Earnings per Share up 10%; Adjusted Earnings
per Share up 13%
Approves Cash Dividend of $0.2875 Per Share
($1.15 Annualized)
Kinder Morgan, Inc.’s (NYSE: KMI) board of directors today
approved a cash dividend of $0.2875 per share for the first quarter
($1.15 annualized), payable on May 15, 2024, to stockholders of
record as of the close of business on April 30, 2024. This dividend
is a 2% increase over the first quarter of 2023.
The company is reporting:
- First quarter earnings per share (EPS) of $0.33 and
distributable cash flow (DCF) per share of $0.64, up 10% and 5%,
respectively, compared to the first quarter of 2023.
- Net income attributable to KMI of $746 million, compared to
$679 million in the first quarter of 2023.
- DCF of $1,422 million for the quarter, compared to $1,374
million in the first quarter of 2023.
“The ongoing war in Ukraine and conflict in the Middle East have
served to highlight to policy makers and the public at large the
crucial role energy plays on the global stage. It has often been
said that energy security is national security. Clearly the
delivery of energy by companies located in stable countries that
respect the rule of law is more important now than ever. We are
proud to be one such company and are committed to serving our
customers for many years to come,” said Executive Chairman Richard
D. Kinder.
“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 $1.2 billion and $570
million in free cash flow after capital expenditures,” Kinder
concluded.
“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 10% and Adjusted EBITDA up 7% versus the
first quarter of 2023,” said Chief Executive Officer Kim Dang.
“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 50% increase in
exports to Mexico. We are also anticipating significant new natural
gas demand for electric generation associated with artificial
intelligence operations, crypto currency mining and data centers,
which would be additive to the growth discussed above,” continued
Dang. “It’s also important to note that the Biden Administration’s
'pause' in approving LNG exports to non-Free Trade Agreement
countries, while disappointing, will likely have no impact on our
planned projects to support LNG exports.”
“Our project backlog at the end of the first quarter was $3.3
billion, up from $3 billion at year-end 2023. In calculating
backlog Project EBITDA multiples, we exclude both the capital and
EBITDA from CO2 enhanced oil recovery projects and our gathering
and processing projects, where the earnings are more uneven than
with our other business segments. To compensate for those uneven
earnings profiles we require higher return thresholds for those
projects. We expect the remaining $2 billion of projects in the
backlog to generate an average Project EBITDA multiple of under 5.0
times.
“We are devoting nearly 80% of our project backlog to
lower-carbon energy investments, including natural gas, renewable
natural gas (RNG), renewable diesel (RD), feedstocks associated
with RD and sustainable aviation fuel, as well as carbon capture
and sequestration,” Dang concluded.
2024 Outlook
For 2024, including contributions from the acquired STX
Midstream assets, KMI budgeted net income attributable to KMI of
$2.7 billion ($1.22 per share), up 15% versus 2023, and expects to
declare dividends of $1.15 per share for 2024, a 2% increase from
the dividends declared for 2023. The company also budgeted 2024 DCF
of $5 billion ($2.26 per share), and Adjusted EBITDA of $8.16
billion, both up 8% versus 2023, and to end 2024 with a Net
Debt-to-Adjusted EBITDA ratio of 3.9 times.
The budget assumes average annual prices for West Texas
Intermediate (WTI) crude oil and Henry Hub natural gas of $82 per
barrel and $3.50 per million British thermal unit (MMBtu),
respectively, consistent with the forward curve extant during the
company’s annual budget process.
“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 2% compared to the first
quarter of 2023. Natural gas gathering volumes were up 17% from the
first quarter of 2023, primarily from our Haynesville and Eagle
Ford gathering systems.
“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 7% on a net-to-KMI basis compared to the first
quarter of 2023. Price movements across our three primary
commodities roughly offset one another,” said Martin. “Growth in
NGL sales volumes was offset by lower crude volumes.”
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 of 5.00% senior notes
due February 2029 and $1.00 billion of 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) in Matagorda County along the Texas Gulf Coast. The
project adds an additional cavern at Markham 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 extensive Texas 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 to Houston markets. The
target in-service date is the first quarter of 2025.
- Construction is underway on an approximately $180 million
expansion of the KMTP system to provide transportation and treating
services to lean Eagle Ford producers in 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 project involves modifications
and enhancements to portions of the Tennessee Gas Pipeline and
Southern Natural Gas systems in Mississippi and Louisiana, 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 Muskrat project. The Muskrat project is
designed to deliver up to 225 MMcf/d of supply to the Southeast
markets. The project includes modifications to TGP’s existing
compression and auxiliary facilities and is expected to be in
service on August 1, 2025.
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 Geismar River Terminal project, which is
supported by a long-term commercial commitment, is expected to be
in service by the fourth quarter of 2024.
