Kinder Morgan Reports Second Quarter 2024 Financial Results
Approves Cash Dividend of
E arnings per Share Flat to Second Quarter 2023; Adjusted Earnings per Share Up 4%
The company is reporting:
-
Second quarter earnings per share (EPS) of
$0.26 and distributable cash flow (DCF) per share of$0.49 , flat and up 2%, respectively, compared to the second quarter of 2023. -
Net income attributable to KMI of
$575 million , compared to$586 million in the second quarter of 2023. -
DCF of
$1,100 million for the quarter, compared to$1,076 million in the second quarter of 2023.
“In the second quarter we enjoyed another solid quarter of strong operational and financial performance. We continued to internally fund high-quality capital projects while generating cash flow from operations of
“As a leader in the midstream sector with an extensive, interconnected network of fee-based assets in the energy infrastructure space, we are proud to play a significant role in maintaining energy security for
“The company had a solid second quarter on increased financial contributions from our Natural Gas Pipelines, Products Pipelines and Terminals business segments, with Adjusted EBITDA up 3% versus the second quarter of 2023,” said Chief Executive Officer
“KMI’s balance sheet remains very strong, as we ended the quarter with a Net Debt-to-Adjusted EBITDA ratio of 4.1 times,” continued Dang.
“Notwithstanding the current low-price environment for natural gas, the future looks very bright for our Natural Gas Pipelines business segment. As I noted last quarter, we expect demand for natural gas to grow substantially between now and 2030, led by more than a doubling of demand for LNG exports and an almost 50% increase in natural gas exports to
“Our project backlog at the end of the second quarter was
“We are devoting approximately 80% of our project backlog to lower-carbon energy investments, including conventional natural gas, renewable natural gas (RNG), renewable diesel (RD), feedstocks associated with RD and sustainable aviation fuel (SAF), 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
The budget assumes average annual prices for West Texas Intermediate (WTI) crude oil and
“We expect to be roughly in-line with our budget for the full year (on budget or within 1-2% below). Lower than budgeted commodity prices, winter weather impacts and start-up delays on our RNG facilities as well as lower G&P volumes are expected to be offset or mostly offset by better than budgeted natural gas transport and storage contributions, better than expected contributions from our Terminals segment, and lower pension costs,” 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, 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 in the second quarter of 2024 relative to the second quarter of 2023 benefited from higher contributions from our Texas Intrastate system as well as additional contributions from our STX Midstream acquisition, partially offset by lower contributions from our gathering systems due to asset divestitures and lower commodity prices,” said KMI President
“Natural gas transport volumes were up slightly compared to the second quarter of 2023. Natural gas gathering volumes were up 10% from the second quarter of 2023, primarily from our Haynesville and
“Contributions from the Products Pipelines business segment were up compared to the second quarter of 2023 due to higher rates on existing assets and contributions from new capital projects. Total refined products volumes were up slightly and crude and condensate volumes were flat compared to the second quarter of 2023,” Martin said.
“Terminals business segment earnings were up compared to the second quarter of 2023. Our liquids terminals benefited from expansion projects placed in-service as well as higher rates and utilization at our
“CO2 business segment earnings, excluding the gain from a divestiture, were down compared to the second quarter of 2023, due to lower crude volumes, CO2 sales, and NGL volumes, down 13%, 8%, and 17% respectively, on a net-to-KMI basis compared to the second quarter of 2023. Crude volumes were down partially due to timing of the recovery of production at SACROC after an outage in 2023. Year-to-date crude volumes were down 8%. Price movements across the segment’s three primary commodities netted out positively for the quarter versus the second quarter of 2023. The segment benefited from increased contributions from the Wink Pipeline, primarily due to a refinery outage in 2023. KMI’s ETV contributions were higher due to RNG facilities being placed in service after the second quarter of 2023,” said Martin.
Other News
Corporate
- KMI is moving from an annual to a biennial in-person investor day presentation. Therefore, there will be no in-person investor day presentation in 2025 but the company expects to hold one in the first quarter of 2026. KMI will continue to release its detailed annual budget early in the first quarter of each year, consistent with prior practice.
Natural Gas Pipelines
-
SNG held a successful binding open season on the proposed South System Expansion 4 (SSE4) Project designed to increase SNG’s South Line capacity by approximately 1.2 Bcf/d. Upon completion, the approximately
$3 billion project will help meet growing power generation and local distribution company demand in the Southeast markets. SSE4 will be almost entirely comprised of brownfield looping and horsepower compression additions on the SNG and Elba Express pipeline systems. Subject to all required approvals, KMI expects the project to be in service beginning in late 2028.
