KMI reported adjusted EBITDA of $2.199B, a 12% YoY rise, and raised full-year guidance. Natural gas projects dominate the $9.6B backlog. A Western Gateway FID with Phillips 66 is due in two months.
Kinder Morgan reported adjusted EBITDA of $2.199 billion for the second quarter, a 12% increase from a year earlier and above the consensus estimate of $2.081 billion. The company raised its full-year adjusted EBITDA forecast, now expecting to beat original budgets by more than 5%, or roughly $430 million, management said.
The project backlog reached $9.6 billion, with $200 million in new additions during the quarter. Natural gas projects make up 92% of the backlog. More than 60% of that is tied to local distribution company demand and power generation, a segment that includes the energy needs of AI and data centers, management said. The company sanctioned $2 billion in projects over the past 12 months and expects to add at least $1 billion in the second half of the year. The board gave contingent approval for nearly $400 million in new projects not yet in the backlog. The shadow backlog stands at over $10 billion. The backlog, excluding $1.1 billion from CO2 enhanced oil recovery and gathering projects, carries a project EBITDA multiple of 5.6x, management noted.
The Mississippi Crossing and South System Expansion 4 projects received final FERC Environmental Impact statements in June. The company expects to receive FERC certificates by the end of the month. The Trident pipeline is about 60% complete. All three remain on schedule and on budget. Kinder Morgan also closed the $500 million Monument pipeline acquisition during the quarter.
Kinder Morgan and Phillips 66 expect to reach a final investment decision on the Western Gateway system within two months. The project would supply refined products from the U.S. Gulf Coast to California and Arizona, reducing dependence on global oil markets, the company said.
The board declared a cash dividend of $0.2975 per share, up 2% from a year ago. Net income for the quarter was a record $867 million. The company generated $2 billion in cash from operations and $1 billion in free cash flow after capital expenditures. Management expects net debt-to-adjusted EBITDA to stay at 3.6x, the low end of its target range.
KMI holds an Alpha Score of 60 from AlphaScala, and PSX scores 66, both in the Moderate range. Investors can track the stocks on their KMI stock page and PSX stock page.
A final investment decision on the Western Gateway system is expected within two months, management said.
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