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Earnings per Share (EPS) up 11% and Adjusted EPS up 14%
Announces $1.7 billion Trident Intrastate Pipeline Project
January 22, 2025 04:05 PM Eastern Standard Time
HOUSTON--(BUSINESS WIRE)--Kinder Morgan, Inc.’s (NYSE: KMI) board of directors today approved a cash dividend of $0.2875 per share for the fourth quarter ($1.15 annualized), payable on February 18, 2025, to stockholders of record as of the close of business on February 3, 2025. This dividend is a 2% increase over the fourth quarter of 2023.
KMI is reporting:
HOUSTON--(BUSINESS WIRE)--Kinder Morgan, Inc.’s (NYSE: KMI) board of directors today approved a cash dividend of $0.2875 per share for the fourth quarter ($1.15 annualized), payable on February 18, 2025, to stockholders of record as of the close of business on February 3, 2025. This dividend is a 2% increase over the fourth quarter of 2023.
KMI is reporting:
Fourth quarter earnings per share (EPS) of $0.30, up 11% compared to the fourth quarter of 2023 and Adjusted EPS of $0.32, up 14% compared to the fourth quarter of 2023.
Net income attributable to KMI of $667 million, compared to $594 million in the fourth quarter of 2023.
Adjusted EBITDA of $2,063 million, up 7% versus the fourth quarter of 2023.
“The company enjoyed another exceptional quarter, with very strong operational and financial performance. We continued to internally fund high-quality capital projects while generating cash flow from operations of $1.5 billion and $0.7 billion in free cash flow (FCF) after capital expenditures. With robust market fundamentals and a new Administration committed to expediting energy infrastructure projects, the future looks bright,” said Executive Chairman Richard D. Kinder.
“KMI had a very strong fourth quarter on increased financial contributions from our Natural Gas Pipelines, Products Pipelines and Terminals business segments, with Adjusted EBITDA up 7% versus the fourth quarter of 2023. Our balance sheet remains healthy, as we ended the year with a Net Debt-to-Adjusted EBITDA ratio of 4.0 times,” said Chief Executive Officer Kim Dang.
“We are also today announcing the Trident Intrastate Pipeline Project, an approximately 216-mile pipeline build underpinned by long-term contracts that will provide approximately 1.5 billion cubic feet per day (Bcf/d) of capacity from Katy, Texas to the LNG and industrial corridor near Port Arthur, Texas,” continued Dang.
“Further, during the quarter we secured additional long-term, binding transportation agreements on our previously announced Mississippi Crossing Project, resulting in a current project subscription of approximately 1.8 Bcf/d. The estimated $1.6 billion project is now designed to transport up to 2.1 Bcf/d of natural gas through the construction of nearly 206 miles of 42-inch and 36-inch pipeline and three new compressor stations.
“For several quarters now, we have pointed to expected significant new natural gas demand for LNG, power plants, and emerging opportunities such as artificial intelligence operations, cryptocurrency mining, data centers and industrial re-shoring. These expectations are being realized. Our commercial teams have secured contracts to underpin three large natural gas projects - South System Expansion 4, Mississippi Crossing and Trident, totaling approximately $5 billion (KM share) in project costs. These projects are all progressing and are expected to contribute to significant future growth once in service,” said Dang.
“Our project backlog also reflects this strong natural gas demand. At the end of the fourth quarter of 2024, the backlog stood at $8.1 billion, a nearly 60% increase compared to $5.1 billion in the third quarter of 2024. Natural gas projects account for approximately 89% of the backlog. In calculating backlog Project EBITDA multiples, we exclude both the capital and EBITDA from our CO2 enhanced oil recovery projects and our gathering and processing projects, where first full year multiples are more favorable but the earnings are more uneven than with our other business segments. We expect the remaining $7.0 billion of projects in the backlog, when realized, to generate an aggregate first full year Project EBITDA multiple of approximately 5.8 times (up 0.4 times versus the previous quarter).