-
In early July, the company executed definitive agreements necessary to proceed with its approximately
$263 million Altamont Green River Pipeline project. This project will provide additional natural gas egress to relieve existing production constraints in theUinta Basin . The Green River Pipeline will consist of approximately 43 miles of 20-inch pipeline and associated compression, providing approximately 150 million cubic feet per day (MMcf/d) of capacity from the basin to the Western Chipeta processing plant. Interim facilities will be constructed for immediate natural gas takeaway until the new pipeline is in service, projected for mid-2025.
-
Construction activities are well underway for the Kinder Morgan Tejas Pipeline’s (Tejas) approximately
$94 million South Texas to Houston Market expansion project. The project will add compression on Tejas’ mainline to increase natural gas deliveries by approximately 350 MMcf/d toHouston markets. The target in-service date is the first quarter of 2025.
-
Construction is ongoing on an approximately
$168 million expansion of the Kinder Morgan Texas Pipeline (KMTP) system to provide transportation and treating services to lean gasEagle Ford producers inWebb County . The expansion project, supported by a long-term contract, is designed to deliver up to 400 MMcf/d ofEagle Ford natural gas supply into the company’s Texas Intrastate network. The project is currently on track to be placed in service inNovember 2024 .
-
The first phase of the
$670 million Evangeline Pass project was placed in service onJuly 1, 2024 . Construction continues on the second phase of the project, which has an expected in-service date ofJuly 1, 2025 . The two-phase project involves modifications and enhancements to portions of theTennessee Gas Pipeline (TGP) andSouthern Natural Gas (SNG) systems inMississippi andLouisiana , which will result in the delivery of approximately 2 Bcf/d of natural gas to Venture Global’s Plaquemines LNG facility.
Terminals
-
Construction activities continue on KMI’s latest expansion of its industry-leading RD and SAF feedstock storage and logistics offering at its lower
Mississippi River hub. The scope of work at itsGeismar River Terminal inGeismar, 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.
Products
-
With definitive agreements signed, the company plans to convert its Double H Pipeline system from crude oil to natural gas liquids (NGL) service, providing
Williston Basin producers and midstream companies with pipeline capacity to key market hubs. The approximately$150 million project is anticipated to be in service in the first quarter of 2026. The pipe will remain in crude service well into 2025 and shippers will be notified in advance of it going out of crude service. Future phases could provide incremental pipeline capacity, including out of thePowder River Basin .
-
With the completion of KMI’s Southern California RD hub and phase 2 of its Northern California RD hub, the company is scoping a phase 3 expansion at its Northern California RD hub. This expansion will involve commencing RD service to
Chico andSacramento and expanding RD service to multiple locations includingFresno ,San Jose ,Colton andMission Valley , while adding between 10,000 and 20,000 barrels per day (Bbl/d) of incremental RD capacity across those locations. In-service dates will depend on permit requirements and customer support.
-
On
June 10, 2024 ,SFPP, L.P. , a subsidiary of KMI, launched an open season for up to 10,000 Bbl/d of additional capacity on its East Line system for transportation service fromEl Paso, Texas toTucson, Arizona . Interested customers will be able to make take-or-pay volume commitments for Mexican grade diesel as well as domestic grade products (gasoline, diesel and jet fuel). The open season is scheduled to run throughAugust 9, 2024 .
CO2
-
During the quarter, Kinder Morgan CO2 optimized its asset portfolio through two transactions in the
Permian Basin for a net outlay of approximately$40 million . The segment divested its interests in the Katz Unit, Goldsmith Landreth San Andres Unit, TallCotton Field and Reinecke Unit, along with certain shallow interests in the Diamond M Field and acquired AVAD Energy Partners’ interest in the North McElroy Unit (NMU) and a leasehold interest in an undeveloped leasehold directly adjacent to SACROC. NMU is an existing waterflood that currently produces approximately 1,250 Bbl/d of crude oil. Kinder Morgan’s analysis suggests that NMU could be an excellent candidate for CO2 flooding. The impact of these two transactions is to replace fields with high production decline rates and limited CO2 flood opportunities with fields that have attractive potential CO2 flood projects.
-
Construction is nearly complete 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.
