KMI - Earnings call transcript Q1 2024

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Operator

Welcome to the quarterly earnings conference call. [Operator Instructions] Today's call is being recorded.

If you have any objections, please disconnect at this time. I'll now turn the call over to Mr. Rich Kinder, Executive Chairman of Kinder Morgan. Thank you.

begin. may You

Richard Kinder

Ted. Thank you,

Litigation before as that we include to always, measures. Exchange Private I'd statements of XXXX, course, the as begin, earnings release certain you Securities Securities the KMI's of call of the remind Act today of within and XXXX, As Act meaning like Reform well and forward-looking financial this non-GAAP

measures our set we full investment at well making decisions, strongly of encourage non-GAAP to as use any of financial forward-looking disclosure end read forth statements the release, our and Before you earnings as material in materially described review our latest from may filings factors differ with and the anticipated such SEC forward-looking assumptions, for and cause important those to statements. expectations actual results that risk

increase source to projected of expected a electric in driven expectation result export incremental XXXX support country's of are XX% is about recent and of who over demand PJM about XX% new the tremendous data that especially This electric required annual me another America commodity, in increased power Put speak throughout X XX% centers centers, our that briefly demand its by the in turning for would XX% electricity to demand in natural doubled past of to those about in demand for about issue. projected served prominently being to demand the XX alone at XXXX. of gigawatts. demand survey AI need a utility to to let XX% KMI, lot gas that in use by region XX-year about Interconnection, the AI. One demand good increasing for XX winter growth is this I about XXXX. number forecast XX% factors, demand is AI of demand the projected power. a Midwest industry just power announced as by XXXX. market that at showed on the U.S. I've are by across XXXX. growth resulting of gas the for Kim reported used I through the its day. Utilities which If annually and and data see most growth the by has X.X% of demand Bcf by operates its expanding LNG another Northeast, by centers way, others compounded in comment a wholesale broader would and the data facilities. what the now [indiscernible], to increase one natural quarters, of will Today, In another part and call team, want and a quarter estimates talked XXXX Southeast Before from increase by demand

centers The that XX To York on twice in is, Now typical day. The power demand? about a the important increasingly demand increased factors. nature perspective, rest not how reliability blow doesn't the and data or the use beginning gigawatts finally, is data They in not a natural happen needed City shine question, the of that are question for and and handle become that have affordability to this AI batteries all future the the believe play provide power increased gas us, of and that massive obvious order is us of the like demand. power an extremely practically is to understand role And put recognize that need the in the role nuclear electric XX significant answer future, reminder, the generation. This of unfortunately, is nuclear New overriding it's the economically it's time, important adding use to the mix the We a in market. amounts will all wind sun nuclear of power fatally to and to of key tech. real of a still future. today foreseeable doesn't shortfall of gas the data to is in on time, source hours electricity only near But is built of the all as that feasible. meeting to being centers know the the without that significant not renewables. to play these the need. The all a the available realize that day, knock role demonstrates that demands new require the the overcome flawed in of they're to type they affordable primary for terms year. This that must centers AI play. big uninterrupted is the I of renewables plan days that interruption the and XXX It's will a And power emphasis going natural on

into to understanding renewables building play that takes in the grid, frame In quickly connect to important to time lines addition and these a means All generation for power now factors, that years an distant is this place these years as data to transmission role natural the to possible. as with that's the inconsistent service need complete to centers come. typically all gas market must

clearer in will that be growth Kim. over coming demand us of it more power sector. And I that, months become of increases natural think I'll benefit hypothesis one the the it will will as driver turn midstream demand significant to acceptance with all and and of for years this over even gas

Kimberly Dang

Rich. make a midstream XX%, strong by ours. X%, had to products natural driven businesses. Tom I'm to We tremendous that all our EBITDA type Adjusted of growth you as and then Thanks, going was few set details. the quarter. over EPS fee-based a assets to refined David large performance is increased great overall a it gas points, give up and in Okay. and as I'll by and was This stable of for turn

at shareholders. our value approved dividend. Board that debt increased quarter ended in strong. increase of we've share. This So an to per seventh year $X.XX the row in EBITDA the the to significant continue the a We we X.Xx the Today, balance to dividend is and sheet return remains

