Kinder Morgan Announces 2025 Financial Expectations
“We are projecting an annualized dividend of
“We anticipate generating Adjusted EPS of
“We expect to continue benefiting from strong natural gas market fundamentals driving growth on our existing natural gas transportation and storage assets, as well as creating expansion opportunities. Overall, our base business is relatively flat with expansion projects in our Natural Gas Pipelines segment and Energy Transition Ventures group as the primary growth drivers,” Martin concluded.
Below is a summary of KMI’s expectations for 2025:
-
Generate
of Adjusted EPS, up$1.27 8% versus our current 2024 forecast of .$1.17 -
Generate
of Adjusted EBITDA, up$8.3 billion 4% from the 2024 forecast of .$8 billion -
Invest
in discretionary capital expenditures, including expansion projects and contributions to joint ventures, funded out of internally generated cash flow.$2.3 billion -
Return additional value to shareholders for 2025 through an anticipated declared
per share dividend (annualized).$1.17 - End 2025 with a Net Debt-to-Adjusted EBITDA ratio of 3.8 times.
This press release includes budgeted Adjusted EPS, Adjusted EBITDA and Net Debt, all of which are non-GAAP financial measures. For descriptions of these non-GAAP financial measures and reconciliations to the most comparable measures prepared in accordance with generally accepted accounting principles, please see “Non-GAAP Financial Measures” below. Historically, KMI has disclosed budgeted distributable cash flow, or DCF, in the aggregate and per share. KMI has excluded budgeted DCF from this press release due to declining investor interest in DCF as a primary performance measure. KMI expects to continue to disclose DCF in 2025 as supplemental information in some investor materials for comparability purposes.
KMI’s expectations assume average annual prices for West Texas Intermediate (WTI) crude oil and Henry Hub natural gas of
The KMI board of directors has preliminarily reviewed the 2025 budget and will take formal action on it at the January board meeting, expected to coincide with the issuance of fourth quarter 2024 earnings on January 22, 2025. The 2025 budget will be the standard by which KMI measures its performance next year and will be a factor in determining employee compensation. Kinder Morgan has posted a presentation that includes a brief overview of the 2025 budget to the Investor Relations website and expects to publish a detailed 2025 budget and outlook presentation on the company’s website in early February.
About Kinder Morgan, Inc.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in
Important Information Relating to Forward-Looking Statements
This news release includes forward-looking statements within the meaning of the
Non-GAAP Financial Measures
Our non-GAAP financial measures described further below should not be considered alternatives to GAAP net income attributable to Kinder Morgan, Inc. or other GAAP measures and have important limitations as analytical tools. Our computations of these non-GAAP financial measures may differ from similarly titled measures used by others. You should not consider these non-GAAP financial measures in isolation or as substitutes for an analysis of our results as reported under GAAP. Management compensates for the limitations of our consolidated non-GAAP financial measures by reviewing our comparable GAAP measures identified in the descriptions of consolidated non-GAAP measures below, understanding the differences between the measures and taking this information into account in its analysis and its decision-making processes.
Certain Items, as adjustments used to calculate our non-GAAP financial measures, are items that are required by GAAP to be reflected in net income attributable to Kinder Morgan, Inc., but typically either (1) do not have a cash impact (for example, unsettled commodity hedges and asset impairments), or (2) by their nature are separately identifiable from our normal business operations and in most cases are likely to occur only sporadically (for example, certain legal settlements, enactment of new tax legislation and casualty losses) We also include adjustments related to joint ventures (see “Amounts from Joint Ventures” below).
Adjusted EPS is calculated as Adjusted Net Income Attributable to Common Stock divided by our weighted average shares outstanding. Adjusted Net Income Attributable to Common Stock is calculated by adjusting Net income attributable to Kinder Morgan, Inc., the most comparable GAAP measure, for Certain Items, and further for net income allocated to participating securities and adjusted net income in excess of distributions for participating securities. We believe Adjusted Net Income Attributable to Common Stock allows for calculation of adjusted earnings per share (Adjusted EPS) on the most comparable basis with earnings per share, the most comparable GAAP measure to Adjusted EPS. Adjusted EPS applies the same two-class method used in arriving at basic earnings per share. Adjusted EPS is used by us, investors and other external users of our financial statements as a per-share supplemental measure that provides decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations.
Adjusted EBITDA is calculated by adjusting net income attributable to Kinder Morgan, Inc. for Certain Items and further for DD&A, income tax expense and interest. We also include amounts from joint ventures for income taxes and DD&A (see “Amounts associated with Joint Ventures” below). Adjusted EBITDA (on a rolling 12-months basis) is used by management, investors and other external users, in conjunction with our Net Debt (as described further below), to evaluate our leverage. Management and external users also use Adjusted EBITDA as an important metric to compare the valuations of companies across our industry. Our ratio of Net Debt-to-Adjusted EBITDA is used as a supplemental performance target for purposes of our annual incentive compensation program. We believe the GAAP measure most directly comparable to Adjusted EBITDA is net income attributable to Kinder Morgan, Inc.