Please join
Non-GAAP Financial Measures
As described in further detail below, our management evaluates our performance primarily using Net income attributable to
Our non-GAAP financial measures described below should not be considered alternatives to GAAP net income attributable to
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
The following table summarizes our Certain Items for the three and six months ended
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(In millions) |
||||||||||||||
Certain Items |
|
|
|
|
|
|
|
||||||||
Fair value amortization |
$ |
— |
|
|
$ |
4 |
|
|
$ |
— |
|
|
$ |
— |
|
Change in fair value of derivative contracts (1) |
|
2 |
|
|
|
(62 |
) |
|
|
52 |
|
|
|
(130 |
) |
(Gain) loss on divestitures and impairment, net |
|
(41 |
) |
|
|
— |
|
|
|
(70 |
) |
|
|
67 |
|
Income tax Certain Items (2) |
|
10 |
|
|
|
12 |
|
|
|
1 |
|
|
|
13 |
|
Other |
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Total Certain Items (3)(4) |
$ |
(27 |
) |
|
$ |
(46 |
) |
|
$ |
(15 |
) |
|
$ |
(50 |
) |
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) |
Amounts for the periods ending |
(4) |
Amounts for the periods ending |
Adjusted Net Income Attributable to
Adjusted Net Income Attributable to Common Stock and Adjusted EPS is calculated by adjusting Net income attributable to
DCF is calculated by adjusting net income attributable to
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
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
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 |
|||||||||||||||||||||
|
|||||||||||||||||||||
Preliminary Consolidated Statements of Income |
|||||||||||||||||||||
(In millions, except per share amounts, unaudited) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended
|
|
% change |
|
Six Months Ended
|
|
% change |
||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
||||
Revenues |
$ |
3,572 |
|
|
$ |
3,501 |
|
|
|
|
$ |
7,414 |
|
|
$ |
7,389 |
|
|
|
||
Operating costs, expenses and other |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs of sales (exclusive of items shown separately below) |
|
967 |
|
|
|
971 |
|
|
|
|
|
2,074 |
|
|
|
2,186 |
|
|
|
||
Operations and maintenance |
|
741 |
|
|
|
685 |
|
|
|
|
|
1,421 |
|
|
|
1,324 |
|
|
|
||
Depreciation, depletion and amortization |
|
584 |
|
|
|
557 |
|
|
|
|
|
1,171 |
|
|
|
1,122 |
|
|
|
||
General and administrative |
|
179 |
|
|
|
169 |
|
|
|
|
|
354 |
|
|
|
335 |
|
|
|
||
Taxes, other than income taxes |
|
109 |
|
|
|
103 |
|
|
|
|
|
220 |
|
|
|
213 |
|
|
|
||
Gain on divestitures, net |
|
(45 |
) |
|
|
(13 |
) |
|
|
|
|
(77 |
) |
|
|
(13 |
) |
|
|
||
Other income, net |
|
(1 |
) |
|
|
(1 |
) |
|
|
|
|
(10 |
) |
|
|
(2 |
) |
|
|
||
Total operating costs, expenses and other |
|
2,534 |
|
|
|
2,471 |
|
|
|
|
|
5,153 |
|
|
|
5,165 |
|
|
|
||
Operating income |
|
1,038 |
|
|
|
1,030 |
|
|
|
|
|
2,261 |
|
|
|
2,224 |
|
|
|
||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from equity investments |
|
208 |
|
|
|
208 |
|
|
|
|
|
451 |
|
|
|
373 |
|
|
|
||
