The earnings call for Kinder Morgan, Inc. (KMI) regarding the period ending September 30, 2024, provided a detailed overview of the company’s performance and strategic outlook. The call, held on October 16, 2024, began with the operator introducing Rich Kinder, Executive Chairman of Kinder Morgan.
Rich Kinder emphasized the importance of forward-looking statements and non-GAAP financial measures, highlighting the necessity for investors to review disclosures that accompany the earnings release. He discussed the significant growth in natural gas demand, driven by LNG exports, exports to Mexico, and increased power generation needs, particularly due to developments in AI and data centers. Kinder Morgan anticipates playing a crucial role in expanding natural gas infrastructure to meet this growing demand. He mentioned the $3 billion South System Expansion 4 Project aimed at increasing gas capacity in the Southeastern U.S.
Kimberly Allen Dang, Chief Executive Officer, provided further insights on the company’s financials, noting that third-quarter earnings per share remained unchanged, while EBITDA grew by 2% compared to the previous year. For the entirety of 2024, the company expects a 5% growth in EBITDA and a 9% growth in EPS. The company added approximately $450 million to its project backlog, bringing the total to $5.1 billion, with substantial opportunities identified in the natural gas sector.
Thomas A. Martin, President, discussed increases in natural gas transportation and gathering volumes, with developments in regions like Haynesville and Eagle Ford. He reported on the performance of other segments, including refined products and liquids lease capacity.
David Michaels, Chief Financial Officer, reviewed the financial performance, reporting a 2% dividend increase and a third-quarter net income of $625 million, 17% higher than the previous year. He mentioned a decrease in net debt and the company’s ability to sustain its capital expenditure and growth projects.
During the Q&A session, analysts raised questions about the potential growth driven by upcoming projects, capital expenditure trends, and returns on investments. The discussion also included the strategic value of maintaining integrated business segments and addressing challenges related to project permitting.
Overall, Kinder Morgan demonstrated a strong financial outlook with a strategic focus on leveraging growth opportunities in the natural gas market driven by external demand factors.
