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KM

KINDER MORGAN, INC. (KMI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 results: EPS $0.30 (+11% YoY) and Adjusted EPS $0.32 (+14% YoY); Adjusted EBITDA $2.063B (+7% YoY); revenues $3.987B (down ~1% YoY) .
  • Backlog surged to $8.1B, up nearly 60% q/q, driven by three large gas projects (SSE4, Mississippi Crossing, Trident); natural gas accounts for ~89% of backlog .
  • Announced ~$1.7B Trident intrastate pipeline (1.5 Bcf/d, IS by Q1’27), upsized Mississippi Crossing to ~1.8 Bcf/d; dividend set at $0.2875 ($1.15 annualized), +2% YoY .
  • 2025 outlook: Net income $2.8B (+8% YoY), Adjusted EPS $1.27 (+10%), Adjusted EBITDA $8.3B (+4%), leverage 3.8x; management sees robust demand from LNG, power and AI/data centers as multi‑year catalysts .
  • Street estimates comparison was unavailable (S&P Global daily limit); see “Estimates Context” section.

What Went Well and What Went Wrong

What Went Well

  • Strong YoY profit metrics: EPS +11% YoY; Adjusted EPS +14%; Adjusted EBITDA +7%, with strength in Natural Gas Pipelines, Products and Terminals segments .
  • Strategic wins and visibility: Secured/expanded major projects (Trident; Mississippi Crossing now ~1.8 Bcf/d; SSE4 progressing); backlog up to $8.1B and expected ~$2.5B/year expansion capex for several years .
  • Management tone confident on midstream cycle: “This is the most exciting time to be in the midstream natural gas market…investments…will drive growth in EBITDA and EPS for years to come.” — Richard Kinder .

What Went Wrong

  • Gathering weakness and commodity sensitivity: Natural gas gathering volumes down 7% YoY in Q4 (Haynesville & Bakken), reflecting lower commodity prices; full-year gathering volumes +6% YoY .
  • RNG headwinds: Q4 EBITDA ran ~below internal quarterly budget due to lower RNG sales and RIN market liquidity pushing sales into next year (call commentary) .
  • CO2 segment softer: earnings down YoY given asset divestitures and lower crude/CO2/NGL volumes; crude net-to-KMI down 6% for the year (though within ~1% of plan) .

Financial Results

Consolidated Quarterly Financials (Q2 → Q3 → Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Revenues ($USD Billions)$3.572 $3.699 $3.987
Net Income Attributable to KMI ($USD Millions)$575 $625 $667
EPS (Basic & Diluted, $)$0.26 $0.28 $0.30
Adjusted EPS ($)$0.25 $0.25 $0.32
Adjusted EBITDA ($USD Millions)$1,858 $1,880 $2,063
Dividend per share ($)$0.2875 $0.2875 $0.2875

Q4 2024 vs Prior Year (Q4 2023)

MetricQ4 2023Q4 2024YoY Change
Revenues ($USD Billions)$4.038 $3.987 -$0.051B (approx)
Net Income Attributable to KMI ($USD Millions)$594 $667 +$73M
EPS ($)$0.27 $0.30 +11%
Adjusted EPS ($)$0.28 $0.32 +14%
Adjusted EBITDA ($USD Millions)$1,925 $2,063 +7%

Segment Adjusted EBDA ($USD Millions)

SegmentQ2 2024Q3 2024Q4 2024
Natural Gas Pipelines$1,231 $1,280 $1,438
Products Pipelines$301 $277 $302
Terminals$281 $267 $282
CO2$164 $162 $162

Operating KPIs

KPIQ2 2024Q3 2024Q4 2024
Nat Gas Transport Volumes (BBtu/d)42,122 44,824 44,507
Nat Gas Gathering Volumes (BBtu/d)4,013 3,825 3,838
Total Refined Products Volumes (MBbl/d)1,676 1,676 1,644
Liquids Leased Capacity (%)94.3% 94.9% 95.2%
CO2 Oil Production – Net (MBbl/d)26.05 25.92 26.22
RNG Sales Volumes (BBtu/d)9 6 11

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Income Attributable to KMI ($)FY 2025N/A (previewed; specific prior not provided)$2.8B Initiated/Confirmed
Adjusted EPS ($) and YoY GrowthFY 2025+8% YoY (Dec preview per analyst question) $1.27; +10% YoY Raised growth %
Adjusted EBITDA ($)FY 2025N/A (prior number not disclosed here)$8.3B Initiated/Confirmed
Net Debt / Adjusted EBITDA (x)YE 2025~3.8x (previewed) 3.8x Maintained
Dividends per share ($)FY 2025$1.15 for 2024 baseline $1.17 (2% increase) Raised

Additional visibility:

  • Backlog: $5.1B (Q3) → $8.1B (Q4), +~60% q/q .
  • Trident Intrastate (1.5 Bcf/d, ~$1.7B) in-service Q1’27; MSX ~1.8 Bcf/d now; SSE4 progressing in phases (IS 2028/2029) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4 2024)Trend
AI/data center power demandQ3: “opportunity set well in excess of 5 Bcf/d” for AI/data centers/industrial reshoring Early in cycle; admin support; Kinder estimates +28 Bcf/d gas demand to 2030, with power at ~3 Bcf/d baseline and upside; positioning in Texas/NGPL footprint Strengthening
LNG exportsQ2/Q3: major projects aligned to LNG; Evangeline Pass phases; GCX FID Serve ~45% of LNG exports with ~10.7 Bcf/d contracted (growing over time) Expanding
Permitting/regulatoryQ3: large projects progressing; timelines typical FERC timelines a focus; aim for speed but defensible permits; intrastate ~2 years vs interstate ~4 years Potentially improving
RNG performanceQ3: new RNG capacity coming online (Autumn Hills) Q4: RNG sales/RINs liquidity constrained; timing pushed some RINs into next year Mixed/volatile
Jones Act tankersQ3: higher rates; fully contracted Q4: fleet fully leased; opportunistically chartered at higher rates; long-term visibility Strong
Gathering volumes (Haynesville/Bakken)Q2: gathering up YoY; Q3: gathering volumes up 5% YoY Q4: gathering down 7% YoY; management budgets +5% in 2025 as LNG ramps Near-term soft; medium-term recovery
Backlog magnitude/multiplesQ3: $5.1B backlog; ~5.4x project EBITDA multiple Q4: $8.1B backlog; ~5.8x aggregate multiple on remaining $7.0B Accelerating

Management Commentary

  • “All of these [new] projects…will entail capital expenditures net to us in excess of $5 billion, and will have the capacity to transport over 5 Bcf a day of natural gas…returns…significantly above our cost of capital.” — Richard Kinder .
  • “We added $6.3 billion in projects to the backlog…expect to spend approximately $2.5 billion per year in expansion CapEx for the next several years.” — Kim Dang .
  • “Natural gas transport volumes were essentially unchanged…gathering volumes were down 7% YoY…we view this slight pullback…as temporary given higher production [needed] to meet LNG demand in 2H25.” — Tom Martin .
  • “We ended the year with $31.7 billion of net debt and a 4.0x net debt to adjusted EBITDA ratio…expect net income +8%, EBITDA +4%, adjusted EPS +10% in 2025, ending leverage at 3.8x.” — David Michels .

Q&A Highlights

  • Backlog economics and moat: management affirmed return criteria and competitive advantages (system footprint, execution); backlog multiples consistent with history .
  • Bakken acquisition rationale: complementary fit with existing assets; MVC-backed contracts; expect capital and commercial synergies over time; immediate accretion and ~6–8x multiple depending on cash timing .
  • Guidance cadence and sensitivities: commodity prices slightly above budget could be upside; Outrigger not in budget; possible tanker upside; sticking to budget for now .
  • AI/data center projects: opportunity near Abilene, TX; NGPL/intrastate positioning; competitive landscape acknowledged .
  • LNG positioning: ~45% served; ~10.7 Bcf/d contracted long-term; further opportunities as facilities seek upstream supply and insurance capacity .
  • M&A flexibility: opportunistic; internally funded capex; equity issuance only for very large deals that make economic sense .
  • Q4 miss vs internal budget: RNG sales down and RINs pushed to next year; commodity headwind also cited .
  • Permitting: aim for faster FERC process under new administration while preserving defensible permits .
  • Northeast growth constraints: state-level permits and RTO design hinder firm IPP contracting; no change seen .
  • Cost inflation mitigation: early procurement on steel/compression across big pipes to reduce risk .

Estimates Context

  • S&P Global consensus estimates could not be retrieved due to the daily request limit, so Street comparisons for Q4 2024, Q3 2024, and Q2 2024 are unavailable at this time. As a result, we cannot formally score beats/misses vs consensus in this recap (intended source: S&P Global).
  • Given KMI’s 2025 outlook (Adjusted EPS +10%, backlog expansion, multi‑year project pipeline), we expect analysts to reassess forward estimates and project timing/returns as permitting and contracting milestones are achieved .

Key Takeaways for Investors

  • Earnings quality improving: broad-based strength (Nat Gas Pipelines, Products, Terminals) drove EPS/Adj EPS/Adj EBITDA growth despite softer gathering and RNG volatility .
  • Project-driven visibility: backlog up to $8.1B with large, long-dated gas projects (Trident, MSX, SSE4) underpinning multi-year EBITDA/ EPS growth; expect ~$2.5B/year expansion capex .
  • AI/power/LNG catalysts: positioning across Texas/NGPL/TGP provides leverage to rising baseload power and LNG flows; near-term laterals (“singles and doubles”) likely augment returns .
  • Capital discipline intact: leverage at 4.0x exiting 2024; guided to 3.8x YE’25 while funding growth internally; opportunistic M&A only if economics warrant .
  • Near-term watch items: RNG/RIN market liquidity; Haynesville/Bakken activity; permitting timelines; procurement/cost inflation risks (mitigated by early orders) .
  • Dividend continuity: Q4 dividend $0.2875; 2025 DPS guided to $1.17 (+2% YoY) alongside growth outlook .
  • Trading implications: positive narrative skew (backlog growth, visibility, leverage improvement) vs. transitory RNG and gathering headwinds; catalysts include project FIDs/permits, contract wins, and budget detail release on Feb 5, 2025 .