Amortization of excess cost of equity investments |
|
(13 |
) |
|
|
(19 |
) |
|
|
|
|
(25 |
) |
|
|
(36 |
) |
|
|
||
Interest, net |
|
(464 |
) |
|
|
(443 |
) |
|
|
|
|
(936 |
) |
|
|
(888 |
) |
|
|
||
Other, net |
|
1 |
|
|
|
2 |
|
|
|
|
|
1 |
|
|
|
4 |
|
|
|
||
Income before income taxes |
|
770 |
|
|
|
778 |
|
|
|
|
|
1,752 |
|
|
|
1,677 |
|
|
|
||
Income tax expense |
|
(168 |
) |
|
|
(168 |
) |
|
|
|
|
(377 |
) |
|
|
(364 |
) |
|
|
||
Net income |
|
602 |
|
|
|
610 |
|
|
|
|
|
1,375 |
|
|
|
1,313 |
|
|
|
||
Net income attributable to NCI |
|
(27 |
) |
|
|
(24 |
) |
|
|
|
|
(54 |
) |
|
|
(48 |
) |
|
|
||
Net income attributable to |
$ |
575 |
|
|
$ |
586 |
|
|
|
|
$ |
1,321 |
|
|
$ |
1,265 |
|
|
|
||
Class |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted earnings per share |
$ |
0.26 |
|
|
$ |
0.26 |
|
|
— |
% |
|
$ |
0.59 |
|
|
$ |
0.56 |
|
|
5 |
% |
Basic and diluted weighted average shares outstanding |
|
2,219 |
|
|
|
2,237 |
|
|
(1 |
)% |
|
|
2,219 |
|
|
|
2,242 |
|
|
(1 |
)% |
Declared dividends per share |
$ |
0.2875 |
|
|
$ |
0.2825 |
|
|
2 |
% |
|
$ |
0.575 |
|
|
$ |
0.565 |
|
|
2 |
% |
Adjusted Net Income Attributable to |
$ |
548 |
|
|
$ |
540 |
|
|
1 |
% |
|
$ |
1,306 |
|
|
$ |
1,215 |
|
|
7 |
% |
Adjusted EPS (1) |
$ |
0.25 |
|
|
$ |
0.24 |
|
|
4 |
% |
|
$ |
0.59 |
|
|
$ |
0.54 |
|
|
9 |
% |
Notes |
|
(1) |
Adjusted Net Income Attributable to |
Table 2 |
|||||||||||||||||||||
|
|||||||||||||||||||||
Preliminary Net Income Attributable to |
|||||||||||||||||||||
(In millions, except per share amounts, unaudited) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended
|
|
% change |
|
Six Months Ended
|
|
% change |
||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
||||
Net income attributable to |
$ |
575 |
|
|
$ |
586 |
|
|
(2 |
)% |
|
$ |
1,321 |
|
|
$ |
1,265 |
|
|
4 |
% |
Certain Items (1) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value amortization |
|
— |
|
|
|
4 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
||
Change in fair value of derivative contracts |
|
2 |
|
|
|
(62 |
) |
|
|
|
|
52 |
|
|
|
(130 |
) |
|
|
||
(Gain) loss on divestitures and impairment, net |
|
(41 |
) |
|
|
— |
|
|
|
|
|
(70 |
) |
|
|
67 |
|
|
|
||
Income tax Certain Items |
|
10 |
|
|
|
12 |
|
|
|
|
|
1 |
|
|
|
13 |
|
|
|
||
Other |
|
2 |
|
|
|
— |
|
|
|
|
|
2 |
|
|
|
— |
|
|
|
||
Total Certain Items |
|
(27 |
) |
|
|
(46 |
) |
|
41 |
% |
|
|
(15 |
) |
|
|
(50 |
) |
|
70 |
% |
Adjusted Net Income Attributable to |
$ |
548 |
|
|
$ |
540 |
|
|
1 |
% |
|
$ |
1,306 |
|
|
$ |
1,215 |
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to |
$ |
575 |
|
|
$ |
586 |
|
|
(2 |
)% |
|
$ |
1,321 |
|
|
$ |
1,265 |
|
|
4 |
% |
Total Certain Items (2) |
|
(27 |
) |
|
|
(46 |
) |
|
|
|
|
(15 |
) |
|
|
(50 |
) |
|
|
||
Net income allocated to participating securities (3) |
|
(3 |
) |
|
|
(4 |
) |
|
|
|
|
(7 |
) |
|
|
(7 |
) |
|
|
||
Other (4) |
|
— |
|
|
|
1 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
||
Adjusted Net Income Attributable to Common Stock |
$ |
545 |
