Kinder Morgan Reports First Quarter 2024 Financial Results
- Earnings per share up 10% and adjusted earnings per share up 13%.
- Cash dividend of $0.2875 per share approved, a 2% increase over Q1 2023.
- Net income attributable to KMI is $746 million, with distributable cash flow of $1,422 million.
- Company internally funds high-quality capital projects and generates $570 million in free cash flow.
- Natural Gas Pipelines business segment expected to see substantial growth in demand for natural gas.
- Company budgeted net income of $2.7 billion for 2024, up 15% from 2023.
- 2024 DCF expected to be $5 billion, with Adjusted EBITDA of $8.16 billion.
- Company adjusting long-term leverage target to a range of 3.5 to 4.5 times Net Debt-to-Adjusted EBITDA.
- Construction ongoing for various expansion projects in Natural Gas Pipelines and Terminals business segments.
- Company committed to lower-carbon energy investments, including natural gas and renewable fuels.
- None.
Insights
Reviewing the first quarter financial results, Kinder Morgan's increase in earnings per share (EPS) by
However, it's important to weigh this against the backdrop of a Net Debt-to-Adjusted EBITDA ratio of 4.1 times. While this is within industry norms, a high debt load can constrain future financial flexibility. The forecasted budget with net income and dividend increases for 2024 signals further optimism, but hinges on consistent operational execution and energy market dynamics.
Kinder Morgan's optimism about the natural gas sector, especially with projected demand hikes for LNG exports and electricity generation, is notable. There is a clear strategic focus on projects that align with global energy transition trends. The allocation of nearly
Investors should be mindful of the geopolitical risks mentioned, such as the conflict in Ukraine and the Middle East. These factors can cause volatility in energy prices and supply, potentially impacting Kinder Morgan's operations and profitability.
Additionally, the Biden Administration's stance on LNG exports could shape the regulatory environment, affecting long-term strategic decisions. Kinder Morgan's ability to navigate these political headwinds will be critical.
From an environmental policy perspective, Kinder Morgan's emphasis on energy transition investments is a strategic move in response to the current regulatory and societal push towards sustainability. The company's entry into RNG and sustainable fuels, coupled with carbon capture initiatives, puts them at the forefront of the midstream sector's adaptation to a lower-carbon economy.
Investors should note that such initiatives may not only mitigate transition risks but also open up new revenue streams. However, the execution risk of these new ventures and their integration with the traditional business model needs careful scrutiny. The long-term success will depend on market adoption rates and the supportive regulatory framework for green energy infrastructure.
Earnings per Share up
Approves Cash Dividend of
The company is reporting:
-
First quarter earnings per share (EPS) of
$0.33 $0.64 10% and5% , respectively, compared to the first quarter of 2023. -
Net income attributable to KMI of
$746 million $679 million -
DCF of
$1,422 million $1,374 million
“The ongoing war in
“Kinder Morgan has throughout our history been a leader in the midstream sector, developing an extensive, interconnected network of fee-based assets in the energy infrastructure space, and now with a growing footprint in the energy transition. The dividend declared this quarter represents the seventh consecutive year in which we have increased the dividend. In the first quarter we continued to internally fund high-quality capital projects while generating cash flow from operations of
“The company got off to a strong start this quarter on increased financial contributions from our Natural Gas Pipelines, Products Pipelines and Terminals business segments, with Net income attributable to KMI up
“KMI’s balance sheet is strong, as we ended the quarter with a Net Debt-to-Adjusted EBITDA ratio of 4.1 times,” continued Dang.
“Notwithstanding the current low natural gas price environment, the future looks very bright for our Natural Gas Pipelines business segment. We expect demand for natural gas to grow substantially between now and 2030, led by more than a doubling of demand for liquefied natural gas (LNG) exports and a more than
“Our project backlog at the end of the first quarter was
“We are devoting nearly
2024 Outlook
For 2024, including contributions from the acquired STX Midstream assets, KMI budgeted net income attributable to KMI of
The budget assumes average annual prices for West Texas Intermediate (WTI) crude oil and Henry Hub natural gas of
“Although natural gas prices are expected to be significantly below budget for the full year, given that we have modest direct commodity price exposure and have seen strong execution across our businesses, there’s no change to our full year budget guidance,” said Dang.
This press release includes Adjusted Net income attributable to KMI and DCF, in each case in the aggregate and per share, Adjusted Segment EBDA, Adjusted EBITDA, Net Debt, FCF (free cash flow), and Project EBITDA, all of which are non-GAAP financial measures. For descriptions of these non-GAAP financial measures and reconciliations to the most comparable measures prepared in accordance with generally accepted accounting principles, please see “Non-GAAP Financial Measures” and the tables accompanying our preliminary financial statements.
Overview of Business Segments
“The Natural Gas Pipelines business segment’s financial performance was up in the first quarter of 2024 relative to the first quarter of 2023, largely due to higher margins realized on our storage assets and higher volumes on our gathering systems, as well as additional contributions from our recent STX Midstream acquisition,” said KMI President Tom Martin.
“Natural gas transport volumes were up
“Contributions from the Products Pipelines business segment were up compared to the first quarter of 2023 due to higher rates on existing assets and contributions from new capital projects. Total refined products and crude and condensate volumes were down slightly compared to the first quarter of 2023,” Martin said.