2025 Outlook
For 2025, KMI budgeted net income attributable to KMI of $2.8 billion, up 8% versus 2024 and Adjusted EPS of $1.27, up 10% from 2024. KMI expects to declare dividends of $1.17 per share for 2025, a 2% increase from the dividends declared for 2024. The company also budgeted 2025 Adjusted EBITDA of $8.3 billion, up 4% versus 2024, and to end 2025 with a Net Debt-to-Adjusted EBITDA ratio of 3.8 times. These amounts do not include contributions from the Outrigger Energy II acquisition discussed below.
The budget assumes average annual prices for West Texas Intermediate (WTI) crude oil and Henry Hub natural gas of $68 per barrel and $3.00 per million British thermal units (MMBtu), respectively, consistent with the published forward curve available during the company’s annual budget process.
We plan to publish our annual outlook and budget presentation, which will provide more detail on our 2025 budget, to KMI’s website at: https://ir.kindermorgan.com/events-and-presentations/default.aspx on Wednesday, February 5, 2025.
This press release includes Adjusted Net Income Attributable to KMI, Adjusted EPS, Adjusted Segment EBDA, Adjusted EBITDA, Net Debt, FCF and Project EBITDA, 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” and the tables accompanying our preliminary financial statements. Historically, KMI has disclosed budgeted distributable cash flow, or DCF, in the aggregate and per share. Consistent with KMI’s December 9, 2024 press release announcing 2025 financial expectations, this press release does not include discussion of DCF, due to declining investor interest in DCF as a primary performance measure. However, historical DCF is provided in Table 6 as supplemental information for comparability purposes.
Overview of Business Segments
“The Natural Gas Pipelines business segment’s improved financial performance in the fourth quarter of 2024 relative to the fourth quarter of 2023 was due primarily to continued higher contributions from our Texas Intrastate system, additional contributions from our STX Midstream acquisition and continued higher contributions from expansion projects on Tennessee Gas Pipeline (TGP), partially offset by lower contributions from our gathering systems due to lower volumes,” said KMI President Tom Martin.
“Natural gas transport volumes were flat to the fourth quarter of 2023. Natural gas gathering volumes were down 7% from the fourth quarter of 2023, primarily from our Haynesville and Bakken gathering systems due to lower commodity prices. On a full-year basis, gathering volumes were up 6% versus 2023.
“Contributions from the Products Pipelines business segment were up compared to the fourth quarter of 2023 on higher rates in the fourth quarter of 2024 and the impact of declining commodity prices in the prior year period, partially offset by lower volumes on our Hiland gathering system. Total refined products volumes were up 2%, and crude and condensate volumes were down 5%, compared to the fourth quarter of 2023,” Martin said.
“Terminals business segment earnings were up compared to the fourth quarter of 2023. The increase was led by our Jones Act tanker fleet, which benefited from higher rates and remains fully contracted under term charter agreements. Our bulk business benefited from increased contributions from our petroleum coke handling activities. Contributions from liquids terminals were higher versus the prior year period largely owing to the impact of expansion projects placed into service,” continued Martin.
“CO2 business segment earnings were down compared to the fourth quarter of 2023 due to the divestiture of certain assets earlier in the year and lower crude oil, CO2 and NGL volumes, partially offset by contributions from the North McElroy Unit acquired earlier in the year as well as lower power costs. Full year crude net-to-KMI volumes were down 6% versus the prior year, though within 1% of plan, and would have slightly exceeded plan excluding acquisitions and divestitures,” said Martin.
Other News
Natural Gas Pipelines
Net income attributable to KMI of $667 million, compared to $594 million in the fourth quarter of 2023.
Adjusted EBITDA of $2,063 million, up 7% versus the fourth quarter of 2023.
“The company enjoyed another exceptional quarter, with very strong operational and financial performance. We continued to internally fund high-quality capital projects while generating cash flow from operations of $1.5 billion and $0.7 billion in free cash flow (FCF) after capital expenditures. With robust market fundamentals and a new Administration committed to expediting energy infrastructure projects, the future looks bright,” said Executive Chairman Richard D. Kinder.
“KMI had a very strong fourth quarter on increased financial contributions from our Natural Gas Pipelines, Products Pipelines and Terminals business segments, with Adjusted EBITDA up 7% versus the fourth quarter of 2023. Our balance sheet remains healthy, as we ended the year with a Net Debt-to-Adjusted EBITDA ratio of 4.0 times,” said Chief Executive Officer Kim Dang.