Our it and high [indiscernible] that Bcf exports financial seen power LNG seen we've strong. as to the growth anywhere XX between an mix outlook mentioned, respect centers very substantial to with just for XXXX, AI is think do Bcf increase remain gas doubling impacts now Mexico. think grow projects anticipated XXXX estimates data of a budget January expected as to more XX% as EPS LNG we We've pause we year, in is the the range as much think well bad from gas anticipated XX impact an Rich that although LNG in with could long-term pause, we've we Bcf. With well the projects. and some prices between increase adjusted demand Gas doesn't than the our now planned unchanged. and of include as in unwise we decision associated than significantly over provided it the the And demand and but exports a XX% of estimates to and is as But and in policy. lower LNG market or gas X this guidance the we seen from the other that is growth -- not natural fundamentals year in

contract renewable and flow very blending, edges has Volumes opportunities It's the are nice produce product It for much to and in have of continues business cash products nice petroleum capital-efficient years to diesel some also flow. the business around fuels. tariff stable steady come. will a for other sustainable escalators. produce Our cash growth and business

less Ship the the due opportunity in secured backlog Xx. $XXX next XXX Significant challenges site for secured that source to I sequestration business, space Our backlog and economics, distance capacity the of also remains than our with to a multiple located got and often Houston quarter store multiple add added. projects the CCS we during sequestration And think and gas strategically port on we've by site. increased more projects tons. COX -- backlog natural emitting new backlog million Channel to within we've about million the year. In the significant the to very ETV between the the than The

nice we of had growth. So a quarter terms in

a nice we in to significant the have over value the business to quarter. longer and our got details invest to turn expect the that, for term. With Tom sheet. opportunities give to the shareholders balance nice We on growth to for returned continue year. it We've We you sound I'll performance

Thomas Martin

quarter East the Thanks, by Kim. the versus pipelines by winter Rockies Starting primarily expansion compared project into offset into customers Coast placed with by delivered a in first driven to XXXX. had Highway local Permian The volumes on service. Mid-Continent LNG we the business XXXX, X% An Transport of the our being companies unit. increased flows this increased region. into eastbound for quarter first flows the distribution on interstate the Natural partially quarter increased decreased volumes of as quarter to warmer our Texas, Gas

Natural to volumes up the XX%, driven and and Haynesville Eagle XX% were of for first up the Gas volumes, compared respectively. Our Ford by the quarter XX% were gathering XXXX and quarter which

Given personnel demand view higher volumes from market. of are volumes for still G&P production Texas XXXX be gathering assets expected XXXX assets growth XXXX. A average plan, to XX% With spend our delayed well. The X% update integration in we over budgeted our expecting given the slight CapEx the X% we LNG Midstream returns. the but quick below and newly Texas supply pullback of on now low in asset will as until our early about meet in temporary going in adjusting price sales South And acquired environment, our intrastate is growth of gathering cases. both to XXXX volumes this necessary

expected. upside expectation good acquisition are very We acquisition. valuation long-term progressing earnings some multiple and for of sooner than We assumed in we the that the feel opportunities about the the

are more integrated Our experience acquiring we from originally than time acquisitions value expected that in been our existing achieve assets that network. over to other with highly tend we has

evidence volumes the Pacific X% opportunities an offset R&D seeing X% and to Pipeline and increases, to assets flowing expand exploring the day of jet in by in we're our diesel We for refined versus assets. In RD California segment, averaged were condensate continue our these respectively. and quarter, in and Gasoline volumes for were through X%, crude We the that Northwest. quarter and are X% barrels down capabilities increase XX,XXX a fuel, already down our product volumes XXXX. of Products partially grow.

Utilization -- hubs at liquids in very Channel strong, remains high key favorable Our margins. Terminals York blend remained Harbor segment New our Ship the to Houston capacity at lease our XX%. due the at primarily

of quarter are production X% experienced turn XXXX, higher NGL X% a David that, and the the Our in assuming X% to leased XXXX. With XXX% COX volumes, volumes likely through Michels. XX% business oil XXXX are COX options quarter exercised. volumes versus Act and first tankers The leased over Jones I'll segment it through lower lower

David Michels

Okay. Tom. Thank you,

So per quarter for we're from XXXX. share the XXXX, annualized $X.XXXX first per share which of X% $X.XX of a dividend declaring up is

billion, quarter, we million of the was XXXX. generated revenues of $X.XX which from down QX For $XX

which our contributions, drivers business down that the was in growth additional Our X% the assets. up of contributions saw cost to due year-over-year from earnings was service well a Natural million, so noncash The in of each placed me, South those and from from our project operating impairment came in -- main equity from from project margin first $XXX that units $XX quarter as our took our but we explains Terminals growth contributions earnings as sales $XX of investments excuse last most of gross from Texas year. We Equity of is Midstream of increased Gas, growth million, across acquired X%, income. businesses. million Products growth

