KINDER MORGAN, INC. (KMI)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered solid operational performance: Revenue rose to $4.241B (+10.4% YoY), GAAP EPS was $0.32 (-3% YoY), Adjusted EPS held flat at $0.34, and Adjusted EBITDA was $2.157B (+1% YoY) .
• Versus Wall Street consensus, revenue beat, EPS missed, and Adjusted EBITDA was modestly below: revenue $4.241B vs $4.026B*, EPS $0.32 vs $0.357*, Adjusted EBITDA $2.157B vs $2.170B*; management emphasized robust gas demand drivers and tariff mitigation measures (see Estimates Context) .
• Backlog increased nearly 8% QoQ to $8.8B (91% natural gas), with the $431M “Bridge” project adding 325 MMcf/d in South Carolina; KMI expects to exceed its 2025 budget by at least the Outrigger acquisition contribution .
• Key call themes: LNG feedgas demand setting records, power and AI-related gas demand pipeline, permitting acceleration, and limited tariff impact (estimated ~1% of project costs on two-thirds of backlog) .
• Dividend raised 2% YoY to $0.2925/share ($1.17 annualized) for Q1; leverage at 4.1x Net Debt-to-Adjusted EBITDA with balance sheet positioned to fund growth internally .

What Went Well and What Went Wrong

What Went Well

• Natural Gas Pipelines, CO2, and Terminals delivered higher contributions YoY; Texas Intrastate and TGP were key drivers in gas, and Jones Act tanker rates supported Terminals .
• Backlog grew to $8.8B (+$900M additions net of ~$225M in-service), with 91% in natural gas and the “Bridge” project (325 MMcf/d) backed by long-term contracts, reinforcing multi-year growth visibility .
• Management reiterated resilience: “almost 2/3 of EBITDA is take-or-pay… ~30% fee-based or hedged, only ~5% exposed to commodity prices,” supporting stable cash generation through turbulence .

What Went Wrong

• Products Pipelines contributions declined due to a planned 10-year turnaround at the condensate processing facility and lower commodity prices; refined products volumes were +2% YoY but mix and turnaround weighed on segment EBDA .
• Natural gas gathering volumes fell 6% YoY (Haynesville weakness); management expects recovery later in 2025 with higher prices and storage refill/LNG ramp, but Q1 sequential gathering volumes were down 2% .
• GAAP EPS fell 3% YoY (to $0.32) largely due to unsettled hedge mark-to-market treated as Certain Items; Adjusted net income increased 1% YoY, but headline EPS optics were softer .

Financial Results

Consolidated metrics vs prior year and prior quarter

Segment breakdown (Adjusted Segment EBDA)

Operating KPIs

Guidance Changes

Notes: Management highlighted tariff mitigation actions and permitting acceleration that could allow earlier in-service dates for portions of projects, potentially supporting the upward bias to 2025 outcomes .

Earnings Call Themes & Trends

Management Commentary

• “Our company is largely insulated against temporary volatility… a safe haven during the storm.” — Executive Chairman Richard D. Kinder .
• “We currently expect to exceed budget by at least the contributions from the Outrigger acquisition.” — CEO Kim Dang .
• “For these projects, we have locked in the cost of the finished steel pipe and less than 10% is exposed to tariffs.” — CEO Kim Dang .
• “Natural gas transport volumes were up 3%… primarily due to LNG and power plant deliveries on TGP.” — President Tom Martin .

Q&A Highlights

• Utilities/data centers: Active pipeline of opportunities across the Southern U.S.; ~70% of new backlog power-related; Kinder sees platform growth potential with Bridge in South Carolina .
• Arizona/Southwest: Both brownfield and greenfield under evaluation; EPNG is full; multiple demand drivers including Mexico power and West Coast LNG .
• Macro/WTI softness: Limited EPS exposure due to contract mix; gathering ~8% of EBITDA; Haynesville conversations turning more bullish with potential rig adds later in 2025 .
• LNG feedgas and Trident: Pursuing supply to new FIDs and diversification for existing systems; Trident progress suggests possible scale expansion updates in coming quarters .
• Permitting: Filing may accelerate timing by up to 5 months; administration/apparatus broadly supportive; potential to phase-in portions earlier .

Estimates Context

Commentary: Revenue outperformed on strong Texas intrastate/TGP capacity sales and higher RNG/Jones Act contributions, while EPS missed on unsettled hedge mark-to-market Certain Items and weaker gathering volumes; product turnaround also weighed near-term optics .

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

• Multi-year growth visibility: Backlog up to $8.8B with 91% in natural gas; Bridge, SSE4, Trident, MSX, GCX and Evangeline Pass provide clear catalysts through 2027–2030 .
• Demand tailwinds intact: LNG feedgas setting records; sizable power/AI-related gas demand pipeline; management expects to exceed 2025 budget at least by Outrigger contribution .
• Resilient cash flow profile: ~2/3 EBITDA take-or-pay, ~30% fee/hedged, ~5% commodity-exposed; dividend raised to $0.2925; leverage 4.1x within target range .
• Tariff risk mitigated: Domestic steel procurement and early orders limit tariff exposure (~1% of project cost on two-thirds of backlog); permitting relief could pull forward in-service dates .
• Near-term puts/takes: Gathering volumes soft (Haynesville), products impacted by turnaround; expect gathering improvement later in 2025 with supportive price/storage/LNG dynamics .
• Estimate implications: Revenue likely revised higher; EPS/EBITDA consensus may recalibrate for hedge Certain Items, turnaround impacts, and timing of expansion ramps*.
• Trading lens: Positive backlog/permit cadence and LNG/power demand are upward catalysts; watch tariff headlines and gathering recovery pace for sentiment inflection .

Values with asterisks retrieved from S&P Global.