“Terminals business segment earnings were up compared to the first quarter of 2023. Increased contributions from liquids terminals expansion projects and higher rates on our Jones Act tankers were partially offset by lower petroleum coke volumes resulting from several refinery turnarounds and unplanned outages. The Jones Act fleet remains fully contracted under term charter agreements,” continued Martin.
“CO2 business segment earnings were down compared to the first quarter of 2023, primarily due to lower CO2 sales volumes, which were down
Other News
Corporate
- KMI is adjusting its long-term leverage target from around 4.5 times Net Debt-to-Adjusted EBITDA to a range of 3.5 to 4.5 times. This is consistent with how we have operated over the past several years. We believe this target range is appropriate over the long term given our significant scale and high-quality energy infrastructure assets which produce stable, fee-based cash flows backed by multi-year contracts.
-
In January 2024, KMI issued
$1.25 billion 5.00% senior notes due February 2029 and$1.00 billion 5.40% senior notes due February 2034 to repay outstanding commercial paper (mainly incurred for the acquisition of STX Midstream), maturing debt and for general corporate purposes. The rates on the notes were favorable compared to budgeted rates.
Natural Gas Pipelines
-
Construction is nearly complete on KMI’s project to expand the working gas storage capacity at its Markham Storage facility (
Markham ) inMatagorda County along the Texas Gulf Coast. The project adds an additional cavern atMarkham to provide more than 6 billion cubic feet (Bcf) of incremental working gas storage capacity and 650 million cubic feet per day (MMcf/d) of incremental withdrawal capacity on KMI’s extensiveTexas intrastate system. Shippers have subscribed to all of the available capacity under long-term agreements. Partial commercial service began last November, with full commercial service expected in June 2024.
-
Construction activities continue for Tejas’ approximately
$97 million South Texas to Houston Market expansion project. The project will add compression on Tejas’ mainline to increase natural gas deliveries by approximately 0.35 Bcf/d toHouston markets. The target in-service date is the first quarter of 2025.
-
Construction is underway on an approximately
$180 million Webb County . The expansion project, supported by a long-term contract, is designed to deliver up to 500 MMcf/d of Eagle Ford natural gas supply into our Intrastate network. The project is currently on track to be placed in service in November 2024.
-
Construction has begun on both phases of the Evangeline Pass project. The two-phase
$673 million Mississippi andLouisiana , which will result in the delivery of approximately 2 Bcf/d of natural gas to Venture Global’s proposed Plaquemines LNG facility. The expected in-service date for phase 1 is July 1, 2024, while the expected in-service date for phase 2 is July 1, 2025.
-
TGP has executed long-term contracts to support its approximately
$63 million
Terminals
-
Civil and tank foundation work continues on KMI’s latest expansion of its industry-leading RD and sustainable aviation fuel feedstock storage and logistics offering in its lower Mississippi River hub. The scope of work at its Geismar River Terminal in
Geismar, Louisiana includes construction of multiple tanks totaling approximately 250,000 barrels of heated storage capacity as well as various marine, rail and pipeline infrastructure improvements. The approximately$54 million
Energy Transition Ventures
-
Construction continues on the previously announced conversion of the Autumn Hills,
Michigan , landfill gas-to-electric facility to an RNG facility. The RNG facility is expected to be placed in service in the fourth quarter of 2024 with a capacity of 0.8 Bcf of RNG annually. Once complete and in service, this additional facility will bring KMI’s total RNG generation capacity to 6.9 Bcf per year.
- On April 12, Kinder Morgan Energy Transitions Ventures (ETV) group and TGS Cedar Port Partners, LP executed a pore space lease agreement composed of approximately 10,800 acres near the Houston Ship Channel, with total CO2 storage capacity in excess of 300 million tonnes. This lease will give ETV a geographically and geologically advantaged platform to develop CO2 sequestration solutions for nearby sources of emissions.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in
Please join Kinder Morgan, Inc. at 4:30 p.m. ET on Wednesday, April 17, at www.kindermorgan.com for a LIVE webcast conference call on the company’s first quarter earnings.
Non-GAAP Financial Measures
As described in further detail below, our management evaluates our performance primarily using Net income attributable to Kinder Morgan, Inc. and Segment earnings before DD&A expenses, including amortization of excess cost of equity investments, (EBDA) along with the non-GAAP financial measures of Adjusted Net income attributable to Common Stock, and distributable cash flow (DCF), both in the aggregate and per share for each, Adjusted Segment EBDA, Adjusted Net income attributable to Kinder Morgan, Inc., Adjusted earnings before interest, income taxes, DD&A expenses, including amortization of excess cost of equity investments, (EBITDA) and Net Debt.
Our non-GAAP financial measures described below should not be considered alternatives to GAAP net income attributable to Kinder Morgan, Inc. or other GAAP measures and have important limitations as analytical tools. Our computations of these non-GAAP financial measures may differ from similarly titled measures used by others. You should not consider these non-GAAP financial measures in isolation or as substitutes for an analysis of our results as reported under GAAP. Management compensates for the limitations of our consolidated non-GAAP financial measures by reviewing our comparable GAAP measures identified in the descriptions of consolidated non-GAAP measures below, understanding the differences between the measures and taking this information into account in its analysis and its decision-making processes.
