Kinder Morgan(US:KMI)2025-10-22 21:30Financial Data and Key Metrics Changes - EBITDA increased by 6% year-on-year, while adjusted EPS grew by 16% [9] - Net income attributable to Kinder Morgan was $628 million, with EPS of $0.28 per share, consistent with the third quarter of 2024 [17] - The net debt to adjusted EBITDA ratio improved to 3.9 times, down from 4.1 times at the end of the first quarter [18] Business Line Data and Key Metrics Changes - Natural gas segment, which constitutes two-thirds of the business, outperformed its budget, with transport volumes up 6% and gathering volumes up 9% year-on-year [13][14] - Refined product volumes decreased by 1% compared to the third quarter of 2024, while crude and condensate volumes were down 3% [14] - The terminals business segment maintained high liquids lease capacity at 95% [15] Market Data and Key Metrics Changes - The company transports over 40% of the natural gas in the U.S., including significant volumes to LNG export facilities and power plants [10][11] - Internal projections estimate a 28 BCF per day increase in natural gas demand by 2030, primarily driven by LNG exports and power generation [11] Company Strategy and Development Direction - Kinder Morgan's long-term strategy focuses on capitalizing on the growing demand for natural gas, particularly in LNG and power generation sectors [3][7] - The company has a $9.3 billion expansion backlog and is pursuing over $10 billion in potential projects, primarily in natural gas [10][12] - The company aims to maintain a healthy dividend while funding growth projects internally [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and execution, anticipating double-digit earnings growth for 2025 [19] - The company expects to exceed its 2025 budget, driven by strong demand and contributions from expansion projects [19] - Management highlighted the supportive regulatory environment for project approvals [7] Other Important Information - The company declared a quarterly dividend of $0.2925 per share, representing a 2% increase over the previous year [17] - The Outrigger acquisition contributed positively to the company's performance, although lower D3 RIN prices and RNG volumes impacted results [9][17] Q&A Session Summary Question: What has driven the improved outlook for the $10 billion opportunity set? - Management indicated that the opportunities are primarily in natural gas, supporting LNG exports and power generation, with projects across the southern U.S. [22] Question: Can you discuss the Western Gateway project's positioning relative to competitors? - Management explained that the Western Gateway project would enhance capacity for the growing Arizona market and provide additional barrels to California [25][26] Question: How does Kinder Morgan view its competitive positioning in the market? - Management acknowledged competition but emphasized the company's existing footprint and track record of delivering projects on time and on budget as key advantages [32] Question: What is the outlook for the 2026 growth rate? - Management stated it is too early to predict specific growth rates for 2026 but highlighted potential tailwinds from expansion projects and favorable tax conditions [59] Question: How does the company plan to finance its expansion projects? - Management expressed confidence in the ability to finance expansions through free cash flow and balance sheet capacity, indicating no concerns about accessing capital [63]