Kinder Morgan’s (KMI) net debt stood at $37.0 billion at the end of 1Q18, $331 million higher quarter-over-quarter. Of the $331 million increase, nearly $100 million was associated with increased debt at Kinder Morgan Canada (KML.TO). Notably, Kinder Morgan’s net debt has fallen ~$5.8 billion since the end of 1Q15.
Kinder Morgan’s net debt-to-adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) ratio was 5.1x at the end of 1Q18. KMI has budgeted for a net debt-to-adjusted EBITDA ratio of ~5.1x in 2018. It currently expects to meet or beat the budgeted number. The above graph shows Kinder Morgan’s debt-to-EBITDA ratio over the last six years.
Enterprise Products Partners’ debt-to-adjusted EBITDA ratio was 4.1x at the end of 1Q18, unchanged from 2017. Enterprise Products’ debt-to-EBITDA ratio rose to 4.4x in 2016 due to acquisitions. Its ratio has remained below 4.5x—a number MLPs usually target—for the last several quarters.
Williams Partners’ adjusted net debt-to-EBITDA ratio was 3.5x at the end of 2017. The company is targeting an adjusted debt-to-EBITDA ratio of below 4.5x in 2018. Its ratio has come down significantly from more than 5x in June 2015 to 3.5x at the end of 2017. Williams Partners’ analyst-adjusted net debt-to-EBITDA ratio was 4.4x at the end of 1Q18.
MPLX reported a total debt-to-adjusted EBITDA ratio of 3.6x at the end of 2017. The company, whose total debt stood at $7.3 billion at the end of 2017, looks the least leveraged of the four companies. Next, let’s see what institutional investors are doing with their holdings of the abovementioned midstream companies.