Kinder Morgan Inc (KMI)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	4,384,000	4,263,000	4,065,000	2,916,000	1,560,000
Interest expense	US$ in thousands	—	1,804,000	1,508,000	1,496,000	1,587,000
Interest coverage		—	2.36	2.70	1.95	0.98

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $4,384,000K ÷ $—K
= —

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations on its outstanding debt. In the case of Kinder Morgan Inc, the interest coverage ratio has shown an improving trend over the last few years.

As of December 31, 2020, Kinder Morgan's interest coverage ratio was 0.98, indicating that the company's operating income was just enough to cover its interest expenses. However, there was a significant improvement in the following years, with the ratio increasing to 1.95 by December 31, 2021, and further improving to 2.70 by December 31, 2022.

This positive trend suggests that Kinder Morgan's ability to cover its interest payments has strengthened, which is generally viewed as a positive indicator of financial health and stability. However, the ratio slightly decreased to 2.36 by December 31, 2023, indicating a slight reduction in the company's ability to cover interest expenses. Unfortunately, the data for December 31, 2024, is not available, so it is not possible to provide a complete analysis for that year.

Overall, the improving trend in Kinder Morgan's interest coverage ratio up to 2023 reflects a more favorable position in terms of meeting its interest obligations, which is vital for investors and creditors assessing the company's financial health.