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Kinder Morgan, Inc.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Oil & Gas MidstreamSector: Energy

Fair Value Summary

Current Price$26.33
5Y Range3.59 – 12.10
5Y Selected7.85
(-) Safety Margin78.34%
5Y Buy Price$1.70
Upside (to Buy Price)-93.55%
10Y Range5.17 – 13.71
10Y Selected9.44
(-) Safety Margin78.34%
10Y Buy Price$2.04
Upside (to Buy Price)-92.24%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.0631
Revenue R2 (10Y)0.2470
Net Income R2 (5Y)0.7189
Net Income R2 (10Y)0.5989
EBITDA R2 (5Y)0.8921
EBITDA R2 (10Y)0.3035
FCF R2 (5Y)0.0001
FCF R2 (10Y)0.6736
Safety Score0.2166

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth4.65%4.57%4.50%4.43%4.36%4.29%4.22%4.14%4.07%4.00%
Revenue15,773.3016,494.8117,237.4818,001.2218,785.8819,591.2520,417.0921,263.0922,128.8723,014.03
EBITDA6,990.277,310.037,639.167,977.638,325.368,682.289,048.279,423.199,806.8910,199.16
D&A-2,435.29-2,546.68-2,661.35-2,779.26-2,900.41-3,024.75-3,152.26-3,282.87-3,416.54-3,553.21
EBIT4,554.994,763.344,977.815,198.365,424.965,657.535,896.026,140.326,390.346,645.95
Pro forma Taxes-1,558.95-1,630.26-1,703.66-1,779.14-1,856.69-1,936.29-2,017.91-2,101.53-2,187.10-2,274.58
NOPAT2,996.043,133.093,274.163,419.223,568.263,721.243,878.104,038.804,203.254,371.38
Capital Expenditures-2,660.21-2,781.89-2,907.14-3,035.95-3,168.28-3,304.11-3,443.39-3,586.07-3,732.09-3,881.37
NWC Investment19.5320.1220.7121.3021.8822.4623.0323.5924.1424.68
(+) D&A2,435.292,546.682,661.352,779.262,900.413,024.753,152.263,282.873,416.543,553.21
Free Cash Flow2,790.652,918.003,049.073,183.833,322.273,464.343,610.003,759.193,911.844,067.89
Diluted Shares Outstanding2,222,000,000.002,222,000,000.002,222,000,000.002,222,000,000.002,222,000,000.002,222,000,000.002,222,000,000.002,222,000,000.002,222,000,000.002,222,000,000.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.451.452.463.464.465.466.467.468.46
Valuation Date1/17/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.12%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF2,766.462,805.872,687.402,569.932,458.042,349.402,244.022,141.892,043.001,947.33
Raw: 48,646.03
34,458.23
Raw: 59,563.75
27,298.80

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value47,745.9351,312.15
(-) Net Debt32,344.0032,344.00
Equity Value15,401.9318,968.15
(/) Shares Out2,222.002,222.00
Fair Value$6.93$8.54
(-) Safety Margin78.34%78.34%
Buy Price$1.50$1.85
Current Price$26.33$26.33
Upside (to Buy Price)-94.30%-92.98%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.62%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF2,763.932,794.382,652.082,512.892,381.652,255.712,134.972,019.291,908.571,802.67
Raw: 39,839.59
27,218.76
Raw: 48,780.86
20,601.83

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value40,323.6943,827.96
(-) Net Debt32,344.0032,344.00
Equity Value7,979.6911,483.96
(/) Shares Out2,222.002,222.00
Fair Value$3.59$5.17
(-) Safety Margin78.34%78.34%
Buy Price$0.78$1.12
Current Price$26.33$26.33
Upside (to Buy Price)-97.05%-95.75%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.62%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.890.830.760.710.650.600.560.52
PV UFCF2,769.012,817.522,723.532,628.812,537.612,447.902,359.732,273.172,188.272,105.10
Raw: 62,278.36
45,752.96
Raw: 76,255.61
37,954.70

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value59,229.4462,805.35
(-) Net Debt32,344.0032,344.00
Equity Value26,885.4430,461.35
(/) Shares Out2,222.002,222.00
Fair Value$12.10$13.71
(-) Safety Margin78.34%78.34%
Buy Price$2.62$2.97
Current Price$26.33$26.33
Upside (to Buy Price)-90.05%-88.72%

Reverse DCF: Market Implied Growth

Current Price$26.33
WACC Used9.1%
IMPLIED REVENUE GROWTH146.36%
Metric2027202820292030203120322033203420352036
Implied Revenue40,425.5999,593.42245,360.64604,476.121,489,201.303,668,830.649,038,615.7222,267,741.9954,859,322.37135,152,690.94
Constant Implied Growth146.36%146.36%146.36%146.36%146.36%146.36%146.36%146.36%146.36%146.36%
Implied Free Cash Flow4.049.9624.5460.45148.92366.88903.862,226.775,485.9313,515.27
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF3.768.0418.1540.9992.57209.04472.051,065.972,407.155,435.77

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$21.174.52%$5.05-76.16%
20182018-12-31$15.388.44%$5.44-64.64%
20172017-12-31$18.078.78%$-2.79-115.42%
20162016-12-31$20.712.34%$-3.40-116.42%
20152015-12-31$14.92-3.19%$-11.27-175.54%
20142014-12-31$42.31-0.77%$-26.51-162.65%
20132013-12-31$36.00-16.26%$-29.65-182.35%
20122012-12-31$35.33-24.98%$-33.29-194.23%
20112011-12-31$32.17-20.42%$-14.46-144.94%
20102010-12-31$31.05-9.77%$-9.37-130.18%
20092009-12-31$31.055.50%$-12.46-140.13%
20082008-12-31$31.055.38%$0.00-100.00%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$9.06
Median
$8.42
10th Percentile
$5.14
90th Percentile
$13.74

Fair Value Distribution

$1.38 - $2.76
7
$2.76 - $4.14
37
$4.14 - $5.52
93
$5.52 - $6.90
162
$6.90 - $8.28
184
$8.28 - $9.67
154
$9.67 - $11.05
111
$11.05 - $12.43
87
$12.43 - $13.81
69
$13.81 - $15.19
34
$15.19 - $16.58
28
$16.58 - $17.96
13
$17.96 - $19.34
8
$19.34 - $20.72
4
$20.72 - $22.10
5
$22.10 - $23.48
2
$23.48 - $24.87
1
$24.87 - $26.25
0
$26.25 - $27.63
0
$27.63 - $29.01
1