Certain Items, as adjustments used to calculate our non-GAAP financial measures, are items that are required by GAAP to be reflected in net income attributable to Kinder Morgan, Inc., but typically either (1) do not have a cash impact (for example, unsettled commodity hedges and asset impairments), or (2) by their nature are separately identifiable from our normal business operations and in most cases are likely to occur only sporadically (for example, certain legal settlements, enactment of new tax legislation and casualty losses). (See the accompanying Tables 2, 3, 4, and 6.) We also include adjustments related to joint ventures (see “Amounts from Joint Ventures” below).
The following table summarizes our Certain Items for the three months ended March 31, 2024 and 2023.
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
|
(In millions) |
||||||
Certain Items |
|
|
|
||||
Fair value amortization |
$ |
— |
|
|
$ |
(4 |
) |
Change in fair value of derivative contracts (1) |
|
50 |
|
|
|
(68 |
) |
(Gain) loss on divestitures and impairment, net |
|
(29 |
) |
|
|
67 |
|
Income tax Certain Items (2) |
|
(9 |
) |
|
|
1 |
|
Total Certain Items (3)(4) |
$ |
12 |
|
|
$ |
(4 |
) |
Notes |
|
(1) |
Gains or losses are reflected when realized. |
(2) |
Represents the income tax provision on Certain Items plus discrete income tax items. Includes the impact of KMI’s income tax provision on Certain Items affecting earnings from equity investments and is separate from the related tax provision recognized at the investees by the joint ventures which are also taxable entities. |
(3) |
Amount for the period ending March 31, 2023 includes the following amounts reported within “Earnings from equity investments” on the accompanying Preliminary Consolidated Statements of Income: (i) |
(4) |
Amounts for the periods ending March 31, 2024 and 2023 include, in aggregate, |
Adjusted Net Income Attributable to Kinder Morgan, Inc. is calculated by adjusting net income attributable to Kinder Morgan, Inc. for Certain Items. Adjusted Net Income Attributable to Kinder Morgan, Inc. is used by us, investors and other external users of our financial statements as a supplemental measure that provides decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations. We believe the GAAP measure most directly comparable to Adjusted Net Income Attributable to Kinder Morgan, Inc. is net income attributable to Kinder Morgan, Inc. (See the accompanying Tables 1 and 2.)
Adjusted Net Income Attributable to Common Stock and Adjusted EPS is calculated by adjusting Net income attributable to Kinder Morgan, Inc., the most comparable GAAP measure, for Certain Items, and further for net income allocated to participating securities and adjusted net income in excess of distributions for participating securities. We believe Adjusted Net Income Attributable to Common Stock allows for calculation of adjusted earnings per share (Adjusted EPS) on the most comparable basis with earnings per share, the most comparable GAAP measure to Adjusted EPS. Adjusted EPS is calculated as Adjusted Net Income Attributable to Common Stock divided by our weighted average shares outstanding. Adjusted EPS applies the same two-class method used in arriving at basic earnings per share. Adjusted EPS is used by us, investors and other external users of our financial statements as a per-share supplemental measure that provides decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations. (See the accompanying Table 2.)
DCF is calculated by adjusting net income attributable to Kinder Morgan, Inc. for Certain Items, and further for DD&A and amortization of excess cost of equity investments, income tax expense, cash taxes, sustaining capital expenditures and other items. We also adjust amounts from joint ventures for income taxes, DD&A, cash taxes and sustaining capital expenditures (see “Amounts from Joint Ventures” below). DCF is a significant performance measure used by us, investors and other external users of our financial statements to evaluate our performance and to measure and estimate the ability of our assets to generate economic earnings after paying interest expense, paying cash taxes and expending sustaining capital. DCF provides additional insight into the specific costs associated with our assets in the current period and facilitates period-to-period comparisons of our performance from ongoing business activities. DCF is also used by us, investors, and other external users to compare the performance of companies across our industry. DCF per share serves as the primary financial performance target for purposes of annual bonuses under our annual incentive compensation program and for performance-based vesting of equity compensation grants under our long-term incentive compensation program. DCF should not be used as an alternative to net cash provided by operating activities computed under GAAP. We believe the GAAP measure most directly comparable to DCF is net income attributable to Kinder Morgan, Inc. DCF per share is DCF divided by average outstanding shares, including restricted stock awards that participate in dividends. (See the accompanying Table 2.)
Adjusted Segment EBDA is calculated by adjusting segment earnings before DD&A and amortization of excess cost of equity investments, general and administrative expenses and corporate charges, interest expense, and income taxes (Segment EBDA) for Certain Items attributable to the segment. Adjusted Segment EBDA is used by management in its analysis of segment performance and management of our business. We believe Adjusted Segment EBDA is a useful performance metric because it provides management, investors and other external users of our financial statements additional insight into performance trends across our business segments, our segments’ relative contributions to our consolidated performance and the ability of our segments to generate earnings on an ongoing basis. Adjusted Segment EBDA is also used as a factor in determining compensation under our annual incentive compensation program for our business segment presidents and other business segment employees. We believe it is useful to investors because it is a measure that management uses to allocate resources to our segments and assess each segment’s performance. (See the accompanying Table 4.)
