Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Kinder Morgan's free cash flow margin weakened in the first quarter compared to both the prior quarter and the same quarter a year ago. The decline reflects lower operating cash flow relative to revenue combined with higher capital expenditure.
- Cash conversion from revenue to free cash flow decreased as operating cash flow was lower and capital expenditure was higher than the year-ago quarter. The free cash flow margin contracted accordingly.
- Sequentially, revenue and operating cash flow both fell, while capital expenditure was slightly lower, resulting in a substantially lower free cash flow and margin. Compared to the same quarter last year, revenue was stable, but operating cash flow decreased and capital expenditure increased, leading to a lower free cash flow and margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.9B
Trailing twelve-month free cash flow.
Quarter free cash flow
$570.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$619.0M
Capital spending and related asset purchases.
FCF margin
16.7%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2023-06-30 | $3.1B | $1.6B | $535.0M | $1.0B | 32.7% |
| 2023-09-30 | $3.5B | $1.3B | $647.0M | $639.0M | 18.1% |
| 2023-12-31 | $3.6B | $2.3B | $628.0M | $1.7B | 47.5% |
| 2024-03-31 | $3.4B | $1.2B | $619.0M | $570.0M | 16.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 76.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 18.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$32.0B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating Cash Flow Decline
Operating cash flow decreased compared to both the prior quarter and the year-ago quarter, while revenue remained similar to the prior year. This was the primary factor behind the lower free cash flow.
The lower operating cash flow significantly reduced the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion from revenue to free cash flow decreased as operating cash flow was lower and capital expenditure was higher than the year-ago quarter. The free cash flow margin contracted accordingly.
Sequentially, revenue and operating cash flow both fell, while capital expenditure was slightly lower, resulting in a substantially lower free cash flow and margin. Compared to the same quarter last year, revenue was stable, but operating cash flow decreased and capital expenditure increased, leading to a lower free cash flow and margin.
Monitor the relationship between capital expenditure and operating cash flow, as the gap widened in the current quarter.