XX% and attributable balance had in to gas and million of our million, natural income year. higher on QX adjusted higher the XX% due Texas was from last up EPS adjusted of EPS last $X.XX, to an we also $XXX $XXX from and KMI $X.XX, acquisition, storage generated year. up up of a net expense basis, generated due volumes items, margins up part we gathering of Natural short-term assets debt And to of income our both year. we We XX% from net Gas South generated last which On higher QX certain systems. Interest on excludes

growth nice as So Kim mentioned.

last or shares And average our million $X.XX, X% repurchase share from was DCF year. share up due per efforts. Our share by to count reduced XX our X%

quarter ended dividends, with high-level year. On $XXX projects. the $XX.X CapEx, capital quarter sustaining DCF billion by due first tax paid cash capital, billion $X.XXX cash growth from of line $XX we but timing year. sheet, taxes was cash in is for generated first full ventures. and maintenance sustaining in increased Our a favorable increase. with in be is to our full cash and that spent million balance the and of that to impacted flow budget of the from we million contributions taxes reconciliation be And and of joint our debt which expect higher our year payments of for we and We net including here We total beginning to the $XXX operations. million sustaining about our the to

now business that which that, company this mix, press of believe produces a is we you are our for backed that multiyear to several in a flows as our contracts. And X.X long-term operating X.X back release, high-quality significant years, X.Xx. to of leverage like ours target can see guidance Kim. near cash range a in the stable we Finally, long-term appropriate from We've with has range scale adjusting for range and midpoint the around by to been

Kimberly Dang

up would it we'll the question. Ted, you for Okay. take Q&A and if open first

Operator

question [Operator Mackay first Instructions] Goldman Sachs. is with The John from

John Mackay

practical how Maybe looking decisions to down. leverage bring last the hear it's have it because decision of make bit if new operating on a we'll you been I start little And target outputs know process relative just the more with few years, internally a the are love a on I or we're forward this focus been to would then say what target you'll while. the you to could guys kind for

David Michels

Sure.

us assessing at from leverage operating for actual we budget started has X.Xx, gravitating further this target XXXX So the our X.Xx. leverage away started the of when

this there's it we're when So viewed We've the started changing some The where more doesn't of to assessing X.X. of operating -- always The target magic any below our we why changing timing to and the of the the cushion been we're we've gravitating slight from continue that practical having X.X not difference for forward. company -- change change We away really that of going we X.X to are company. it. no but implications as except X.X had valuable. have to that's is way of now, that leverage operate really kind X.X think we'll how reflective this operate that and

Kimberly Dang

in what said. line way just the just the run David I reiterate would policy with business. that It's bringing our we

to And there overall change no so is our capital philosophy. allocation

John Mackay

maybe shifting appreciate gears. I right. And All that.

-- the years, that at ask on Talked side. well. ramp. to to micro is obviously the really see the We're just through tying over specifically? I on you couple see the Kinder for the started talk to demand side. looking of If guys opportunities You Maybe the do big what guys macro hoping you on wanted next gen where power through the biggest we're you

Kimberly Dang

pretty I it's Well, think this. all early of in

of I expect I market. you XX% Rich power the to of U.S. that really roughly think in right And laid so in sort happen out what market But we well if now, we look the serve think

power market, with of of backup. would primarily we focused, think gas Rich overall one some because respect or think, the be have power so on this consistent could what -- that's this will aspect And will said renewable with gas we and I to -- have

just I given take will this happen. think too we to to when long nuclear expect demand develop,

So we XX% of U.S. in the move gas the

is still And exactly don't earlier. that putting so as see now we numbers can is exact we because to expect a But even on demand here an number portion very would going from difficult of the be, this how the significant we that you discussed much right realize range opportunity. know to

Richard Kinder

that I going clearly to possible. you tend it's really. that if a whether is but close or and day, been to overall talking near power at as want look demand, adds. electric for another the Google, of Bcf natural LNG X another reliable And just for know, don't how think located gas stool to months the leg And years, We or generation it This export terms in a as a you're the it's be calibrating XX you leg much to Microsoft will day. about demand your Bcf to be if stool facility demand. we've and But because

Thomas Martin

one a just to country, the is you great think I reach market this serve develops. sector. point network guess additional that the Gas, Natural I the think our And unparalleled it opportunity I wherever other look across us scale of at there, Yes. if our in gives

Operator

queue Michael the in from is question Next Fargo. with Blum Wells

Michael Blum

there remind those I wanted I about Waha benefit ask us is prices of a Texas. been Is to to the impact prices Obviously, are you? just you overall can Permian, there how West impacting just negative you? there And have any Waha negative if wonder late. if

Richard Kinder

Yes.

time at way. storage macro some winter on in result with So a hold. that warm markets, intrastate of I'm we normally micro do wouldn't just this That said, of in proprietary the that here being that the purely predict on had, be this to that not trying point I we share price pricing. we of first, our is this some upside

And It's this so been just -- pipe, where see it I'll in saying another time. for bud. term, we for obviously we we've longer some some the nip need of the benefit. that's see There's and a

While I'm to still work today, having we talking anything this nothing to fronts, discussions another but report announce to try continue you, and we with trying to to this pipe those on morning along customers -- but commercialize have don't afternoon.