|
|
$ |
537 |
|
|
1 |
% |
|
$ |
1,299 |
|
|
$ |
1,208 |
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to |
$ |
575 |
|
|
$ |
586 |
|
|
(2 |
)% |
|
$ |
1,321 |
|
|
$ |
1,265 |
|
|
4 |
% |
Total Certain Items (2) |
|
(27 |
) |
|
|
(46 |
) |
|
41 |
% |
|
|
(15 |
) |
|
|
(50 |
) |
|
70 |
% |
DD&A |
|
584 |
|
|
|
557 |
|
|
|
|
|
1,171 |
|
|
|
1,122 |
|
|
|
||
Amortization of excess cost of equity investments |
|
13 |
|
|
|
19 |
|
|
|
|
|
25 |
|
|
|
36 |
|
|
|
||
Income tax expense (5) |
|
158 |
|
|
|
156 |
|
|
|
|
|
376 |
|
|
|
351 |
|
|
|
||
Cash taxes |
|
(13 |
) |
|
|
(8 |
) |
|
|
|
|
(11 |
) |
|
|
(9 |
) |
|
|
||
Sustaining capital expenditures |
|
(241 |
) |
|
|
(195 |
) |
|
|
|
|
(410 |
) |
|
|
(351 |
) |
|
|
||
Amounts from joint ventures |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unconsolidated JV DD&A |
|
86 |
|
|
|
80 |
|
|
|
|
|
172 |
|
|
|
161 |
|
|
|
||
Remove consolidated JV partners' DD&A |
|
(15 |
) |
|
|
(15 |
) |
|
|
|
|
(31 |
) |
|
|
(31 |
) |
|
|
||
Unconsolidated JV income tax expense (6)(7) |
|
19 |
|
|
|
20 |
|
|
|
|
|
41 |
|
|
|
46 |
|
|
|
||
Unconsolidated JV cash taxes (6) |
|
4 |
|
|
|
(52 |
) |
|
|
|
|
(53 |
) |
|
|
(52 |
) |
|
|
||
Unconsolidated JV sustaining capital expenditures |
|
(55 |
) |
|
|
(46 |
) |
|
|
|
|
(89 |
) |
|
|
(75 |
) |
|
|
||
Remove consolidated JV partners' sustaining capital expenditures |
|
2 |
|
|
|
2 |
|
|
|
|
|
5 |
|
|
|
4 |
|
|
|
||
Other items (8) |
|
10 |
|
|
|
18 |
|
|
|
|
|
20 |
|
|
|
33 |
|
|
|
||
DCF |
$ |
1,100 |
|
|
$ |
1,076 |
|
|
2 |
% |
|
$ |
2,522 |
|
|
$ |
2,450 |
|
|
3 |
% |
Weighted average shares outstanding for dividends (9) |
|
2,232 |
|
|
|
2,250 |
|
|
|
|
|
2,232 |
|
|
|
2,255 |
|
|
|
||
DCF per share |
$ |
0.49 |
|
|
$ |
0.48 |
|
|
2 |
% |
|
$ |
1.13 |
|
|
$ |
1.09 |
|
|
4 |
% |
Declared dividends per share |
$ |
0.2875 |
|
|
$ |
0.2825 |
|
|
|
|
$ |
0.575 |
|
|
$ |
0.565 |
|
|
|
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 |
(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) |
Adjusted net income in excess of distributions for participating securities. |
(5) |
To avoid duplication, adjustments for income tax expense for the periods ended |
(6) |
Associated with our Citrus, NGPL and Products (SE) Pipe Line equity investments. |
(7) |
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.” |
(8) |
Includes non-cash pension expense, non-cash compensation associated with our restricted stock program and pension contributions. |
(9) |
Includes restricted stock awards that participate in dividends. |
Table 3 |
|||||||||||||||||||||
|
|||||||||||||||||||||
Preliminary Net Income Attributable to |
|||||||||||||||||||||
(In millions, unaudited) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended
|
|
% change |
|
Six Months Ended
|
|
% change |
||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
||||
Net income attributable to |
$ |
575 |
|
|
$ |
586 |
|
|
(2 |
)% |
|
$ |
1,321 |
|
|
$ |
1,265 |
|
|
4 |
% |
Certain Items (1) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value amortization |