“We are also today announcing the Trident Intrastate Pipeline Project, an approximately 216-mile pipeline build underpinned by long-term contracts that will provide approximately 1.5 billion cubic feet per day (Bcf/d) of capacity from Katy, Texas to the LNG and industrial corridor near Port Arthur, Texas,” continued Dang.
“Further, during the quarter we secured additional long-term, binding transportation agreements on our previously announced Mississippi Crossing Project, resulting in a current project subscription of approximately 1.8 Bcf/d. The estimated $1.6 billion project is now designed to transport up to 2.1 Bcf/d of natural gas through the construction of nearly 206 miles of 42-inch and 36-inch pipeline and three new compressor stations.
“For several quarters now, we have pointed to expected significant new natural gas demand for LNG, power plants, and emerging opportunities such as artificial intelligence operations, cryptocurrency mining, data centers and industrial re-shoring. These expectations are being realized. Our commercial teams have secured contracts to underpin three large natural gas projects - South System Expansion 4, Mississippi Crossing and Trident, totaling approximately $5 billion (KM share) in project costs. These projects are all progressing and are expected to contribute to significant future growth once in service,” said Dang.
“Our project backlog also reflects this strong natural gas demand. At the end of the fourth quarter of 2024, the backlog stood at $8.1 billion, a nearly 60% increase compared to $5.1 billion in the third quarter of 2024. Natural gas projects account for approximately 89% of the backlog. In calculating backlog Project EBITDA multiples, we exclude both the capital and EBITDA from our CO2 enhanced oil recovery projects and our gathering and processing projects, where first full year multiples are more favorable but the earnings are more uneven than with our other business segments. We expect the remaining $7.0 billion of projects in the backlog, when realized, to generate an aggregate first full year Project EBITDA multiple of approximately 5.8 times (up 0.4 times versus the previous quarter).
2025 Outlook
For 2025, KMI budgeted net income attributable to KMI of $2.8 billion, up 8% versus 2024 and Adjusted EPS of $1.27, up 10% from 2024. KMI expects to declare dividends of $1.17 per share for 2025, a 2% increase from the dividends declared for 2024. The company also budgeted 2025 Adjusted EBITDA of $8.3 billion, up 4% versus 2024, and to end 2025 with a Net Debt-to-Adjusted EBITDA ratio of 3.8 times. These amounts do not include contributions from the Outrigger Energy II acquisition discussed below.
The budget assumes average annual prices for West Texas Intermediate (WTI) crude oil and Henry Hub natural gas of $68 per barrel and $3.00 per million British thermal units (MMBtu), respectively, consistent with the published forward curve available during the company’s annual budget process.
We plan to publish our annual outlook and budget presentation, which will provide more detail on our 2025 budget, to KMI’s website at: https://ir.kindermorgan.com/events-and-presentations/default.aspx on Wednesday, February 5, 2025.
This press release includes Adjusted Net Income Attributable to KMI, Adjusted EPS, Adjusted Segment EBDA, Adjusted EBITDA, Net Debt, FCF and Project EBITDA, 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” and the tables accompanying our preliminary financial statements. Historically, KMI has disclosed budgeted distributable cash flow, or DCF, in the aggregate and per share. Consistent with KMI’s December 9, 2024 press release announcing 2025 financial expectations, this press release does not include discussion of DCF, due to declining investor interest in DCF as a primary performance measure. However, historical DCF is provided in Table 6 as supplemental information for comparability purposes.
Overview of Business Segments
“The Natural Gas Pipelines business segment’s improved financial performance in the fourth quarter of 2024 relative to the fourth quarter of 2023 was due primarily to continued higher contributions from our Texas Intrastate system, additional contributions from our STX Midstream acquisition and continued higher contributions from expansion projects on Tennessee Gas Pipeline (TGP), partially offset by lower contributions from our gathering systems due to lower volumes,” said KMI President Tom Martin.