Adjusted EBITDA is calculated by adjusting net income attributable to Kinder Morgan, Inc. for Certain Items and further for DD&A and amortization of excess cost of equity investments, income tax expense and interest. We also include amounts from joint ventures for income taxes and DD&A (see “Amounts from Joint Ventures” below). Adjusted EBITDA (on a rolling 12-months basis) is used by management, investors and other external users, in conjunction with our Net Debt (as described further below), to evaluate our leverage. Management and external users also use Adjusted EBITDA as an important metric to compare the valuations of companies across our industry. Our ratio of Net Debt-to-Adjusted EBITDA is used as a supplemental performance target for purposes of our annual incentive compensation program. We believe the GAAP measure most directly comparable to Adjusted EBITDA is net income attributable to Kinder Morgan, Inc. (See the accompanying Tables 3 and 6.)
Amounts from Joint Ventures - Certain Items, DCF and Adjusted EBITDA reflect amounts from unconsolidated joint ventures (JVs) and consolidated JVs utilizing the same recognition and measurement methods used to record “Earnings from equity investments” and “Noncontrolling interests (NCI),” respectively. The calculations of DCF and Adjusted EBITDA related to our unconsolidated and consolidated JVs include the same items (DD&A and income tax expense, and for DCF only, also cash taxes and sustaining capital expenditures) with respect to the JVs as those included in the calculations of DCF and Adjusted EBITDA for our wholly-owned consolidated subsidiaries; further, we remove the portion of these adjustments attributable to non-controlling interests. (See Tables 2, 3, and 6.) Although these amounts related to our unconsolidated JVs are included in the calculations of DCF and Adjusted EBITDA, such inclusion should not be understood to imply that we have control over the operations and resulting revenues, expenses or cash flows of such unconsolidated JVs.
Net Debt is calculated by subtracting from debt (1) cash and cash equivalents, (2) debt fair value adjustments, and (3) the foreign exchange impact on Euro-denominated bonds for which we have entered into currency swaps to convert that debt to
Project EBITDA is calculated for an individual capital project as earnings before interest expense, taxes, DD&A and general and administrative expenses attributable to such project, or for JV projects, consistent with the methods described above under “Amounts from Joint Ventures,” and in conjunction with capital expenditures for the project, is the basis for our Project EBITDA multiple. Management, investors and others use Project EBITDA to evaluate our return on investment for capital projects before expenses that are generally not controllable by operating managers in our business segments. We believe the GAAP measure most directly comparable to Project EBITDA is the portion of net income attributable to a capital project. We do not provide the portion of budgeted net income attributable to individual capital projects (the GAAP financial measure most directly comparable to Project EBITDA) due to the impracticality of predicting, on a project-by-project basis through the second full year of operations, certain amounts required by GAAP, such as projected commodity prices, unrealized gains and losses on derivatives marked to market, and potential estimates for certain contingent liabilities associated with the project completion.
FCF is calculated by reducing cash flow from operations for capital expenditures (sustaining and expansion), and FCF after dividends is calculated by further reducing FCF for dividends paid during the period. FCF is used by management, investors and other external users as an additional leverage metric, and FCF after dividends provides additional insight into cash flow generation. Therefore, we believe FCF is useful to our investors. We believe the GAAP measure most directly comparable to FCF is cash flow from operations. (See the accompanying Table 7.)