|
— |
|
|
|
4 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
||
Change in fair value of derivative contracts |
|
2 |
|
|
|
(62 |
) |
|
|
|
|
52 |
|
|
|
(130 |
) |
|
|
||
(Gain) loss on divestitures and impairment, net |
|
(41 |
) |
|
|
— |
|
|
|
|
|
(70 |
) |
|
|
67 |
|
|
|
||
Income tax Certain Items |
|
10 |
|
|
|
12 |
|
|
|
|
|
1 |
|
|
|
13 |
|
|
|
||
Other |
|
2 |
|
|
|
— |
|
|
|
|
|
2 |
|
|
|
— |
|
|
|
||
Total Certain Items |
|
(27 |
) |
|
|
(46 |
) |
|
|
|
|
(15 |
) |
|
|
(50 |
) |
|
|
||
DD&A |
|
584 |
|
|
|
557 |
|
|
|
|
|
1,171 |
|
|
|
1,122 |
|
|
|
||
Amortization of excess cost of equity investments |
|
13 |
|
|
|
19 |
|
|
|
|
|
25 |
|
|
|
36 |
|
|
|
||
Income tax expense (2) |
|
158 |
|
|
|
156 |
|
|
|
|
|
376 |
|
|
|
351 |
|
|
|
||
Interest, net (3) |
|
465 |
|
|
|
448 |
|
|
|
|
|
935 |
|
|
|
901 |
|
|
|
||
Amounts from joint ventures |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unconsolidated JV DD&A |
|
86 |
|
|
|
80 |
|
|
|
|
|
172 |
|
|
|
161 |
|
|
|
||
Remove consolidated JV partners' DD&A |
|
(15 |
) |
|
|
(15 |
) |
|
|
|
|
(31 |
) |
|
|
(31 |
) |
|
|
||
Unconsolidated JV income tax expense (4) |
|
19 |
|
|
|
20 |
|
|
|
|
|
41 |
|
|
|
46 |
|
|
|
||
Adjusted EBITDA |
$ |
1,858 |
|
|
$ |
1,805 |
|
|
3 |
% |
|
$ |
3,995 |
|
|
$ |
3,801 |
|
|
5 |
% |
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 |
(3) |
To avoid duplication, adjustments for interest, net for the periods ended |
(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 |
|||||||||||||||
|
|||||||||||||||
Preliminary Reconciliation of Segment EBDA to Adjusted Segment EBDA |
|||||||||||||||
(In millions, unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Segment EBDA (1) |
|
|
|
|
|
|
|
||||||||
Natural Gas Pipelines Segment EBDA |
$ |
1,227 |
|
|
$ |
1,255 |
|
|
$ |
2,741 |
|
|
$ |
2,750 |
|
Certain Items (2) |
|
|
|
|
|
|
|
||||||||
Change in fair value of derivative contracts |
|
4 |
|
|
|
(54 |
) |
|
|
43 |
|
|
|
(119 |
) |
Gain on divestiture |
|
— |
|
|
|
— |
|
|
|
(29 |
) |
|
|
— |
|
Natural Gas Pipelines Adjusted Segment EBDA |
$ |
1,231 |
|
|
$ |
1,201 |
|
|
$ |
2,755 |
|
|
$ |
2,631 |
|
|
|
|
|
|
|
|
|
||||||||
Products Pipelines Segment EBDA |
$ |
301 |
|
|
$ |
285 |
|
|
$ |
593 |
|
|
$ |
469 |
|
Certain Items (2) |
|
|
|
|
|
|
|
||||||||
Change in fair value of derivative contracts |
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
Loss on impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
67 |
|
Products Pipelines Adjusted Segment EBDA |
$ |
301 |
|
|
$ |
286 |
|
|
$ |
594 |
|
|
$ |
537 |
|
|
|
|
|
|
|
|
|
||||||||
Terminals Segment EBDA |
$ |
281 |
|
|
$ |
261 |
|
|
$ |
550 |
|
|
$ |
515 |
|
|
|
|
|
|
|
|
|
||||||||
CO2 Segment EBDA |
$ |
206 |
|
|
$ |
175 |
|
|
$ |
364 |
|
|
$ |
347 |
|
Certain Items (2) |
|
|
|
|
|
|
|
||||||||
Change in fair value of derivative contracts |
|
(1 |
) |
|
|
— |
|
|
|
7 |
|
|
|
1 |
|
Gain on divestitures |
|
(41 |
) |
|
|
— |
|
|
|
(41 |
) |
|
|
— |
|
CO2 Adjusted Segment EBDA |
$ |
164 |
|
|
$ |
175 |
|
|
$ |