“Natural gas transport volumes were flat to the fourth quarter of 2023. Natural gas gathering volumes were down 7% from the fourth quarter of 2023, primarily from our Haynesville and Bakken gathering systems due to lower commodity prices. On a full-year basis, gathering volumes were up 6% versus 2023.
“Contributions from the Products Pipelines business segment were up compared to the fourth quarter of 2023 on higher rates in the fourth quarter of 2024 and the impact of declining commodity prices in the prior year period, partially offset by lower volumes on our Hiland gathering system. Total refined products volumes were up 2%, and crude and condensate volumes were down 5%, compared to the fourth quarter of 2023,” Martin said.
“Terminals business segment earnings were up compared to the fourth quarter of 2023. The increase was led by our Jones Act tanker fleet, which benefited from higher rates and remains fully contracted under term charter agreements. Our bulk business benefited from increased contributions from our petroleum coke handling activities. Contributions from liquids terminals were higher versus the prior year period largely owing to the impact of expansion projects placed into service,” continued Martin.
“CO2 business segment earnings were down compared to the fourth quarter of 2023 due to the divestiture of certain assets earlier in the year and lower crude oil, CO2 and NGL volumes, partially offset by contributions from the North McElroy Unit acquired earlier in the year as well as lower power costs. Full year crude net-to-KMI volumes were down 6% versus the prior year, though within 1% of plan, and would have slightly exceeded plan excluding acquisitions and divestitures,” said Martin.
Other News
Natural Gas Pipelines
KMI is proceeding with its approximately $1.7 billion Trident Intrastate Pipeline project. The approximately 216-mile project is underpinned by long-term contracts and will provide approximately 1.5 Bcf/d of capacity from Katy, Texas to the LNG and industrial corridor near Port Arthur, Texas. Pending receipt of all required permits and approvals, KMI expects the project to be in service in the first quarter of 2027.
On January 13, 2025, KMI announced that its subsidiary, Hiland Partners Holdings LLC, agreed to purchase a natural gas gathering and processing system in North Dakota from Outrigger Energy II for $640 million. The acquisition includes a 270 million cubic feet per day (MMcf/d) processing facility and a 104-mile, large-diameter, high-pressure rich gas gathering header pipeline with 350 MMcf/d of capacity connecting supplies from the Williston Basin area to high-demand markets. The gathering and processing system is backed by long-term contracts with commitments from major customers in the basin. KMI expects the acquisition to be immediately accretive to its shareholders, with a 2025 Adjusted EBITDA multiple of approximately 8 times on a full-year basis. Adjusted EBITDA does not include approximately $20 million of expected cash payments in 2025 that receive deferred revenue recognition. The transaction is subject to clearance under Hart-Scott-Rodino and is expected to close in the first quarter of 2025.
On December 19, 2024, TGP announced its decision to proceed with its Mississippi Crossing (MSX) project after securing long-term, binding transportation agreements for 1.5 Bcf/d of capacity. Since then, TGP has secured additional long-term, binding transportation agreements resulting in a current project subscription of approximately 1.8 Bcf/d. The estimated $1.6 billion project is now designed to transport up to 2.1 Bcf/d of natural gas through the construction of nearly 206 miles of 42-inch and 36-inch pipeline and three new compressor stations. The project will originate near Greenville, Mississippi, and conclude near Butler, Alabama, with connections to the existing TGP system and third-party pipelines to provide critical supply access sourced from multiple supply basins. Pending the receipt of all required permits and clearances, the project is expected to be placed in service in November 2028.
Preliminary survey work is progressing on the South System Expansion 4 (SSE4) project designed to increase Southern Natural Gas’s (SNG) South Line capacity by approximately 1.2 Bcf/d. Upon completion, the approximately $3 billion project will help meet growing power generation and local distribution company demand in the Southeast. SSE4 will be completed in two phases and is almost entirely comprised of brownfield looping and horsepower compression additions on the SNG and Elba Express (EEC) pipeline systems (KM-share approximately $1.7 billion, including EEC). Subject to all required approvals, KMI expects to place the first phase of the project in service in the fourth quarter of 2028 and the second phase in the fourth quarter of 2029.