Net Debt is calculated by subtracting from debt (1) cash and cash equivalents, (2) debt fair value adjustments, and (3) the foreign exchange impact on Euro-denominated bonds for which we have entered into currency swaps. Net Debt, on its own and in conjunction with our Adjusted EBITDA (on a rolling 12-months basis) as part of a ratio of Net Debt-to-Adjusted EBITDA, is a non-GAAP financial measure that is used by management, investors, and other external users of our financial information to evaluate our leverage. Our ratio of Net Debt-to-Adjusted EBITDA is also used as a supplemental performance target for purposes of our annual incentive compensation program. We believe the most comparable measure to Net Debt is total debt. 2025 budgeted Net Debt is calculated as budgeted total debt of
Amounts associated with Joint Ventures - Certain Items and Adjusted EBITDA reflect amounts from unconsolidated joint ventures (JVs) and consolidated JVs utilizing the same recognition and measurement methods used to record “Earnings from equity investments” and “Noncontrolling interests,” respectively. The calculation of Adjusted EBITDA related to our unconsolidated and consolidated JVs include the same items (DD&A, including amortization of basis differences related to our JVs, and income tax expense) with respect to the JVs as those included in the calculation of Adjusted EBITDA for our wholly owned consolidated subsidiaries; further, we remove the portion of these adjustments attributable to non-controlling interests. Although these amounts related to our unconsolidated JVs are included in the calculation of Adjusted EBITDA, such inclusion should not be understood to imply that we have control over the operations and resulting revenues, expenses, or cash flows of such unconsolidated JVs.
Table 1 |
|||||||
Kinder Morgan, Inc. and Subsidiaries |
|||||||
Reconciliation of Projected Net Income Attributable to Kinder Morgan, Inc. to Projected Adjusted EBITDA |
|||||||
(In billions, unaudited) |
|||||||
|
2024 Forecast |
|
2025 Budget |
||||
Net income attributable to Kinder Morgan, Inc. (GAAP) |
$ |
2.7 |
|
|
$ |
2.8 |
|
Total Certain Items (1) |
|
(0.1 |
) |
|
|
— |
|
DD&A |
|
2.4 |
|
|
|
2.4 |
|
Income tax expense (2) |
|
0.8 |
|
|
|
0.8 |
|
Interest, net (2) |
|
1.8 |
|
|
|
1.8 |
|
Amounts associated with joint ventures |
|
|
|
||||
Unconsolidated JV DD&A (3) |
|
0.4 |
|
|
|
0.5 |
|
Remove consolidated JV partners' DD&A |
|
(0.1 |
) |
|
|
(0.1 |
) |
Unconsolidated JV income tax expense (4) |
|
0.1 |
|
|
|
0.1 |
|
Adjusted EBITDA |
$ |
8.0 |
|
|
$ |
8.3 |
|
Table 2 |
||||||
Kinder Morgan, Inc. and Subsidiaries |
||||||
Reconciliation of Projected Net Income Attributable to Kinder Morgan, Inc. to Projected Adjusted Net Income Attributable to Common Stock |
||||||
(In billions, unaudited) |
||||||
|
2024 Forecast |
|
2025 Budget |
|||
Net income attributable to Kinder Morgan, Inc. (GAAP) |
$ |
2.7 |
|
|
$ |
2.8 |
Total Certain Items (1) |
|
(0.1 |
) |
|
|
— |
Net income allocated to participating securities (1)(5) |
|
— |
|
|
|
— |
Other (1)(6) |
|
— |
|
|
|
— |
Adjusted Net Income Attributable to Common Stock (7) |
$ |
2.6 |
|
|
$ |
2.8 |
Notes |
|
(1) |
Aggregate adjustments are currently estimated to be less than |
(2) |
Amounts are adjusted for Certain Items. |
(3) |
Includes amortization of basis differences related to our JVs. |
(4) |
Includes the tax provision on Certain Items recognized by the investees that are taxable entities associated with our Citrus, NGPL and Products (SE) Pipe Line equity investments. |
(5) |
Net income allocated to common stock and participating securities is based on the amount of dividends paid in the current period plus an allocation of the undistributed earnings or excess distributions over earnings to the extent that each security participates in earnings or excess distributions over earnings, as applicable. |
(6) |
Adjusted net income in excess of distributions for participating securities. |
(7) |
Adjusted Net Income Attributable to Common Stock is used to calculate Adjusted EPS. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241209656170/en/
Dave Conover
Media Relations
newsroom@kindermorgan.com
Investor Relations
(800) 348-7320
km_ir@kindermorgan.com
www.kindermorgan.com
Source: Kinder Morgan, Inc.