Important Information Relating to Forward-Looking Statements
This news release includes forward-looking statements within the meaning of the
Table 1 |
||||||||||
Kinder Morgan, Inc. and Subsidiaries |
||||||||||
Preliminary Consolidated Statements of Income |
||||||||||
(In millions, except per share amounts, unaudited) |
||||||||||
|
|
|
|
|
|
|||||
|
Three Months Ended
|
|
%
|
|||||||
|
2024 |
|
2023 |
|
||||||
Revenues |
$ |
3,842 |
|
|
$ |
3,888 |
|
|
|
|
Operating costs, expenses and other |
|
|
|
|
|
|||||
Costs of sales (exclusive of items shown separately below) |
|
1,107 |
|
|
|
1,215 |
|
|
|
|
Operations and maintenance |
|
680 |
|
|
|
639 |
|
|
|
|
Depreciation, depletion and amortization |
|
587 |
|
|
|
565 |
|
|
|
|
General and administrative |
|
175 |
|
|
|
166 |
|
|
|
|
Taxes, other than income taxes |
|
111 |
|
|
|
110 |
|
|
|
|
Gain on divestitures, net |
|
(32 |
) |
|
|
— |
|
|
|
|
Other income, net |
|
(9 |
) |
|
|
(1 |
) |
|
|
|
Total operating costs, expenses and other |
|
2,619 |
|
|
|
2,694 |
|
|
|
|
Operating income |
|
1,223 |
|
|
|
1,194 |
|
|
|
|
Other income (expense) |
|
|
|
|
|
|||||
Earnings from equity investments |
|
243 |
|
|
|
165 |
|
|
|
|
Amortization of excess cost of equity investments |
|
(12 |
) |
|
|
(17 |
) |
|
|
|
Interest, net |
|
(472 |
) |
|
|
(445 |
) |
|
|
|
Other, net |
|
— |
|
|
|
2 |
|
|
|
|
Income before income taxes |
|
982 |
|
|
|
899 |
|
|
|
|
Income tax expense |
|
(209 |
) |
|
|
(196 |
) |
|
|
|
Net income |
|
773 |
|
|
|
703 |
|
|
|
|
Net income attributable to NCI |
|
(27 |
) |
|
|
(24 |
) |
|
|
|
Net income attributable to Kinder Morgan, Inc. |
$ |
746 |
|
|
$ |
679 |
|
|
|
|
Class P Shares |
|
|
|
|
|
|||||
Basic and diluted earnings per share |
$ |
0.33 |
|
|
$ |
0.30 |
|
|
10 |
% |
Basic and diluted weighted average shares outstanding |
|
2,220 |
|
|
|
2,247 |
|
|
(1 |
)% |
Declared dividends per share |
$ |
0.2875 |
|
|
$ |
0.2825 |
|
|
2 |
% |
Adjusted Net Income Attributable to Kinder Morgan, Inc. (1) |
$ |
758 |
|
|
$ |
675 |
|
|
12 |
% |
Adjusted EPS (1) |
$ |
0.34 |
|
|
$ |
0.30 |
|
|
13 |
% |
Notes |
|
(1) |
Adjusted Net Income Attributable to Kinder Morgan, Inc. is Net income attributable to Kinder Morgan, Inc. adjusted for Certain Items. Adjusted EPS calculation uses Adjusted Net Income Attributable to Common Stock. See Table 2 for reconciliations. |
Table 2 |
||||||||||
Kinder Morgan, Inc. and Subsidiaries |
||||||||||
Preliminary Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Kinder Morgan, Inc., to |
||||||||||
Adjusted Net Income Attributable to Common Stock and to DCF Reconciliations |
||||||||||
(In millions, except per share amounts, unaudited) |
||||||||||
|
|
|
|
|
|
|||||
|
Three Months Ended
|
|
%
|
|||||||
|
2024 |
|
2023 |
|
||||||
Net income attributable to Kinder Morgan, Inc. |
$ |
746 |
|
|
$ |
679 |
|
|
10 |
% |
Certain Items (1) |
|
|
|
|
|
|||||
Fair value amortization |
|
— |
|
|
|
(4 |
) |
|
|
|
Change in fair value of derivative contracts |
|
50 |
|
|
|
(68 |
) |
|
|
|
(Gain) loss on divestitures and impairment, net |
|
(29 |
) |
|
|
67 |
|
|
|
|
Income tax Certain Items |
|
(9 |
) |
|
|
1 |
|
|
|
|
Total Certain Items |
|
12 |
|
|
|
(4 |
) |
|
400 |
% |
Adjusted Net Income Attributable to Kinder Morgan, Inc. |
$ |
758 |
|
|
$ |
675 |
|
|
12 |
% |
|
|
|
|
|
|
|||||
Net income attributable to Kinder Morgan, Inc. |
$ |
746 |
|
|
$ |
679 |
|
|
10 |
% |
Total Certain Items (2) |
|
12 |
|
|
|
(4 |
) |
|
|
|
Net income allocated to participating securities (3) |
|
(4 |
) |
|
|
(4 |
) |
|
|
|
Adjusted Net Income Attributable to Common Stock |
$ |
754 |
|
|
$ |
671 |
|
|
12 |
% |
|
|
|
|
|
|
|||||
Net income attributable to Kinder Morgan, Inc. |
$ |
746 |
|
|
$ |
679 |
|
|
10 |
% |
Total Certain Items (2) |
|
12 |
|
|
|
(4 |
) |
|
400 |
% |
DD&A |
|
587 |
|
|
|
565 |
|
|
|
|
Amortization of excess cost of equity investments |
|
12 |
|
|
|
17 |
|
|
|
|
Income tax expense (4) |
|
218 |
|
|
|
195 |
|
|
|
|
Cash taxes |
|
2 |
|
|
|
(1 |
) |
|
|
|
Sustaining capital expenditures |
|
(169 |
) |
|
|
(156 |
) |
|
|
|
