01—Abstract
Summary
Summary of the 8-K filed January 22, 2025. Cited figures are marked; the original filing is the authoritative source.
Kinder Morgan (KMI) reported fourth-quarter 2024 preliminary results on January 22, 2025, with GAAP EPS of $0.30a (up 11% year over year) and Adjusted EPS of $0.32 (up 14%).
Net income attributable to KMI rose to $667 millionb from $594 million, and Adjusted EBITDA increased 7% to $2,063 million. Full-year 2024 Adjusted EBITDA was $7,938 million (up 5%), and Net Debt-to-Adjusted EBITDA ended the year at 4.0x, down from 4.2x. Free cash flow after capital expenditures was $738 million for the quarter but only $3,006 million for the full year, and FCF after dividends fell to $449 million for 2024 from $1,645 million in 2023, largely because 2023 benefited from an $843 million customer prepayment.
The board declared a $0.2875c quarterly dividend, a 2% increase. Management's main investor message centers on natural gas demand growth from LNG, power generation, and data centers. The project backlog rose nearly 60% to $8.1 billion, with natural gas projects making up about 89% of it.
The company announced the $1.7 billiond Trident Intrastate Pipeline (in service expected Q1 2027), and expanded the Mississippi Crossing project to a $1.6 billion scope with roughly 1.8 Bcf/d of subscriptions. It also agreed to acquire the Outrigger Energy II gathering and processing system for $640 million, at roughly 8x 2025 EBITDA. For 2025, KMI budgeted Adjusted EBITDA of $8.3 billion (up 4%), net income attributable to KMI of $2.8 billion (up 8%), and Adjusted EPS of $1.27 (up 10%), with a year-end leverage target of 3.8x.
These figures exclude the Outrigger acquisition. The budget assumes WTI at $68/bbl and Henry Hub at $3.00/MMBtu. Because the release is preliminary and unaudited, and many figures are non-GAAP, investors should review the full reconciliations and the forward-looking risk disclosures.
02—Key points
Key Highlights
- Q4 2024 GAAP EPS of $0.30 (up 11%) and Adjusted EPS of $0.32 (up 14%); net income attributable to KMI of $667M vs. $594M a year earlier
- Q4 Adjusted EBITDA of $2,063M (up 7%); full-year 2024 Adjusted EBITDA of $7,938M (up 5%)
- Backlog of $8.1B, up nearly 60% from $5.1B in Q3 2024, with ~89% in natural gas projects and a first-full-year Project EBITDA multiple of ~5.8x on the remaining $7.0B
- Announced ~$1.7B Trident Intrastate Pipeline (216 miles, 1.5 Bcf/d, Katy to Port Arthur, TX), expected in service Q1 2027; Mississippi Crossing expanded to ~$1.6B with ~1.8 Bcf/d subscribed
- Agreed to acquire Outrigger Energy II's North Dakota gathering and processing system for $640M (~8x 2025 EBITDA), expected to close Q1 2025 subject to HSR clearance
- 2025 budget: Adjusted EBITDA of $8.3B (+4%), net income attributable to KMI of $2.8B (+8%), Adjusted EPS of $1.27 (+10%), and year-end Net Debt-to-Adjusted EBITDA target of 3.8x; excludes Outrigger
- Quarterly dividend of $0.2875 (+2% YoY), $1.15 annualized; 2025 dividend expectation of $1.17 per share. Full-year FCF after dividends fell to $449M from $1,645M, partly reflecting a non-recurring 2023 customer prepayment
03—Questions
Frequently Asked Questions
How did Kinder Morgan perform in Q4 2024 and full-year 2024?
Q4 2024 GAAP EPS was $0.30 and Adjusted EPS was $0.32, up 11% and 14% respectively. Q4 Adjusted EBITDA rose 7% to $2,063M. For full-year 2024, net income attributable to KMI was $2,613M (up 9%), Adjusted EPS was $1.15 (up 7%), and Adjusted EBITDA was $7,938M (up 5%). Leverage improved to 4.0x from 4.2x.
Why did free cash flow after dividends decline sharply in 2024?
Full-year 2024 FCF after dividends was $449M, versus $1,645M in 2023. The main driver was the 2023 comparison base, which included $843M of cash received from a customer prepaying fixed reservation charges on long-term contracts. Full-year 2024 FCF was $3,006M, down from $4,174M, with higher capital expenditures ($2,629M vs. $2,317M) and lower operating cash flow ($5,635M vs. $6,491M), which also reflected that 2023 prepayment. Dividends paid were $2,557M.
What major growth projects did KMI announce or advance?
KMI announced the ~$1.7B Trident Intrastate Pipeline, expected in service in Q1 2027. It also expanded the Mississippi Crossing project to ~$1.6B and about 2.1 Bcf/d of capacity, targeting November 2028 in service. South System Expansion 4 (~$3B total, ~$1.7B KMI share) is in preliminary survey work, with phases targeted for Q4 2028 and Q4 2029. The GCX expansion ($455M) is expected mid-2026, and Evangeline Pass (~$672M) is expected July 1, 2025. Together, the company cites about $5B of KMI-share project costs across SSE4, Mississippi Crossing, and Trident.
What does the Outrigger Energy II acquisition mean for investors?
Hiland Partners Holdings will buy a North Dakota gathering and processing system for $640M. The assets include a 270 MMcf/d processing plant and a 104-mile gathering header with 350 MMcf/d of capacity, backed by long-term contracts. KMI expects it to be immediately accretive at about 8x 2025 Adjusted EBITDA, excluding roughly $20M of deferred revenue cash payments in 2025. The deal is subject to HSR clearance and is expected to close in Q1 2025. It is not included in KMI's 2025 budget.
What are the key 2025 assumptions and risks behind the outlook?
The 2025 budget assumes WTI crude at $68/bbl and Henry Hub natural gas at $3.00/MMBtu, consistent with the forward curve at the time. Budgeted Adjusted EBITDA is $8.3B and net income attributable to KMI is $2.8B. Risks cited include changes in supply and demand for transported products, commodity price movements, counterparty credit risk, and the timing of project approvals and completions. The release is preliminary and unaudited, and many metrics are non-GAAP, so investors should review the reconciliations and the risk factors in KMI's SEC filings.
04—Continue