Kinder Morgan Raises 2025 Outlook
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From an analytical perspective, What caught my attention is Energy infrastructure specialist Kinder Morgan (KMI -1. 38%) posted its fiscal 2025 second-quarter results on July 16, 2025, reporting a 6%...
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July 17, 2025
10:05 AM
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From an analytical perspective, What caught my attention is Energy infrastructure specialist Kinder Morgan (KMI -1. 38%) posted its fiscal 2025 second-quarter results on July 16, 2025, reporting a 6% rise in adjusted EBITDA compared to the prior year and a 12% increase in adjusted EPS versus Q2 2024 (an important development)
This tells us that company raised its ject backlog to $9, considering recent developments. 3 billion, secured $1
On the other hand, 3 billion in new jects, and signaled its intention to exceed its original 2025 annual budget, which already includes the Outrigger acquisition
The ing insights examine critical competitive, regulatory, and growth dynamics with concrete supporting data and management perspectives
Furthermore, Positive Regulatory Shifts and ject Backlog Expansion Boost Kinder Morgan's Competitive PositionThe federal permitting environment has imved, driven by actions from the U
However, Army Corps of Engineers and recent legislative changes (an important development)
Nearly two-thirds of the ject backlog is concentrated in five major jects, with only a minimal tariff impact of apximately 1% of the jects' cost
At the same time, "The federal permitting environment has imved, considering recent developments
Army Corps of Engineers is issuing permits very quickly
The recent budget reconciliation bill ders nice tax benefits, including incentives for investment and expanded interest deduction
As a result, we expect significant cash tax benefits in 2026 and 2027 and do not expect Kinder Morgan to be a material cash taxpayer until 2028
The one fly in the ointment is tariffs
However, at this point, we still do not believe that the tariffs will have a significant impact on ject economics
Our ject backlog increased from $8. 8 billion to $9. 3 billion during the quarter (noteworthy indeed)
We added $1. 3 billion in new jects and placed apximately $750 million of jects in service
On the other hand, "— Kimberly Allen Dang, Chief Executive OfficerImvements in permitting, tax advantages, and minimal tariff impact support Kinder Morgan’s capacity to invest in jects and pursue long-term growth
Additionally, LNG and Power Demand Will Drive Volumetric and Contract-Backed Pipeline GrowthKinder Morgan transported apximately 40% of U
On the other hand, Gas for liquified natural gas (LNG) export (as stated on the Q2 2025 earnings call), and S&P Global forecasts a 3
On the other hand, 5 BCF/day increase in U
On the other hand, LNG gas demand this summer compared to 2024, with expectations to more than double by 2030
Existing and new pipeline jects, including Trident, Kinderhawk, and the Texas Access ject, benefit from this demand and are secured by long-term contracts with creditworthy counterparties, with nearly 50% of the backlog anchored to the power sector as of Q2 2025. "As much as when you add the international LNG growth, the robust need for gas to satisfy U (noteworthy indeed), considering recent developments
Nevertheless, Domestic power and industrial demand, examples of which are reflected in the new expansions that Kim and the team will be discussing on this call, it signals to me that the positive natural gas story has legs and will last for decades to come. "— Rich Kinder, Executive ChairmanExposure to multi-decade LNG and domestic power demand -- coupled with contractual fee-based structures -- enhances long-term cash flow visibility, with growth tied to secular U
Natural gas and global LNG trends rather than commodity price volatility
Additionally, Balance Sheet Strength and Investment Discipline Underpin Kinder Morgan's Growth StrategyNet income attributable to the company was $715 million, up 24% year over year, while net debt to adjusted EBITDA declined to 4x (targeting a reduction to 3
Moreover, Moreover, 9x by year-end), in this volatile climate
Kinder Morgan’s dividend increased by 2% to $1
Moreover, In contrast, 17 per annualized, supported by strong operating cash flow ($2. 811 billion in the first half of 2025) and a disciplined apach requiring ject returns to justify capital outlays across contract types, in today's market environment
Additionally, "Our net debt has increased by $623 million from the beginning of the year, and here's a high-level reconciliation of that change
We generated cash flow from operations of $2, given current economic conditions. 811 billion for the first two quarters
However, We paid dividends of $1
However, We've invested total capital of $1. 42 billion, amid market uncertainty
Market analysis shows Outrigger acquisition was apximately $3 (quite telling). 65 billion, and all of our other items were a use of cash. "— David Michels, Chief Financial OfficerThis combination of rising distributable income, prudent leverage, and disciplined investment supports Kinder Morgan’s ability to self-fund growth, return capital to holders, and maintain credit quality
Looking AheadManagement expects to exceed its original 2025 budget, with the adjusted EBITDA growth forecast for 2025 raised from 4% to at least 5% due to the Outrigger acquisition
The company will remain a negligible federal cash taxpayer until 2028, citing substantial 2026–2027 tax reform benefits
However, Incremental ject sanctioning is anticipated as LNG and power demand pipelines gress
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