Amounts from joint ventures |
|
|
|
|
|
|||||
Unconsolidated JV DD&A |
|
86 |
|
|
|
81 |
|
|
|
|
Remove consolidated JV partners' DD&A |
|
(16 |
) |
|
|
(16 |
) |
|
|
|
Unconsolidated JV income tax expense (5)(6) |
|
22 |
|
|
|
26 |
|
|
|
|
Unconsolidated JV cash taxes (5) |
|
(57 |
) |
|
|
— |
|
|
|
|
Unconsolidated JV sustaining capital expenditures |
|
(34 |
) |
|
|
(29 |
) |
|
|
|
Remove consolidated JV partners' sustaining capital expenditures |
|
3 |
|
|
|
2 |
|
|
|
|
Other items (7) |
|
10 |
|
|
|
15 |
|
|
|
|
DCF |
$ |
1,422 |
|
|
$ |
1,374 |
|
|
3 |
% |
Weighted average shares outstanding for dividends (8) |
|
2,233 |
|
|
|
2,260 |
|
|
|
|
DCF per share |
$ |
0.64 |
|
|
$ |
0.61 |
|
|
5 |
% |
Declared dividends per share |
$ |
0.2875 |
|
|
$ |
0.2825 |
|
|
|
|
Notes |
|
(1) |
See table included in “Non-GAAP Financial Measures—Certain Items.” |
(2) |
For a detailed listing, see the above reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Adjusted Net Income Attributable to Kinder Morgan, Inc. |
(3) |
Net income allocated to common stock and participating securities is based on the amount of dividends paid in the current period plus an allocation of the undistributed earnings or excess distributions over earnings to the extent that each security participates in earnings or excess distributions over earnings, as applicable. |
(4) |
To avoid duplication, adjustments for income tax expense for the periods ended March 31, 2024 and 2023 exclude |
(5) |
Associated with our Citrus, NGPL and Products (SE) Pipe Line equity investments. |
(6) |
Includes the tax provision on Certain Items recognized by the investees that are taxable entities. The impact of KMI’s income tax provision on Certain Items affecting earnings from equity investments is included within “Certain Items” above. See table included in “Non-GAAP Financial Measures—Certain Items.” |
(7) |
Includes non-cash pension expense, non-cash compensation associated with our restricted stock program and pension contributions. |
(8) |
Includes restricted stock awards that participate in dividends. |
Table 3 |
||||||||||
Kinder Morgan, Inc. and Subsidiaries |
||||||||||
Preliminary Net Income Attributable to Kinder Morgan, Inc. to Adjusted EBITDA Reconciliation |
||||||||||
(In millions, unaudited) |
||||||||||
|
|
|
|
|
|
|||||
|
Three Months Ended
|
|
%
|
|||||||
|
2024 |
|
2023 |
|
||||||
Net income attributable to Kinder Morgan, Inc. |
$ |
746 |
|
|
$ |
679 |
|
|
10 |
% |
Certain Items (1) |
|
|
|
|
|
|||||
Fair value amortization |
|
— |
|
|
|
(4 |
) |
|
|
|
Change in fair value of derivative contracts |
|
50 |
|
|
|
(68 |
) |
|
|
|
(Gain) loss on divestitures and impairment, net |
|
(29 |
) |
|
|
67 |
|
|
|
|
Income tax Certain Items |
|
(9 |
) |
|
|
1 |
|
|
|
|
Total Certain Items |
|
12 |
|
|
|
(4 |
) |
|
|
|
DD&A |
|
587 |
|
|
|
565 |
|
|
|
|
Amortization of excess cost of equity investments |
|
12 |
|
|
|
17 |
|
|
|
|
Income tax expense (2) |
|
218 |
|
|
|
195 |
|
|
|
|
Interest, net (3) |
|
470 |
|
|
|
453 |
|
|
|
|
Amounts from joint ventures |
|
|
|
|
|
|||||
Unconsolidated JV DD&A |
|
86 |
|
|
|
81 |
|
|
|
|
Remove consolidated JV partners' DD&A |
|
(16 |
) |
|
|
(16 |
) |
|
|
|
Unconsolidated JV income tax expense (4) |
|
22 |
|
|
|
26 |
|
|
|
|
Adjusted EBITDA |
$ |
2,137 |
|
|
$ |
1,996 |
|
|
7 |
% |
Notes |
|
(1) |
See table included in “Non-GAAP Financial Measures—Certain Items.” |
(2) |
To avoid duplication, adjustments for income tax expense for the periods ended March 31, 2024 and 2023 exclude |
(3) |
To avoid duplication, adjustments for interest, net for the periods ended March 31, 2024 and 2023 exclude |
(4) |
Includes the tax provision on Certain Items recognized by the investees that are taxable entities associated with our Citrus, NGPL and Products (SE) Pipe Line equity investments. The impact of KMI’s income tax provision on Certain Items affecting earnings from equity investments is included within “Certain Items” above. |
Table 4 |
|||||||
Kinder Morgan, Inc. and Subsidiaries |
|||||||
Preliminary Reconciliation of Segment EBDA to Adjusted Segment EBDA |
