01—Abstract
Summary
Summary of the 10-K filed February 5, 2021. Cited figures are marked; the original filing is the authoritative source.
Kinder Morgan, Inc. (KMI) reported its 2020 annual results, a year significantly impacted by the COVID-19 pandemic.
The company experienced a substantial decrease in net income attributable to Kinder Morgan, Inc. to $119 milliona from $2,190 million in 2019, largely due to non-cash impairments totaling $1.95 billion related to goodwill and certain assets, primarily within the CO2 and Natural Gas Pipelines segments. Despite these impairments, KMI's business strategy remains focused on stable, fee-based energy transportation and storage assets, aiming to increase asset utilization, maintain cost control, and exercise discipline in capital allocation. The company's infrastructure network, comprising approximately 83,000 miles of pipelines and 144 terminals, is central to North American energy supply chains.
Financially, KMI managed its debt effectively, issuing $2.25 billionb of new senior notes and repaying $2.2 billion of maturing notes during 2020. The company also announced expectations for a 3% increase in its 2021 dividend to $1.08 per share and planned $0.8 billion in expansion projects.
While the pandemic created significant volatility and reduced demand, KMI's diversified business segments and long-term contracts provide a degree of resilience. The report highlights the company's continued commitment to safety and operational efficiency amidst ongoing market challenges.
02—Key points
Key Highlights
- Net income attributable to Kinder Morgan, Inc. significantly decreased to $119 million in 2020 from $2,190 million in 2019 due to substantial non-cash impairments.
- The company recorded $1.95 billion in non-cash impairments of goodwill and assets, primarily impacting the CO2 and Natural Gas Pipelines segments, driven by pandemic-related market conditions.
- KMI successfully managed its debt in 2020, issuing $2.25 billion in senior notes and repaying $2.2 billion of maturing debt.
- The company expects to increase its 2021 dividend by 3% to $1.08 per share, demonstrating confidence in its financial outlook.
- Kinder Morgan operates a vast infrastructure network of approximately 83,000 miles of pipelines and 144 terminals across North America.
- Segment EBDA decreased by 35% to $5.21 billion in 2020, reflecting the broad impact of reduced energy demand and commodity prices due to COVID-19.
- The company plans to invest $0.8 billion in expansion projects and contributions to joint ventures in 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Kinder Morgan, Inc. kept $0.01.
- Revenue$11.70B100.0%
- Cost of revenue−$2.54B21.8%
- Gross profit$9.15B78.2%
- Operating costs−$7.59B64.9%
- Operating income$1.56B13.3%
- Interest, other & tax−$1.44B12.3%
- Net income$119.0M1.0%
Where FY2020 revenue went
$11.70B- Operating costs: $7.59B, 65% of revenue
- Cost of revenue: $2.54B, 22% of revenue
- Interest, other & tax: $1.44B, 12% of revenue
- Net income: $119.0M, 1.0% of revenue
Kept 1.0% as net incomeNet income $119.0M · 1.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 5, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $11.70B$13.21B | −11.4% |
| Cost of Revenue | $2.54B$3.26B | −22.0% |
| Gross Profit | $9.15B$9.95B | −8.0% |
| Operating Expenses | $10.14B$8.34B | +21.6% |
| Operating Income | $1.56B$4.87B | −68.0% |
| Net Income | $119.00M$2.19B | −94.6% |
| EPS (Basic) | $0.05$0.96 | −94.8% |
| EPS (Diluted) | $0.05$0.96 | −94.8% |
| Shares Outstanding (Basic) | 2.26B2.26B | 0.0% |
| Shares Outstanding (Diluted) | 2.26B2.26B | 0.0% |
05—Questions
Frequently Asked Questions
What was the primary driver of Kinder Morgan's reduced net income in 2020?
The primary driver for the significant reduction in net income attributable to Kinder Morgan, Inc. in 2020 was the recognition of substantial non-cash impairments totaling $1.95 billion. These impairments were related to goodwill and certain assets, primarily within the CO2 and Natural Gas Pipelines segments, driven by the adverse market conditions resulting from the COVID-19 pandemic.
How did Kinder Morgan manage its debt in 2020?
Kinder Morgan actively managed its debt in 2020. The company issued approximately $2.25 billion of new senior notes and simultaneously repaid approximately $2.2 billion of maturing senior notes. This proactive approach helped maintain its financial flexibility and manage its debt profile during a challenging economic period.
What is Kinder Morgan's outlook for dividends and capital expenditures in 2021?
Kinder Morgan anticipates a 3% increase in its declared dividends for 2021, bringing the expected amount to $1.08 per share. The company also plans to invest approximately $0.8 billion in expansion projects and contributions to joint ventures during 2021, indicating a strategic focus on growth and returning value to shareholders.
How did the COVID-19 pandemic impact Kinder Morgan's business segments?
The COVID-19 pandemic significantly impacted Kinder Morgan's business segments, leading to reduced energy demand and lower commodity prices. This resulted in decreased earnings before depreciation, depletion, and amortization (EBDA) across all segments, with the CO2 segment experiencing a notable 143% decrease in Segment EBDA. The company reported overall Segment EBDA of $5.21 billion for 2020, a 35% decline from 2019.
06—Continue