The operator welcomes participants to the Quarterly Earnings Conference Call and reminds them that the call is being recorded. Mr. Rich Kinder, Executive Chairman of Kinder Morgan, will be leading the call and reminds listeners to review the disclosures on forward-looking statements and use of non-GAAP financial measures. The company is projecting healthy growth in EBITDA, EPS, and DCF per share for 2024, thanks to their strategy of expanding assets through expansion CapEx and acquisitions in their Natural Gas segment. The management team will provide more details on the budget at the upcoming Investment Conference.

The speaker discusses the expected growth in natural gas production and demand, driven by LNG exports and exports to Mexico. They mention opportunities for system expansion, particularly along the Gulf Coast, and compare their growth to that of high-tech companies. They also mention the recent NextEra South Texas acquisition and anticipate overall growth in 2024.

The company has updated its budget guidance to include the recent acquisition in South Texas, projecting 15% growth in earnings per share and 8% growth in DCF per share for 2024. Commodity assumptions remain unchanged, but even at current prices, the company expects strong growth. In the fourth quarter, the company put $965 million of projects in service and added $344 million to the backlog. They are confident in their ability to spend at the high end of their discretionary CapEx range for the next few years, driven by expected growth in the natural gas market. They are also considering multiple expansion projects to meet demand in various markets. The company's balance sheet is currently the strongest it has been in a decade.

KMI is projecting strong growth for 2024, with their natural gas business driving much of this growth. They plan to return capital to investors through dividends and share repurchases. At their upcoming Investor Conference, they will provide more details on their budget and future opportunities. In the fourth quarter of 2023, their natural gas business saw a 5% increase in transport volumes and a 27% increase in gathering volumes. Refined product volumes in their Products Pipeline segment were up slightly, driven by an increase in jet fuel.

The company has seen a significant increase in renewable diesel volumes flowing through their pipelines in California, with expectations for even higher volumes in January. Their RD hub projects are supported by take or pay contracts, ensuring revenue even if volumes do not flow. Crude and condensate volumes were up 7% in the quarter, and the company's terminals business segment has high lease capacity and strong utilization at key hubs. Jones Act tankers are fully leased, and bulk volumes were up 3% primarily from metals, pet coke, and soda ash. CO2 segment experienced lower volumes and prices, and overall oil production was down 7% but above plan for the quarter.

The company's net oil volumes for the year exceeded expectations, offsetting some of the price weakness experienced. The fourth quarter dividend for 2023 has been declared with a 2% increase from the previous year. The company also repurchased over 31 million shares at a good value for shareholders. Net debt to adjusted EBITDA was 4.2 times, including the acquisition of South Texas Midstream assets. The company saw better-than-budgeted performance in natural gas and terminals businesses. Quarterly revenues were down due to a decline in commodity prices, but the company's margin was not impacted due to offsetting purchase and sales positions.

In the fourth quarter of 2023, interest expense was higher compared to the previous year due to short-term interest rates and net income attributable to KMI decreased by 11%. The Terminals and Products segments saw an increase, while the Natural Gas and CO2 segments saw a decrease. DCF per share was also down from the previous year, excluding interest expense. The company ended the year with $31.8 billion in net debt, an increase from the previous year due to cash flow from operations, dividends, CapEx, stock repurchases, and the South Texas Midstream acquisition. The acquisition was found to be accretive on both EPS and DCF per share.

The company is pleased with the projected growth for 2024, including EPS, DCF per share, and EBITDA growth, as well as an improved leverage ratio. They will provide more details at their upcoming Investor Day meeting. The operator then opens up the call for questions, with the first one asking about potential opportunities from the recent cold weather. The company responds that while there may be some opportunities, it is not on the same scale as a previous cold snap and they have already budgeted for some cold weather.

The speaker thanks the person for their helpful response and asks about the company's capital allocation strategy. They mention Kinder's recent repurchases and M&A activity and ask about the priority between the two. The speaker also asks if there are any caps or limitations on share repurchases. The speaker notes that the company's balance sheet is currently in a good position with flexibility for both acquisitions and repurchases. They mention that in the past year, the company was able to make a large acquisition while also repurchasing shares without significantly impacting their debt metrics. The speaker concludes by saying they will attend the upcoming Analyst Day.

The speaker discusses the quarterly performance and guidance for the Natural Gas segment. They mention that the year-over-year decline was due to winter storms in 4Q '22. They clarify that the majority of the business is contracted, but they also provide ancillary services during winter storms. They also mention making money from storage and transport capacity, as well as providing similar services to intrastate customers.