Preliminary construction activities are underway on the fully contracted Gulf Coast Express Pipeline LLC (GCX) expansion project. The $455 million expansion project (KM-share approximately $161 million) is designed to increase by 570 MMcf/d natural gas deliveries from the Permian Basin to South Texas markets. Subject to all required approvals, the project is expected to be in service in mid-2026.
Construction continues on the second phase of the approximately $672 million Evangeline Pass project, which has an expected in-service date of July 1, 2025. The two-phase project involves modifications and enhancements to portions of the TGP and SNG systems in Mississippi and Louisiana, resulting in the delivery of approximately 2 Bcf/d of natural gas to Venture Global’s Plaquemines LNG facility.
Terminals
On January 13, 2025, KMI announced that its subsidiary, Hiland Partners Holdings LLC, agreed to purchase a natural gas gathering and processing system in North Dakota from Outrigger Energy II for $640 million. The acquisition includes a 270 million cubic feet per day (MMcf/d) processing facility and a 104-mile, large-diameter, high-pressure rich gas gathering header pipeline with 350 MMcf/d of capacity connecting supplies from the Williston Basin area to high-demand markets. The gathering and processing system is backed by long-term contracts with commitments from major customers in the basin. KMI expects the acquisition to be immediately accretive to its shareholders, with a 2025 Adjusted EBITDA multiple of approximately 8 times on a full-year basis. Adjusted EBITDA does not include approximately $20 million of expected cash payments in 2025 that receive deferred revenue recognition. The transaction is subject to clearance under Hart-Scott-Rodino and is expected to close in the first quarter of 2025.
On December 19, 2024, TGP announced its decision to proceed with its Mississippi Crossing (MSX) project after securing long-term, binding transportation agreements for 1.5 Bcf/d of capacity. Since then, TGP has secured additional long-term, binding transportation agreements resulting in a current project subscription of approximately 1.8 Bcf/d. The estimated $1.6 billion project is now designed to transport up to 2.1 Bcf/d of natural gas through the construction of nearly 206 miles of 42-inch and 36-inch pipeline and three new compressor stations. The project will originate near Greenville, Mississippi, and conclude near Butler, Alabama, with connections to the existing TGP system and third-party pipelines to provide critical supply access sourced from multiple supply basins. Pending the receipt of all required permits and clearances, the project is expected to be placed in service in November 2028.
Preliminary survey work is progressing on the South System Expansion 4 (SSE4) project designed to increase Southern Natural Gas’s (SNG) South Line capacity by approximately 1.2 Bcf/d. Upon completion, the approximately $3 billion project will help meet growing power generation and local distribution company demand in the Southeast. SSE4 will be completed in two phases and is almost entirely comprised of brownfield looping and horsepower compression additions on the SNG and Elba Express (EEC) pipeline systems (KM-share approximately $1.7 billion, including EEC). Subject to all required approvals, KMI expects to place the first phase of the project in service in the fourth quarter of 2028 and the second phase in the fourth quarter of 2029.
Preliminary construction activities are underway on the fully contracted Gulf Coast Express Pipeline LLC (GCX) expansion project. The $455 million expansion project (KM-share approximately $161 million) is designed to increase by 570 MMcf/d natural gas deliveries from the Permian Basin to South Texas markets. Subject to all required approvals, the project is expected to be in service in mid-2026.
Construction continues on the second phase of the approximately $672 million Evangeline Pass project, which has an expected in-service date of July 1, 2025. The two-phase project involves modifications and enhancements to portions of the TGP and SNG systems in Mississippi and Louisiana, resulting in the delivery of approximately 2 Bcf/d of natural gas to Venture Global’s Plaquemines LNG facility.
Terminals
Construction is nearing completion on KMI’s latest expansion of its industry-leading RD and SAF feedstock storage and logistics offering at its lower Mississippi River hub. The approximately $54 million project at its Geismar River Terminal in Geismar, Louisiana involves the construction of multiple tanks totaling approximately 250,000 barrels of heated storage capacity as well as various marine, rail and pipeline infrastructure improvements. Due to contractor delays, the project is now expected to be in service in the first quarter of 2025.
