KNTK, Kinetik Holdings Inc.

Will it survive?

• Can it pay its interest? —
  Interest expense not tagged in the data
  What this means

  No usable interest-expense line was tagged in the filing data, but the balance sheet carries real net debt — so the interest burden here is unknown, not absent. Read the debt on the net-debt check below.

• How heavy is the debt, net of cash? $3.8B · 23.1× operating profit
  Heavy net debt
  Cash $4M − debt $3.8B
  What this means

  Netting $4M of cash and short-term investments against $3.8B of debt leaves $3.8B owed, about 23.1× a year's operating profit (23.2× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

Is it a good business?

• Return on invested capital 3%
  Below average through the cycle
  8-yr median, range -254%–25%; 4% latest = NOPAT $128M ÷ invested capital $3.2B
  Industry peers: median 6%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 8 years (it ran 4% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin 17%
  High through the cycle
  8-yr median margin, range -25%–34%; latest $221M = operating cash $604M − maintenance capex $383M
  Industry peers: median 18%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 13% of revenue this year, a 17% median across 8 years. It chose to put $110M more into growth, so free cash flow this year was $112M — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $63M of SBC) leaves $159M.

• Are earnings backed by cash? 3.39×
  Cash-backed
  Cash from ops $604M ÷ net income $178M
  What this means

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? 167%
  Returned more than it generated
  Dividends + buybacks $370M ÷ Owner Earnings $221M — this fiscal year
  What this means

  The company returned more than it generated: against $221M of Owner Earnings, $370M (167%) went back to shareholders, $194M dividends, $176M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $63M stock comp, the real buyback was about $113M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands. This year's proportion is 167%; across the record (2017–2025) it is 49%, the capital-allocation section below.

• Investing or harvesting? 1.29×
  Expanding
  Capex $492M ÷ depreciation & amortization as filed $383M
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

The promise and the pay packet

• Is the buyback buying ownership, or mopping up? 3.5%
  Stock pay, share count unread
  Stock compensation $63M (fiscal 2025), 3.5% of revenue · repurchases $176M · the share count is not comparable across these years (a split or a first listing sits in the record), so the drift is withheld
  What this means

  Stock handed to employees is a real cost paid in the owner's own currency: it is charged against profit, but the shares it creates are permanent. Many companies repurchase stock at the same time, which looks like a return of capital and often is not — if the count barely moves, the cash merely cancelled the pay packet and bought the owner nothing. The three states worth telling apart are a count genuinely shrinking, a count standing still despite large repurchases, and a count rising because the issuance was never offset at all.

Graham’s defensive tests · 0 of 3 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

• Adequate size Near
  Revenue ≥ $2B · $1.8B
  What this means

  Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.

• Strong liquidity —
  Current ratio ≥ 2× (waived for utilities) · exempt
  What this means

  Graham exempted public utilities from this test: their working capital “takes care of itself” through the continuous bond-and-share financing of growth, so a thin current ratio is the industry's structure, not a warning. His substitute test — debt no more than twice book equity — is the next line.

• Conservative debt —
  Debt ≤ 2× equity (Graham's utility test) · —
  What this means

  Equity or total debt is not readable in the structured data this year, so Graham's utility debt test can't be run honestly.

• Earnings stability Miss
  A profit every year (9-yr record) · 5 loss years
  What this means

  Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

• Dividend record Miss
  Uninterrupted dividends · 4 of 9 yrs
  What this means

  An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.

• Earnings growth —
  Earnings +33% over the record · —
  What this means

  Earnings were negative early in the record, a growth rate isn't meaningful.

• Moderate price —
  P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
  What this means

  Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $2.59/share (latest year $2.53), the averaged base the calculator's gate runs on, and book value is $-8.01/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2025

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 4 of 9
  What this means

  Lost money in 5 year(s), look at what happened there before trusting the average.

• Return on capital ≥ 15% 1 of 7 yrs
  What this means

  A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

• Operating margin −346% → 11% (3-yr avg ends)

  In the filing’s words The filing ties gains to its own pricing, but names price competition too — pricing power that is real yet contested, not unopposed. The margin shows who is winning.

  What this means

  Through the cycle the operating margin widened — about −346% early to 11% lately, median 8% — pricing power intact or improving.

• Reinvestment, incremental ROIC 41%
  What this means

  Every extra dollar the business reinvested came back at a high incremental return — the lens GBM read for a moat that reinvests rather than merely harvests. The record and the 10-K are where you check whether the rate holds.

• Worst year 2019 · −946.8% op. margin
  What this means

  Operations went underwater in 2019, understand why before trusting the good years.

• Share count +0.1%/yr
  What this means

  Roughly flat share count, little dilution, little buyback.

• Dividend record rising
  What this means

  Paid and raised the dividend across the record, the continuity Graham prized.