The speaker discusses the potential for increased demand for natural gas in the Agua Dulce market, and the need for further Permian egress in the back half of the decade. They mention their company's successful track record in building pipelines and their ability to offer additional services to shippers. They also mention ongoing discussions about the GCX expansion and potential downstream expansions. The company will approach these projects with discipline and a focus on attractive returns for shareholders.

David Michels and Brian Reynolds are discussing the need for capacity in the back half of the decade. They mention the competitive environment and the need to take action in the next few quarters to meet the timeline. Brian thanks David for the extra information and Jean Ann Salisbury asks about the Haynesville production trajectory, to which Kim Dang responds that their Haynesville volumes have continued to increase and David adds that their acreage is in prime position for the upcoming LNG demand.

In the paragraph, David Michels and Jean Ann Salisbury discuss the pullback in demand and the company's capacity to support customers. They also mention their plans to increase gas infrastructure out of the Bakken and anticipate no limitations on growth. The next question from John Mackay is about the increase in 2024 guidance from $8 billion to $8.16 billion, and whether it is solely due to STX or if there are other factors involved.

Kim Dang discusses the $8.0 billion in revenue that was slightly below the published amount but rounded up to $8.0 billion. The difference between this amount and the $8.16 billion is due to the EBITDA on NextEra, which is consistent with expectations. She also talks about the contribution of RNG plants in the fourth quarter, which was relatively small due to inconsistent operations. She mentions that they recently took over operations from Waste Management and expect to improve consistency in the future. In regards to STX, there is expected growth in 2024 due to a contracted expansion project, and there may be further growth opportunities through integration in the future.

Kim Dang, the CFO of the company, discussed the growth of the company and the factors driving it. She mentioned that the company's longer-term multiple is expected to be between 7 and 7.5 times, lower than the 8.6 times it was when they acquired it. This decrease was driven by cost-savings and commercial synergies, but these benefits will not be seen for another three to four years. When asked about their leverage targets, Dang stated that they aim for a leverage of 4.5 times and have no plans to change that. They currently run at around 4 times and have enough room for potential opportunities or risks. The company has recently acquired NextEra assets and bought back $500 million in shares without significantly impacting their debt to EBITDA multiple. They have the capacity to make strategic and financially beneficial acquisitions if they find them. The next question came from Neal Dingmann with Truist.

An analyst asks about the Permian nat gas egress and if there have been any changes in customer expectations. Management responds that there is a sense of urgency to find a solution and discusses potential expansion of RD projects in California, with the potential to double storage and throughput capacity.

In the paragraph, the speaker discusses the potential for converting their facilities to renewable diesel and the volume assumptions for the STX acquisition in the Eagle Ford. They also mention their comfort with a leverage ratio of 4.5 times due to the size and stability of their assets and cash flow. The speaker notes that they will provide more details on these topics at the upcoming Investor Conference.

During an analyst call, the Kinder Morgan executives discussed the company's financial cushion and potential for expansion of their GCX system. They also mentioned the potential for downstream expansions and the ability to extend their system. The company expects to be at the upper end of their expansion CapEx target and does not anticipate significant CapEx associated with the STX acquisition in order to reach their long-term guidance.

The company is discussing the potential for increased demand for gasoline imports in California due to a shortage of gasoline as refineries convert to renewable diesel. They believe that their waterborne terminals will continue to be utilized regardless of where the gasoline is produced or imported from. The company is also considering building a new pipeline in the Permian region, with potential markets in Agua Dulce, Carthage, and Houston. Ultimately, the decision will be driven by customer contracts.

Kim Dang, speaking about M&A, suggests that the company is open to opportunities outside of the US but has found that risk-adjusted returns are generally lower in international markets. However, they will still evaluate potential opportunities and consider any synergies with their existing assets. In regards to the EPA's Good Neighbor Act, Dang mentions that the company believes the rule and process are flawed and heavily challenged, with every state that has requested a stay on their state plans prevailing in court.

The speaker discusses the appeal of the Federal plans to the Supreme Court and the positive sign of a requested hearing in February. They mention that only three states are currently impacted by the rule and that the potential impacts disclosed in the 10-K are smaller. A question is asked by Harry Mateer and the operator announces that there are no further questions. The conference call ends with thanks and a goodbye.

This summary was generated with AI and may contain some inaccuracies.