ProductsIn December 2024, the Kinder Morgan petroleum condensate processing facility’s existing customer exercised its unilateral right to extend its contract at existing rates for five years, taking the term through 2030. The extension is a recognition of the competitive value of the processing facility’s connectivity in the Houston Ship Channel hub.
Energy Transition Ventures
ProductsIn December 2024, the Kinder Morgan petroleum condensate processing facility’s existing customer exercised its unilateral right to extend its contract at existing rates for five years, taking the term through 2030. The extension is a recognition of the competitive value of the processing facility’s connectivity in the Houston Ship Channel hub.
Energy Transition Ventures
Autumn Hills RNG is expected to be placed into service in the coming weeks. With a capacity of 0.8 Bcf of RNG annually, this additional facility will bring KMI’s total RNG generation capacity to 6.9 Bcf per year.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Access to reliable, affordable energy is a critical component for improving lives around the world. We are committed to providing energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of the people, communities and businesses we serve. We own an interest in or operate approximately 79,000 miles of pipelines, 139 terminals, 702 Bcf of working natural gas storage capacity and have renewable natural gas generation capacity of approximately 6.1 Bcf per year with an additional 0.8 Bcf in development. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2, renewable fuels and other products, and our terminals store and handle various commodities including gasoline, diesel fuel, jet fuel, chemicals, metals, petroleum coke, and ethanol and other renewable fuels and feedstocks. Learn more about our work advancing energy solutions on the lower carbon initiatives page at www.kindermorgan.com.
Please join Kinder Morgan, Inc. at 4:30 p.m. ET on Wednesday, January 22, at www.kindermorgan.com for a LIVE webcast conference call on the company’s fourth quarter earnings.
Non-GAAP Financial Measures
As described in further detail below, our management evaluates our performance primarily using Net income attributable to Kinder Morgan, Inc. and Segment earnings before DD&A expenses including amortization of excess cost of equity investments (EBDA), along with the non-GAAP financial measures of Adjusted Net income attributable to Common Stock, and distributable cash flow (DCF), both in the aggregate and per share for each, Adjusted Segment EBDA, Adjusted Net income attributable to Kinder Morgan, Inc., Adjusted earnings before interest, income taxes, DD&A expenses including amortization of excess cost of equity investments (EBITDA), and Net Debt.
Our non-GAAP financial measures described 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). (See the accompanying Tables 2, 3, and 5.) We also include adjustments related to joint ventures (see “Amounts from Joint Ventures” below).
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Access to reliable, affordable energy is a critical component for improving lives around the world. We are committed to providing energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of the people, communities and businesses we serve. We own an interest in or operate approximately 79,000 miles of pipelines, 139 terminals, 702 Bcf of working natural gas storage capacity and have renewable natural gas generation capacity of approximately 6.1 Bcf per year with an additional 0.8 Bcf in development. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2, renewable fuels and other products, and our terminals store and handle various commodities including gasoline, diesel fuel, jet fuel, chemicals, metals, petroleum coke, and ethanol and other renewable fuels and feedstocks. Learn more about our work advancing energy solutions on the lower carbon initiatives page at www.kindermorgan.com.
Please join Kinder Morgan, Inc. at 4:30 p.m. ET on Wednesday, January 22, at www.kindermorgan.com for a LIVE webcast conference call on the company’s fourth quarter earnings.
Non-GAAP Financial Measures
As described in further detail below, our management evaluates our performance primarily using Net income attributable to Kinder Morgan, Inc. and Segment earnings before DD&A expenses including amortization of excess cost of equity investments (EBDA), along with the non-GAAP financial measures of Adjusted Net income attributable to Common Stock, and distributable cash flow (DCF), both in the aggregate and per share for each, Adjusted Segment EBDA, Adjusted Net income attributable to Kinder Morgan, Inc., Adjusted earnings before interest, income taxes, DD&A expenses including amortization of excess cost of equity investments (EBITDA), and Net Debt.
Our non-GAAP financial measures described 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). (See the accompanying Tables 2, 3, and 5.) We also include adjustments related to joint ventures (see “Amounts from Joint Ventures” below).