|||||||
(In millions, unaudited) |
|||||||
|
|
|
|
||||
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
Segment EBDA (1) |
|
|
|
||||
Natural Gas Pipelines Segment EBDA |
$ |
1,514 |
|
|
$ |
1,495 |
|
Certain Items (2) |
|
|
|
||||
Change in fair value of derivative contracts |
|
39 |
|
|
|
(65 |
) |
Gain on divestiture |
|
(29 |
) |
|
|
— |
|
Natural Gas Pipelines Adjusted Segment EBDA |
$ |
1,524 |
|
|
$ |
1,430 |
|
|
|
|
|
||||
Products Pipelines Segment EBDA |
$ |
292 |
|
|
$ |
184 |
|
Certain Items (2) |
|
|
|
||||
Change in fair value of derivative contracts |
|
1 |
|
|
|
— |
|
Loss on impairment |
|
— |
|
|
|
67 |
|
Products Pipelines Adjusted Segment EBDA |
$ |
293 |
|
|
$ |
251 |
|
|
|
|
|
||||
Terminals Segment EBDA |
$ |
269 |
|
|
$ |
254 |
|
|
|
|
|
||||
CO2 Segment EBDA |
$ |
158 |
|
|
$ |
172 |
|
Certain Items (2) |
|
|
|
||||
Change in fair value of derivative contracts |
|
8 |
|
|
|
1 |
|
CO2 Adjusted Segment EBDA |
$ |
166 |
|
|
$ |
173 |
|
Notes |
|
(1) |
Includes revenues, earnings from equity investments, operating expenses, gain on divestitures, net, other income, net, and other, net. Operating expenses include costs of sales, operations and maintenance expenses, and taxes, other than income taxes. The composition of Segment EBDA is not addressed nor prescribed by generally accepted accounting principles. |
(2) |
See “Non-GAAP Financial Measures—Certain Items.” |
Table 5 |
|||||||
Segment Volume and CO2 Segment Hedges Highlights |
|||||||
(Historical data is pro forma for acquired and divested assets, JV volumes at KMI share (1)) |
|||||||
|
|
|
|
||||
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
Natural Gas Pipelines |
|
|
|
||||
Transport volumes (BBtu/d) |
|
41,432 |
|
|
|
40,429 |
|
Sales volumes (BBtu/d) |
|
2,563 |
|
|
|
2,117 |
|
Gathering volumes (BBtu/d) |
|
3,584 |
|
|
|
3,069 |
|
NGLs (MBbl/d) |
|
37 |
|
|
|
33 |
|
Products Pipelines (MBbl/d) |
|
|
|
||||
Gasoline (2) |
|
924 |
|
|
|
948 |
|
Diesel fuel |
|
335 |
|
|
|
328 |
|
Jet fuel |
|
274 |
|
|
|
271 |
|
Total refined product volumes |
|
1,533 |
|
|
|
1,547 |
|
Crude and condensate |
|
456 |
|
|
|
460 |
|
Total delivery volumes (MBbl/d) |
|
1,989 |
|
|
|
2,007 |
|
Terminals |
|
|
|
||||
Liquids leasable capacity (MMBbl) |
|
78.6 |
|
|
|
78.5 |
|
Liquids leased capacity % |
|
93.8 |
% |
|
|
92.8 |
% |
Bulk transload tonnage (MMtons) |
|
13.5 |
|
|
|
13.4 |
|
CO2 |
|
|
|
||||
SACROC oil production |
|
19.11 |
|
|
|
19.26 |
|
|
|
6.25 |
|
|
|
6.74 |
|
Other |
|
2.05 |
|
|
|
2.61 |
|
Total oil production - net (MBbl/d) (3) |
|
27.41 |
|
|
|
28.61 |
|
NGL sales volumes - net (MBbl/d) (3) |
|
8.87 |
|
|
|
8.16 |
|
CO2 sales volumes - net (Bcf/d) |
|
0.335 |
|
|
|
0.362 |
|
RNG sales volumes (BBtu/d) |
|
7 |
|
|
|
5 |
|
Realized weighted average oil price ($ per Bbl) |
$ |
68.70 |
|
|
$ |
67.15 |
|
Realized weighted average NGL price ($ per Bbl) |
$ |
28.23 |
|
|
$ |
34.06 |
|
CO2 Segment Hedges |
Remaining
|
|
2025 |
|
2026 |
|
2027 |
|
2028 |
|||||
Crude Oil (4) |
|
|
|
|
|
|
|
|
|
|||||
Price ($ per Bbl) |
$ |
66.16 |
|
$ |
64.52 |
|
$ |
65.35 |
|
$ |
64.67 |
|
$ |
63.18 |
Volume (MBbl/d) |
|
22.73 |
|
|
14.05 |
|
|
9.20 |
|
|
4.70 |
|
|
0.30 |
NGLs |
|
|
|
|
|
|
|
|
|
|||||
Price ($ per Bbl) |
$ |
47.77 |
|
$ |
34.26 |
|
|
|
|
|
|
|||
Volume (MBbl/d) |
|
3.84 |
|
|
0.08 |
|
|
|
|
|
|
|||
Notes |
|
(1) |
Volumes for acquired assets are included for all periods, except for volumes associated with NET Mexico, Eagle Ford Transmission, |
(2) |
Gasoline volumes include ethanol pipeline volumes. |
(3) |
Net of royalties and outside working interests. |
(4) |
Includes West Texas Intermediate hedges. |
Table 6 |
|||||||
Kinder Morgan, Inc. and Subsidiaries |
|||||||
Preliminary Consolidated Balance Sheets |
|||||||
(In millions, unaudited) |
|||||||
|
|
|
|
||||
|
March 31, |
|
December 31, |
||||
|
2024 |
|
2023 |
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
119 |
|
|
$ |
83 |
|
Other current assets |
|
2,188 |
|
|
|
2,459 |
|
Property, plant and equipment, net |
|
37,313 |
|
|
|
