Kinder Morgan (KMI) Q3 2024 earnings summary

Executive summary

• Net income attributable to KMI rose 17% year-over-year to $625 million for Q3 2024, with EPS at $0.28 and Adjusted EBITDA up 2% to $1,880 million.

• Revenues declined 5% year-over-year to $3.70 billion for Q3, mainly due to lower commodity prices and volumes.

• Project backlog increased 34% year-over-year to $5.1 billion, with 86% devoted to lower-carbon energy investments.

• Major new projects and expansions announced, including the $3 billion South System Expansion 4 and $455 million Gulf Coast Express Pipeline expansion, both underpinned by long-term contracts.

• Board approved a quarterly dividend of $0.2875 per share, a 2% increase over 2023.

Financial highlights

• Operating income for Q3 2024 increased 8% year-over-year to $1.02 billion; Adjusted Net Income for Q3 was $557 million, down slightly from Q3 2023.

• Q3 revenue was $3.7 billion, down $208 million year-over-year, but gross margin increased 7% due to lower cost of sales.

• Free cash flow for Q3 was $592 million; FCF after dividends was negative $51 million.

• Cash flow from operations for the nine months was $4,125 million, nearly flat year-over-year.

• Capital investments for the nine months totaled $2,180 million, with $694 million in sustaining and $1,183 million in expansion capital expenditures.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA expected to grow 5% and Adjusted EPS 9% versus 2023, though both are slightly below budget due to lower commodity prices and RNG facility delays.

• 2024 net income guidance is $2.7 billion ($1.22 per share), DCF guidance is $5 billion ($2.26 per share), and Adjusted EBITDA $8.16 billion, all up from 2023.

• Dividend expected to be $1.15 per share for 2024, a 2% increase over 2023.

• CapEx guidance remains at roughly $2 billion per year, with potential to exceed depending on project timing.

• Year-end Net Debt-to-Adjusted EBITDA ratio expected at 4.0x.