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KM

KINDER MORGAN, INC. (KMI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid results: revenue rose 12.1% YoY to $4.146B, Adjusted EPS increased 16% YoY to $0.29, and Adjusted EBITDA grew 6% YoY to $1.991B, with strength in Natural Gas, Products, and Terminals; GAAP EPS was flat at $0.28 .
  • Versus Wall Street, revenue beat consensus ($4.146B vs $3.961B*; Beat), EPS was broadly in line ($0.29 vs $0.298*), and reported Adjusted EBITDA was slightly below S&P consensus ($1.991B vs $1.999B*; essentially in-line) .
  • Management reiterated expectations to exceed the 2025 budget, primarily on Outrigger contributions, while noting headwinds from weak D3 RIN prices/volumes; dividend maintained at $0.2925 per share (2% YoY increase) .
  • Strategic catalysts: expanding LNG feedgas contracts (to ~12 Bcf/d by end-2028), strong natural gas power generation opportunity (>10 Bcf/d in development), and a $9.3B project backlog (~90% natural gas) with first-full-year project multiples ~5.7x supporting medium-term EBITDA/EPS growth .

What Went Well and What Went Wrong

What Went Well

  • Natural Gas volumes and earnings up: transport volumes +6% YoY, gathering volumes +9% YoY; segment Adjusted EBDA rose to $1.403B from $1.271B, supported by TGP, Texas Intrastate, El Paso to Waha/Mexico, and Outrigger contributions .
  • Terminals strength: Jones Act fleet fully contracted and benefiting from higher rates; Terminals Adjusted EBDA increased to $274M from $267M YoY; liquids utilization remained high at ~94.6% .
  • Strategic outlook and regulatory tailwinds: management emphasized “exceptionally promising” demand outlook driven by LNG and AI-power needs; backlog at $9.3B (~90% natural gas) and supportive federal permitting enhance project execution confidence . Quote: “The outlook for our company is exceptionally promising” — Executive Chairman Richard D. Kinder .

What Went Wrong

  • CO2/ETV softness: segment earnings declined YoY due to lower crude and CO2 volumes and lower CO2 and D3 RIN prices; CO2 Adjusted EBDA fell to $136M from $160M .
  • Products volumes modestly weaker YoY: total refined product volumes -1% YoY and crude/condensate -3%, impacted by legacy contract expirations ahead of Double H NGL conversion; partially offset by higher transport rates .
  • RNG/D3 RIN headwind vs prior guidance pace: management acknowledged outperformance would have been greater but for weak D3 RIN prices/volumes; RNG volumes closer to budget but prices remain weak .

Financial Results

Consolidated Performance vs Prior Periods and Estimates

MetricQ3 2024Q2 2025Q3 2025YoY ΔQoQ Δvs Consensus
Revenue ($USD Billions)$3.699 $4.042 $4.146 +12.1%+2.6%$3.961*; Beat
GAAP EPS ($)$0.28 $0.32 $0.28 0%-12.5%$0.298*; Inline
Adjusted EPS ($)$0.25 $0.28 $0.29 +16.0%+3.6%—
Operating Income ($USD Billions)$1.015 $1.152 $1.063 +4.7%-7.7%—
Net Income Attributable to KMI ($USD Millions)$625 $715 $628 +0.5%-12.2%—
Adjusted EBITDA ($USD Billions)$1.880 $1.972 $1.991 +5.9%+1.0%$1.999*; Inline

Note: Asterisk (*) denotes S&P Global estimates. Values retrieved from S&P Global.

Segment Adjusted EBDA (Earnings Before DD&A, etc.)

Segment Adjusted EBDA ($USD Millions)Q3 2024Q3 2025
Natural Gas Pipelines$1,271 $1,403
Products Pipelines$276 $288
Terminals$267 $274
CO2 (incl. ETV)$160 $136

Selected KPIs

KPIQ3 2024Q3 2025
Natural Gas Transport Volumes (BBtu/d)44,827 47,461
Natural Gas Gathering Volumes (BBtu/d)4,005 4,380
Total Refined Product Volumes (MBbl/d)1,675 1,652
Crude & Condensate Volumes (MBbl/d)472 459
Liquids Utilization (%)94.9% 94.6%
CO2 Sales Volumes (Bcf/d)0.319 0.274
RNG Sales Volumes (BBtu/d)10 11

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
Net Income Attributable to KMI ($B)FY 2025$2.8; up 8% vs 2024 $2.8; up 8% vs 2024 Maintained
Adjusted EPS ($)FY 2025$1.27; up 10% vs 2024 $1.27; up 10% vs 2024 Maintained (expect to exceed)
Adjusted EBITDA ($B)FY 2025$8.3; up 4% vs 2024 $8.3; up 4% vs 2024 Maintained (expect to exceed)
Net Debt / Adjusted EBITDA (x)YE 20253.8x 3.8x Maintained
Dividend ($/share)FY 2025$1.17 $1.17 Maintained
Qualitative UpdateFY 2025Expect to exceed budget by at least Outrigger contribution Expect to exceed budget primarily due to Outrigger; outperformance tempered by lower D3 RIN prices/volumes Minor tone shift (RIN headwind)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q1 2025)Current Period (Q3 2025)Trend
LNG feedgas growthContracts to ~12 Bcf/d by end-2028; backlog +$1.3B; ~93% natural gas Contracts to ~11 Bcf/d by end-2027; backlog $8.8B; ~91% natural gas Reinforced ~12 Bcf/d by end-2028; LNG capacity expected to more than double by 2030 Strengthening
AI/data center powerTailwind; >5 Bcf/d opportunities; supportive IRPs Active power market expansions; Tejas expansion 350 MMcf/d Significant demand driver alongside LNG; KMI pursuing >10 Bcf/d opportunities; behind-the-meter investment unlikely Increasing focus
Tariffs/macroEstimated ~1% project cost impact; mitigated by preordering/domestic steel Less than 10% exposed; mitigations in place Not highlighted as a key headwind in Q3 [—]Stabilizing
Storage needsCapacity and expansion opportunities rising 700+ Bcf working gas storage provides edge Heightened customer need for storage; exploring expansions/greenfield Rising
Regulatory/permittingFERC process improving; 871 elimination shortens cycle Brownfield expansions emphasized in South System projects “Supportive federal regulatory process” aiding on-time/on-budget execution Supportive
RNG/D3 RINLower prices; volumes up QoQ Higher RNG volumes; lower D3 RIN prices Weak RIN prices remain a headwind; volumes closer to budget Persistent headwind