330 |
|
|
$ |
348 |
|
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
|
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Natural Gas Pipelines |
|
|
|
|
|
|
|
||||||||
Transport volumes (BBtu/d) |
|
42,122 |
|
|
|
42,014 |
|
|
|
42,864 |
|
|
|
42,666 |
|
Sales volumes (BBtu/d) |
|
2,457 |
|
|
|
2,220 |
|
|
|
2,511 |
|
|
|
2,169 |
|
Gathering volumes (BBtu/d) |
|
4,013 |
|
|
|
3,661 |
|
|
|
4,013 |
|
|
|
3,530 |
|
NGLs (MBbl/d) |
|
42 |
|
|
|
34 |
|
|
|
39 |
|
|
|
33 |
|
Products Pipelines (MBbl/d) |
|
|
|
|
|
|
|
||||||||
Gasoline (2) |
|
1,008 |
|
|
|
1,004 |
|
|
|
966 |
|
|
|
976 |
|
Diesel fuel |
|
360 |
|
|
|
356 |
|
|
|
347 |
|
|
|
342 |
|
Jet fuel |
|
308 |
|
|
|
290 |
|
|
|
291 |
|
|
|
281 |
|
Total refined product volumes |
|
1,676 |
|
|
|
1,650 |
|
|
|
1,604 |
|
|
|
1,599 |
|
Crude and condensate |
|
493 |
|
|
|
495 |
|
|
|
475 |
|
|
|
477 |
|
Total delivery volumes (MBbl/d) |
|
2,169 |
|
|
|
2,145 |
|
|
|
2,079 |
|
|
|
2,076 |
|
Terminals |
|
|
|
|
|
|
|
||||||||
Liquids leasable capacity (MMBbl) |
|
78.6 |
|
|
|
78.6 |
|
|
|
78.6 |
|
|
|
78.6 |
|
Liquids leased capacity % |
|
94.3 |
% |
|
|
93.6 |
% |
|
|
94.1 |
% |
|
|
93.2 |
% |
Bulk transload tonnage (MMtons) |
|
14.1 |
|
|
|
13.7 |
|
|
|
27.7 |
|
|
|
27.1 |
|
CO2 |
|
|
|
|
|
|
|
||||||||
SACROC oil production |
|
18.91 |
|
|
|
22.27 |
|
|
|
19.01 |
|
|
|
20.77 |
|
|
|
6.09 |
|
|
|
6.55 |
|
|
|
6.17 |
|
|
|
6.65 |
|
Other |
|
1.05 |
|
|
|
1.09 |
|
|
|
1.06 |
|
|
|
1.08 |
|
Total oil production - net (MBbl/d) (3) |
|
26.05 |
|
|
|
29.91 |
|
|
|
26.24 |
|
|
|
28.50 |
|
NGL sales volumes - net (MBbl/d) (3) |
|
7.97 |
|
|
|
9.65 |
|
|
|
8.42 |
|
|
|
8.90 |
|
CO2 sales volumes - net (Bcf/d) |
|
0.316 |
|
|
|
0.342 |
|
|
|
0.326 |
|
|
|
0.352 |
|
RNG sales volumes (BBtu/d) |
|
9 |
|
|
|
5 |
|
|
|
8 |
|
|
|
5 |
|
Realized weighted average oil price ($ per Bbl) |
$ |
69.47 |
|
|
$ |
67.73 |
|
|
$ |
69.08 |
|
|
$ |
67.45 |
|
Realized weighted average NGL price ($ per Bbl) |
$ |
27.29 |
|
|
$ |
31.22 |
|
|
$ |
27.78 |
|
|
$ |
32.54 |
|
CO2 Segment Hedges |
Remaining 2024 |
|
|
2025 |
|
|
2026 |
|
|
2027 |
|
|
2028 |
|
Crude Oil (4) |
|
|
|
|
|
|
|
|
|
|||||
Price ($ per Bbl) |
$ |
66.21 |
|
$ |
65.43 |
|
$ |
65.72 |
|
$ |
65.66 |
|
$ |
64.53 |
Volume (MBbl/d) |
|
22.90 |
|
|
15.40 |
|
|
9.90 |
|
|
7.10 |
|
|
0.60 |
NGLs |
|
|
|
|
|
|
|
|
|
|||||
Price ($ per Bbl) |
$ |
48.34 |
|
$ |
50.17 |
|
|
|
|
|
|
|||
Volume (MBbl/d) |
|
4.24 |
|
|
1.09 |
|
|
|
|
|
|
Notes |
|
(1) |
Volumes for acquired assets are included for all 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 |
|||||||
|
|||||||
Preliminary Consolidated Balance Sheets |
|||||||
(In millions, unaudited) |
|||||||
|
|
|
|
||||
|
|
|
|
||||
|
|
2024 |
|
|
|
2023 |
|
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
98 |
|
|
$ |
83 |
|
Other current assets |
|
2,092 |
|
|
|
2,459 |
|
Property, plant and equipment, net |
|
37,533 |
|
|
|
37,297 |
|
Investments |
|
7,851 |
|
|
|
7,874 |
|
|
|
20,084 |
|
|
|
20,121 |
|
Deferred charges and other assets |
|
3,044 |