Kimberly Dang

out capacity capacity of open. got bit We've We've little in is as for more PHP that open. time, this year, a hedged a there's a go that lot and on bit little of But GCX. but of you

say, spreads I'd out. we those So around participate, when blow the margin

our little benefit of to bit a delivers that So shareholders.

Michael Blum

just then And on maybe I if push that. Great. can

to Or think happen likely expansion you Permian more you're could TCS said both? to Is something Pass? on something nothing a more you still do like or be working that announce. So project, like

Richard Kinder

commercialize to both. look, try Well, and we continue

a the We there's last a just the highly As to It's competitive. need. support time, matter sure making the investment. I have we -- of think it's contract said

Operator

from with next Jeremy The question JPMorgan. is the in queue Tonet

Jeremy Tonet

the volumes was more coming softer come budget? coming as in a by if dive want laid you below budget little bit those in to could you Just gathering than in basin back bit you wondering I to there. see volumes it seems out, a where

Thomas Martin

perspective, the and Bakken Haynesville the slightly certainly temporary well of meet these still little and those growth a a like budget even in the think bit Eagle year, below I more a but demand. is overall, all And up Ford good yes, in to -- need are going From production budget development it's year-over-year. we're volumes and said and earlier, next I picks demand because this as that blip the to

Jeremy Tonet

Got the it. guess, along That's crude seen We've how that Kinder business Gas the pipes still today, thinks if the COX, the look the was in to about out the process. as such thought or natural from helpful you about how wondering it commodity Natural there. environment? just some peers versus versus gas just you And oil. of a of the I current versus level having it all And business separate large-cap lines roof Terminals see I curious, the same higher there synergies under think be kind same

Kimberly Dang

Sure. good all We we they think I flow we the opportunities. and that businesses cash stable own like. and operate, mean provide

different I put we'd and it really Terminals that products, a you. primarily we together Products think you since have commodity for both could -- I essentially bit X lines. they're simplify mean, if little refined

Petroleum products, and COX. the we Gas, have have Natural have we We

for that we long the COX, CCS be I going flooding business. us There's a that think the all expertise get I to think exploit that time. to Permian the is business the on incremental you through going to for gives be COX needed need opportunities production. And in primary oil as production

in talk we reservoirs. certain to the that their to that out help able talk it and so them business and engineers gas reservoir as go and to being us sequestering customers use about keep And we in

continue would wonderful infrastructure. buy entertain they And the offering to economic, they we so fee-based and are them price and And are will happy case, that we businesses assets, to think own in the operate businesses for are our which own. absent operate, in we think, we to we that. at would we we But somebody coming great the asset, getting I shareholders, are with the similar are in [indiscernible] a we energy price, that and a highly stable

Operator

Dingmann Next question Truist Securities. is Neal from with

Neal Dingmann

given question forward? that leverage. new is on buybacks anything? towards Will the for, shareholder thoughts change dividends the and I'd modified return, My go guess, a Is plan say, the I plan, on for

Kimberly Dang

-- It years. change No. in has again, line is that it is the is last no, in over so our This let and way There change our bringing just philosophy. clear couple with that the zero this operated say have everybody. we policy of me allocation capital to

Neal Dingmann

I you just a midstream that follow-up as Very clear. going more think seems the on And quick thought, wondering, like that maybe expected. going one integration got it's I [indiscernible] I'm talk upside -- even is potentially then had just about and than kind just assets, of maybe It well. quite

Kimberly Dang

South Texas?

Thomas Martin

Yes.

we're early obviously. development the than we So together yes, mean, when acquisition, made and those we we seeing some I are come the originally contemplating sooner expected. commercial of days, opportunities opportunities. were seeing we But that

were years now. Some those from several of even out

see this with, side, But think we're again, year environment. some and be the we on sooner for late slightly this on our of given acquisition to model seeing the I year something are But overall, next lower to volumes start XXXX feel we than on year going we yes, opportunities. or price other that lower those even may beyound.