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 North America. Access to reliable,
affordable energy is a critical component for improving lives
around the world. We are committed to providing energy
transportation and storage services in a safe, efficient and
environmentally responsible manner for the benefit of the people,
communities and businesses we serve. We own an interest in or
operate approximately 79,000 miles of pipelines, 139 terminals, 702
billion cubic feet of working natural gas storage capacity and have
renewable natural gas generation capacity of approximately 6.1 Bcf
per year with an additional 0.8 Bcf in development. Our pipelines
transport natural gas, refined petroleum products, crude oil,
condensate, CO2, renewable fuels and other products, and our
terminals store and handle various commodities including gasoline,
diesel fuel, jet fuel, chemicals, metals, petroleum coke, and
ethanol and other renewable fuels and feedstocks. Learn more about
our work advancing energy solutions on the lower carbon initiatives
page at www.kindermorgan.com.
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
March 31,
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) $(2) million included within “Change in
fair value of derivative contracts” and (ii) $67 million included
within “(Gain) loss on divestitures and impairment, net” for a
non-cash impairment related to our investment in Double Eagle
Pipeline LLC in our Products Pipelines business segment.
(4)
Amounts for the periods ending March 31,
2024 and 2023 include, in aggregate, $2 million and $(8) million,
respectively, included within “Interest, net” on the accompanying
Preliminary Consolidated Statements of Income which consist of (i)
$(4) million for the 2023 period only of “Fair value amortization”
and (ii) $2 million and $(4) million, respectively, of “Change in
fair value of derivative contracts.”
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 U.S. dollars. Net Debt, on its own
and in conjunction with our Adjusted EBITDA (on a rolling 12-months
basis) as part of a ratio of Net Debt-to-Adjusted EBITDA, is a
non-GAAP financial measure that is used by management, investors
and other external users of our financial information to evaluate
our leverage. Our ratio of Net Debt-to-Adjusted EBITDA is also used
as a supplemental performance target for purposes of our annual
incentive compensation program. We believe the most comparable
measure to Net Debt is total debt as reconciled in the notes to the
accompanying Preliminary Consolidated Balance Sheets in Table
6.
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 U.S. Private Securities Litigation Reform Act of
1995 and Section 21E of the Securities Exchange Act of 1934.
Generally the words “expects,” “believes,” “anticipates,” “plans,”
“will,” “shall,” “estimates,” “projects,” and similar expressions
identify forward-looking statements, which are generally not
historical in nature. Forward-looking statements in this news
release include, among others, express or implied statements
pertaining to: the long-term demand for KMI’s assets and services;
energy evolution-related opportunities; KMI’s 2024 expectations;
anticipated dividends; and KMI’s capital projects, including
expected costs, completion timing and benefits of those projects.
Forward-looking statements are subject to risks and uncertainties
and are based on the beliefs and assumptions of management, based
on information currently available to them. Although KMI believes
that these forward-looking statements are based on reasonable
assumptions, it can give no assurance as to when or if any such
forward-looking statements will materialize nor their ultimate
impact on our operations or financial condition. Important factors
that could cause actual results to differ materially from those
expressed in or implied by these forward-looking statements
include: the timing and extent of changes in the supply of and
demand for the products we transport and handle; commodity prices;
counterparty financial risk; and the other risks and uncertainties
described in KMI’s reports filed with the Securities and Exchange
Commission (SEC), including its Annual Report on Form 10-K for the
year-ended December 31, 2023 (under the headings “Risk Factors” and
“Information Regarding Forward-Looking Statements” and elsewhere),
and its subsequent reports, which are available through the SEC’s
EDGAR system at www.sec.gov and on our website at
ir.kindermorgan.com. Forward-looking statements speak only as of
the date they were made, and except to the extent required by law,
KMI undertakes no obligation to update any forward-looking
statement because of new information, future events or other
factors. Because of these risks and uncertainties, readers should
not place undue reliance on these forward-looking statements.
Table 1
Kinder Morgan, Inc. and
Subsidiaries
Preliminary Consolidated
Statements of Income
(In millions, except per share
amounts, unaudited)
Three Months Ended
March 31,
% change
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
March 31,
% change
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 $(9) million and $1 million, respectively, which amounts
are already included within “Certain Items.” See table included in
“Non-GAAP Financial Measures—Certain Items.”
(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
March 31,
% change
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 $(9) million and $1 million, respectively, which amounts
are already included within “Certain Items.” See table included in
“Non-GAAP Financial Measures—Certain Items.”
(3)
To avoid duplication, adjustments for
interest, net for the periods ended March 31, 2024 and 2023 exclude
$2 million and $(8) million, respectively, which amounts are
already included within “Certain Items.” See table included in
“Non-GAAP Financial Measures—Certain Items.”
(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
March 31,
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
December 31,
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
Yates oil production
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 2024
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, Dos Caminos and Mission Natural Gas which
are excluded from both periods. However, EBDA contributions from
acquisitions are included only for periods subsequent to their
acquisition. Volumes for assets divested, idled and/or held for
sale are excluded for all periods presented.
(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
$(4) million and $9 million as of March 31, 2024 and December 31,
2023, respectively, as we have entered into swaps to convert that
debt to U.S.$.
(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
March 31,
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 $35 million and $61 million, respectively.
These are included in cash flows from investing activities on our
consolidated statement of cash flows.
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
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