|
|
|
3,186 |
|
Total assets |
$ |
70,702 |
|
|
$ |
71,020 |
|
Liabilities and Stockholders' Equity |
|
|
|
||||
Short-term debt |
$ |
3,062 |
|
|
$ |
4,049 |
|
Other current liabilities |
|
2,896 |
|
|
|
3,172 |
|
Long-term debt |
|
28,560 |
|
|
|
27,880 |
|
Debt fair value adjustments |
|
89 |
|
|
|
187 |
|
Other |
|
4,401 |
|
|
|
4,003 |
|
Total liabilities |
|
39,008 |
|
|
|
39,291 |
|
Other stockholders' equity |
|
30,600 |
|
|
|
30,523 |
|
Accumulated other comprehensive loss |
|
(262 |
) |
|
|
(217 |
) |
Total KMI stockholders' equity |
|
30,338 |
|
|
|
30,306 |
|
Noncontrolling interests |
|
1,356 |
|
|
|
1,423 |
|
Total stockholders' equity |
|
31,694 |
|
|
|
31,729 |
|
Total liabilities and stockholders' equity |
$ |
70,702 |
|
|
$ |
71,020 |
|
|
|
|
|
||||
Net Debt (1) |
$ |
31,531 |
|
|
$ |
31,837 |
|
|
|
|
|
||||
Table 6 (continued)
Preliminary Consolidated Balance Sheets (In millions, unaudited) |
|||||||
|
|
|
|
||||
|
Adjusted EBITDA Twelve Months Ended (2) |
||||||
Reconciliation of Net Income Attributable to |
|
|
|
||||
|
2024 |
|
|
|
2023 |
|
|
Net income attributable to |
$ |
2,447 |
|
|
$ |
2,391 |
|
Total Certain Items (3) |
|
54 |
|
|
|
19 |
|
DD&A |
|
2,299 |
|
|
|
2,250 |
|
Amortization of excess cost of equity investments |
|
55 |
|
|
|
66 |
|
Income tax expense (4) |
|
708 |
|
|
|
682 |
|
Interest, net (4) |
|
1,838 |
|
|
|
1,804 |
|
Amounts from joint ventures |
|
|
|
||||
Unconsolidated JV DD&A |
|
334 |
|
|
|
323 |
|
Less: Consolidated JV partners' DD&A |
|
(63 |
) |
|
|
(63 |
) |
Unconsolidated JV income tax expense |
|
83 |
|
|
|
89 |
|
Adjusted EBITDA |
$ |
7,755 |
|
|
$ |
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 |
Table 7 |
|||||||||||||||
|
|||||||||||||||
Preliminary Supplemental Information |
|||||||||||||||
(In millions, unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
KMI FCF |
|
|
|
|
|
|
|
||||||||
Net income attributable to |
$ |
575 |
|
|
$ |
586 |
|
|
$ |
1,321 |
|
|
$ |
1,265 |
|
Net income attributable to noncontrolling interests |
|
27 |
|
|
|
24 |
|
|
|
54 |
|
|
|
48 |
|
DD&A |
|
584 |
|
|
|
557 |
|
|
|
1,171 |
|
|
|
1,122 |
|
Amortization of excess cost of equity investments |
|
13 |
|
|
|
19 |
|
|
|
25 |
|
|
|
36 |
|
Deferred income taxes |
|
159 |
|
|
|
164 |
|
|
|
357 |
|
|
|
354 |
|
Earnings from equity investments |
|
(208 |
) |
|
|
(208 |
) |
|
|
(451 |
) |
|
|
(373 |
) |
Distribution of equity investment earnings (1) |
|
233 |
|
|
|
179 |
|
|
|
416 |
|
|
|
367 |
|
Working capital and other items |
|
304 |
|
|
|
229 |
|
|
|
(17 |
) |
|
|
64 |
|
Cash flow from operations |
|
1,687 |
|
|
|
1,550 |
|
|
|
2,876 |
|
|
|
2,883 |
|
Capital expenditures (GAAP) |
|
(581 |
) |
|
|
(535 |
) |
|
|
(1,200 |
) |
|
|
(1,042 |
) |
FCF |
|
1,106 |
|
|
|
1,015 |
|
|
|
1,676 |
|
|
|
1,841 |
|
Dividends paid |
|
(641 |
) |
|
|
(637 |
) |
|
|
(1,272 |
) |
|
|
(1,264 |
) |
FCF after dividends |
$ |
465 |
|
|
$ |
378 |
|
|
$ |
404 |
|
|
$ |
577 |
|
Notes |
|
(1) |
Periods ended |
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