Management Commentary

  • Strategic positioning: “We are firmly in an era of American global energy leadership… The outlook for our company is exceptionally promising” — Executive Chairman Richard D. Kinder .
  • Long-term demand drivers: “AI data center needs will supplement in a very meaningful way the tremendous increases in LNG feed gas demand… ensure a huge and growing market for natural gas” — Executive Chairman Rich Kinder .
  • Growth pipeline: “Our expansion backlog remains flat at $9.3 billion… The mix of new projects added… roughly 50% natural gas (power) and 50% refined product tankage. We’re actively pursuing over $10 billion in potential projects” — CEO Kim Dang .
  • Financial discipline: “Net debt-to-adjusted EBITDA improved to 3.9x… rating agencies have recognized our strength; Fitch upgraded to BBB+ in August” — CFO David Michels .
  • Business mix and risk: “Base business is relatively flat; capital projects will drive substantial growth in EBITDA and EPS for years to come” — Executive Chairman Rich Kinder .

Q&A Highlights

  • Opportunity set and cadence: Management is actively engaging customers on ~$10B in unsanctioned projects; mostly natural gas (LNG, power), spread across AZ/TX/NM/FL; some >$1B, many < $250M; expect a significant project to reach FID in 2026 .
  • Western Gateway pipeline JV: Proposed refined products pipeline with Phillips 66; access to multiple markets (AZ, CA, Las Vegas), 50/50 JV structure; regulatory approvals needed; targeted in-service 2029; competitive positioning highlighted vs Oneok’s Sunbelt .
  • Behind-the-meter stance: KMI does not plan to invest in power generation behind the meter; focus remains on gas infrastructure, potentially facilitating supply with partners .
  • Basin updates: Hainesville approaching record daily volumes; 15% QoQ volume ramp; $500M KinderHawk investment to add gathering/trading capacity; Appalachia egress potential “north of half a Bcf” under evaluation .
  • Permitting cycle and financing: Shorter regulated project cycles with FERC changes; ample balance sheet capacity and potential third-party capital to fund elevated CapEx without compromising leverage .

Estimates Context

  • Q3 2025 EPS: $0.29 actual vs $0.298* consensus; essentially in line.
  • Q3 2025 Revenue: $4.146B actual vs $3.961B* consensus; Beat.
  • Q3 2025 Adjusted EBITDA: $1.991B reported vs $1.999B* consensus; essentially in line.
  • Estimate depth: 11 EPS estimates; 6 revenue estimates*.
    Values retrieved from S&P Global. Actuals sourced from the company’s 8-K .

Key Takeaways for Investors

  • The revenue beat and double-digit Adjusted EPS growth underpin a constructive near-term setup; traders can lean into LNG/power narratives as catalysts, with limited GAAP EPS volatility from “Certain Items” this quarter .
  • Medium-term thesis: ~$9.3B backlog (~90% natural gas) with ~5.7x first-full-year project multiples and supportive permitting points to EBITDA/EPS compounding from 2026–2029 .
  • Balance sheet and ratings trajectory improve flexibility: net debt/Adj EBITDA at 3.9x; Fitch upgrade to BBB+; rising capacity to fund >$2.5–$3.0B CapEx annually without stressing leverage per CFO’s math .
  • Watch RNG/D3 RIN pricing: a persistent headwind vs budget pace; any RIN recovery could add upside to ETV/CO2; otherwise expect continued relative underperformance in that segment .
  • Western Gateway open season and Hainesville buildout are real-time execution markers; successful commercialization and sanctioning would validate refined products strategy and basin takeaway theses .
  • Storage expansions and Southeast power projects (SSE4/MSX) are emerging differentiators; expect incremental disclosures through 2026 FIDs as IRPs translate into pipe/storage commitments .
  • Dividend visibility remains high with reiterated $1.17/share for 2025 and internally funded growth; further rating upgrades by S&P/Moody’s would be incremental positives for equity yield signals .

Additional Data and Disclosures

  • Dividend: $0.2925 per share declared for Q3 (2% YoY increase) .
  • FCF and leverage: Q3 cash flow from operations $1.414B; FCF $621M; net debt/Adj EBITDA 3.9x (LTM Adjusted EBITDA $8.183B) .
  • Non-GAAP: Adjusted Net Income/EBITDA exclude “Certain Items” (derivative fair value changes, discrete taxes, etc.); reconciliations provided in Tables 2/5/6 .

Footnote: Asterisk (*) denotes S&P Global estimates. Values retrieved from S&P Global.