37,297 |
|
Investments |
|
7,906 |
|
|
|
7,874 |
|
Goodwill |
|
20,094 |
|
|
|
20,121 |
|
Deferred charges and other assets |
|
3,116 |
|
|
|
3,186 |
|
Total assets |
$ |
70,736 |
|
|
$ |
71,020 |
|
Liabilities and Stockholders' Equity |
|
|
|
||||
Short-term debt |
$ |
1,975 |
|
|
$ |
4,049 |
|
Other current liabilities |
|
2,600 |
|
|
|
3,172 |
|
Long-term debt |
|
30,071 |
|
|
|
27,880 |
|
Debt fair value adjustments |
|
100 |
|
|
|
187 |
|
Other |
|
4,247 |
|
|
|
4,003 |
|
Total liabilities |
|
38,993 |
|
|
|
39,291 |
|
Other stockholders' equity |
|
30,648 |
|
|
|
30,523 |
|
Accumulated other comprehensive loss |
|
(276 |
) |
|
|
(217 |
) |
Total KMI stockholders' equity |
|
30,372 |
|
|
|
30,306 |
|
Noncontrolling interests |
|
1,371 |
|
|
|
1,423 |
|
Total stockholders' equity |
|
31,743 |
|
|
|
31,729 |
|
Total liabilities and stockholders' equity |
$ |
70,736 |
|
|
$ |
71,020 |
|
|
|
|
|
||||
Net Debt (1) |
$ |
31,931 |
|
|
$ |
31,837 |
|
|
|
|
|
||||
Table 6 (continued) |
|||||||
Kinder Morgan, Inc. and Subsidiaries |
|||||||
Preliminary Consolidated Balance Sheets |
|||||||
(In millions, unaudited) |
|||||||
|
|
|
|
||||
|
Adjusted EBITDA Twelve Months Ended (2) |
||||||
Reconciliation of Net Income Attributable to Kinder Morgan, Inc. to Last Twelve Months Adjusted EBITDA |
March 31, |
|
December 31, |
||||
2024 |
|
2023 |
|||||
Net income attributable to Kinder Morgan, Inc. |
$ |
2,458 |
|
|
$ |
2,391 |
|
Total Certain Items (3) |
|
36 |
|
|
|
19 |
|
DD&A |
|
2,272 |
|
|
|
2,250 |
|
Amortization of excess cost of equity investments |
|
61 |
|
|
|
66 |
|
Income tax expense (4) |
|
705 |
|
|
|
682 |
|
Interest, net (4) |
|
1,821 |
|
|
|
1,804 |
|
Amounts from joint ventures |
|
|
|
||||
Unconsolidated JV DD&A |
|
328 |
|
|
|
323 |
|
Less: Consolidated JV partners' DD&A |
|
(63 |
) |
|
|
(63 |
) |
Unconsolidated JV income tax expense |
|
85 |
|
|
|
89 |
|
Adjusted EBITDA |
$ |
7,703 |
|
|
$ |
7,561 |
|
|
|
|
|
||||
Net Debt-to-Adjusted EBITDA (5) |
|
4.1 |
|
|
|
4.2 |
|
Notes |
|
(1) |
Amounts calculated as total debt, less (i) cash and cash equivalents; (ii) debt fair value adjustments; and (ii) the foreign exchange impact on our Euro denominated debt of |
(2) |
Reflects the rolling 12-month amounts for each period above. |
(3) |
See table included in “Non-GAAP Financial Measures—Certain Items.” |
(4) |
Amounts are adjusted for Certain Items. See “Non-GAAP Financial Measures—Certain Items” for more information. |
(5) |
Year-end 2023 net debt reflects borrowings to fund the STX Midstream acquisition that closed on December 28, 2023. Including a full year of Adjusted EBITDA from the acquired assets on a Pro Forma basis, the leverage ratio would have been 4.1x. |
Table 7 |
|||||||
Kinder Morgan, Inc. and Subsidiaries |
|||||||
Preliminary Supplemental Information |
|||||||
(In millions, unaudited) |
|||||||
|
|
|
|
||||
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
KMI FCF |
|
|
|
||||
Net income attributable to Kinder Morgan, Inc. |
$ |
746 |
|
|
$ |
679 |
|
Net income attributable to noncontrolling interests |
|
27 |
|
|
|
24 |
|
DD&A |
|
587 |
|
|
|
565 |
|
Amortization of excess cost of equity investments |
|
12 |
|
|
|
17 |
|
Deferred income taxes |
|
198 |
|
|
|
190 |
|
Earnings from equity investments |
|
(243 |
) |
|
|
(165 |
) |
Distribution of equity investment earnings (1) |
|
183 |
|
|
|
188 |
|
Working capital and other items |
|
(321 |
) |
|
|
(165 |
) |
Cash flow from operations |
|
1,189 |
|
|
|
1,333 |
|
Capital expenditures (GAAP) |
|
(619 |
) |
|
|
(507 |
) |
FCF |
|
570 |
|
|
|
826 |
|
Dividends paid |
|
(631 |
) |
|
|
(627 |
) |
FCF after dividends |
$ |
(61 |
) |
|
$ |
199 |
|
Notes |
|
(1) |
Periods ended March 31, 2024 and 2023 exclude distributions from equity investments in excess of cumulative earnings of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240417193542/en/
Dave Conover
Media Relations
Newsroom@kindermorgan.com
Investor Relations
(800) 348-7320
km_ir@kindermorgan.com
Source: Kinder Morgan, Inc.
FAQ
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