | |||
Depreciation and amortization expense | 61,023 | 55,971 | ||
Contract assets amortization | 448 | 448 | ||
Proportionate EMI EBITDA | 40,741 | 16,256 | ||
Share-based compensation | 6,132 | |||
Loss on disposal of assets | 110 | 32 | ||
Loss on debt extinguishment | 129 | (239) | ||
Derivatives settlement | 2,886 | (13,456) | ||
Integration costs | 6,151 | |||
Acquisition transaction costs | 5,676 | |||
Other one-time costs or amortization | 1,195 | 328 | ||
Interest and other income | 16 | |||
Equity in (earnings) losses from unconsolidated affiliate | 27,917 | 11,355 | ||
Segment adjusted EBITDA | 140,791 | 118,566 | ||
Revenue from contract with customer | 257,249 | 148,103 | ||
Consolidated | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | $ 1,876 | $ 448 | ||
[1] | The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies, for further information on the Company’s basis of presentation. |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - $ / shares | Apr. 20, 2022 | Apr. 04, 2022 |
The Partnership | ||
Subsequent Event [Line Items] | ||
Distribution declared (in dollars per share) | $ 1.50 | |
Class A Common Stock | ||
Subsequent Event [Line Items] | ||
Common stock reserved for future issuance, dividend reinvestment plan (in shares) | 15,000,000 | |
Dividends declared (in USD per share) | $ 1.50 |