Operator

from Stanley the with next Keith is And Wolfe Research. question

Keith Stanley

the on question backlog. one Just

increased $XXX So the you million.

than you I projects -- other even more sure million. added service came projects, think just I'm on into maybe you $XXX not and said brought gas some if it's

color And more what a on follow-up, projects Just anything you give Was added? that? notable then there Kim. on

Kimberly Dang

million is added on projects interstate Intrastate added service an and $XXX and million we additions. and intrastate on in We the on side. get Egress pipeline added Altamont, project Texas which And we processing on one to the added $XXX projects net lateral put TGP. the gas, a project gathering to projects we the we and million, of $XXX about Keith, added, We in that

Operator

is question with Barclays. the Theresa the from Chen queue in And next

Theresa Chen

related to touch to power demand the theme AI for of on increased centers. like data and I'd

activities, Just customers take potential any like? look discussions steps as curious that commercialize to if had you the with these these your what on far system as and early projects it would could

Peter Staples

Yes.

So this is Staples.

micro connect system. you something I'll to on Just center our looking give -- data working to of to example the We've a in Southeast. we're got

As is Rich capacity. looking supply, power to, for not that, The reliable reliability looking incremental the generator power looking intermittency center of is important. power data are available. of very alluded -- they backstop on is only the effect backup provider And it's top to the itself the for for incremental storage that not to their

an that's things. of in we're something example of at So broader looking terms the

large I to reliable think looking power. They're important populations access is and access obviously for and then cooling for water they're looking land purposes. to for

kind the example in of on our in but something some themes the So specifically, a those good of of we're are working discussions, that's Southeast.

Theresa Chen

of next And so. Permian? that Thank significant the comment? unpack referring year that the to solution Is or us the backlog to comment add Is would to be to there within you, to you Staples. great. an opportunities out that If could Kim, help about your earlier egress more

Kimberly Dang

Sure.

to just set opportunities that it think looking broad I So it -- refers at. we're of a

to is opportunities side, -- talked ramp there all on as so around Permian, out to up. the be the have of of there on about the Ford is could already things that call, these this Haynesville. basins are coming out Eagle supply coming going And We

what of growth the you about. that, to AI before Bcf top data all about get talked we of XX been add to on talking growth demand we've the that center that numbers Just and

on it growth West. on the Its So It the the Coast, supply West is on potentially growth side. it's the Mexico power the the demand West it's is Southeast, in power side, demand industrial the LNG market to in growth it's out LNG on Coast.

So what that grown. mean that fundamental And there's driving opportunity this. factors a seeing think we're are I the whole set is I of bunch has

once start to are we that all the to I but at. you over sets, We of won't set. things But point looking backlog. looking we're the at add -- think going larger those the so time, of And commercialization we're opportunity get to the opportunity

And behind year, come within these my what's I comments. so to next some opportunities are the that's of going fruition to really think and

Operator

question And of is Lungo Bank the America. next from with Dan

Unknown Analyst

the I of the real to allocation just with capital turn of if could range outside range you nothing obviously, factors lower quick. the target end the know to wondering and the leverage higher I I acquisition? would to end of want changed drive priorities. type the was comment back of, just what it right

Kimberly Dang

Yes.

So mean more opportunity, in an for is up periods acquisition we some huge when I result I'd there time. what If if few here's leverage a say are could we see amounts or could going there's that until of for time on period less expansion sheet opportunity came capacity the Obviously, you flow. of opportunity. And create along. time then produce tremendous of a cash balance there's

move down it up looks the range, the inside depending so range like. gives us to on And that flexibility and the that's environment what why

Unknown Analyst

change agencies operating clear. obviously, then like Very in this you've this does how while. And the to been view you rating anything -- a Thanks. regards for

think any to what don't comments guys? it said around have agencies I you the So but will, just

David Michels

we where we X.Xx. way the leverage longer that some like we target agencies. But X.X was fixed would matters previous operated I income In below with and certainly the for being our that up viewed it speak by time to want reality, to some to get think of by was over investors with our agencies the don't period do I operated cushion of as the that. our somewhat to operate --

impact I view that the is have will what making this time. financial on in been our that policy as some more is operating, long agencies which with a rating it by this investors. income think we've the leverage we well change, we've line our think So I fixed target for way But as told the think way everyone

Operator

no at And I'm further time. showing this phone questions

Richard Kinder

all Have evening. very you a thank much. Well, Okay. good

Operator

for Thank your This participation. you today's call. concludes

disconnect may at You time. this

Kinder Morgan (KMI) 17 Apr 242024 Q1 Earnings call transcript