01—Abstract
Summary
Summary of the 10-K filed February 7, 2022. Cited figures are marked; the original filing is the authoritative source.
Kinder Morgan, Inc. (KMI) reported a strong financial performance in 2021, demonstrating resilience and strategic growth.
The company's net income attributable to Kinder Morgan, Inc. significantly increased to $1.78 billiona, up from $119 million in 2020, largely driven by a substantial positive impact from the February 2021 winter storm on its Natural Gas Pipelines and CO2 segments, alongside a notable reduction in impairments. KMI also executed its business strategy by completing key acquisitions, including Stagecoach Gas Services LLC and Kinetrex, bolstering its natural gas and renewable energy infrastructure capabilities, respectively. Financially, KMI managed its debt effectively by issuing new senior notes and repaying maturing debt, while also securing a new $3.5 billion revolving credit facility.
The company maintained its commitment to shareholder returns, increasing its declared dividend for 2022. KMI's diversified business segments, particularly Natural Gas Pipelines and Products Pipelines, showed growth in Adjusted Segment EBDA, indicating solid operational performance and fee-based revenue streams that provide stability.
02—Key points
Key Highlights
- Significant net income increase: Net income attributable to Kinder Morgan, Inc. rose to $1.78 billion in 2021, a substantial improvement from $119 million in 2020.
- Strong Segment EBDA Growth: Total segment EBDA increased by 26% to $6.55 billion in 2021, driven by robust performance in Natural Gas Pipelines and CO2 segments, partly due to the positive impact of the February 2021 winter storm.
- Strategic Acquisitions: KMI completed significant acquisitions, including Stagecoach Gas Services LLC ($1.26 billion) and Kinetrex ($318 million), enhancing its natural gas and renewable natural gas (RNG) businesses.
- Debt Management and Financing: The company issued $1.55 billion in new senior notes, repaid $2.4 billion in maturing notes, and secured a new $3.5 billion revolving credit facility, demonstrating sound financial management.
- Commitment to Shareholder Returns: KMI declared a 3% increase in its quarterly dividend for 2022, expecting to pay $1.11 per share, and maintained flexibility for opportunistic share repurchases.
- Reduced Impairments: Impairments decreased significantly in 2021 compared to 2020, with a large asset impairment loss related to South Texas gathering and processing assets in 2021 being offset by a reduction in goodwill and asset impairments compared to the prior year.
- Diversified Infrastructure Portfolio: KMI operates across Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments, with a vast network of pipelines and terminals, providing a stable and diversified revenue base.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Kinder Morgan, Inc. kept $0.11.
- Revenue$16.61B100.0%
- Cost of revenue−$6.49B39.1%
- Gross profit$10.12B60.9%
- Operating costs−$7.20B43.4%
- Operating income$2.92B17.6%
- Interest, other & tax−$1.13B6.8%
- Net income$1.78B10.7%
Where FY2021 revenue went
$16.61B- Operating costs: $7.20B, 43% of revenue
- Cost of revenue: $6.49B, 39% of revenue
- Net income: $1.78B, 11% of revenue
- Interest, other & tax: $1.13B, 6.8% of revenue
Kept 11% as net incomeNet income $1.78B · 11%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 7, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $16.61B$11.70B | +42.0% |
| Cost of Revenue | $6.49B$2.54B | +155.1% |
| Gross Profit | $10.12B$9.15B | +10.5% |
| Operating Expenses | $13.69B$10.14B | +35.0% |
| Operating Income | $2.92B$1.56B | +86.9% |
| Net Income | $1.78B$119.00M | +1399.2% |
| EPS (Basic) | $0.78$0.05 | +1460.0% |
| EPS (Diluted) | $0.78$0.05 | +1460.0% |
| Shares Outstanding (Basic) | 2.27B2.26B | +0.1% |
| Shares Outstanding (Diluted) | 2.27B2.26B | +0.1% |
05—Questions
Frequently Asked Questions
What were the key drivers of Kinder Morgan's financial performance in 2021?
Kinder Morgan's financial performance in 2021 was primarily driven by a significant increase in net income attributable to Kinder Morgan, Inc., reaching $1.78 billion, up from $119 million in 2020. This substantial improvement was largely due to a positive impact from the February 2021 winter storm on its Natural Gas Pipelines and CO2 segments. Additionally, a reduction in asset impairments compared to the previous year contributed positively to the results.
How did Kinder Morgan strengthen its business through acquisitions and strategic moves in 2021?
In 2021, Kinder Morgan strategically expanded its infrastructure portfolio by completing two key acquisitions: Stagecoach Gas Services LLC for approximately $1.26 billion, which enhanced its natural gas pipeline and storage network in the Northeast, and Kinetrex for $318 million, a move that bolsters its position in the renewable natural gas (RNG) market. These acquisitions align with KMI's strategy to invest in energy transition ventures and strengthen its core businesses.
What is Kinder Morgan's approach to managing its debt and returning capital to shareholders?
Kinder Morgan maintained a disciplined approach to financial management in 2021 by issuing $1.55 billion in new senior notes and repaying $2.4 billion of maturing debt. The company also secured a new $3.5 billion revolving credit facility, enhancing its financial flexibility. Demonstrating a commitment to shareholder value, KMI announced a 3% increase in its quarterly dividend for 2022, projecting payments of $1.11 per share, and continues to have capacity for opportunistic share repurchases under its existing program.
How does Kinder Morgan manage commodity price risk?
Kinder Morgan manages its exposure to commodity price volatility through a hedging strategy employing derivative contracts, including futures, options, fixed price swaps, and basis swaps. These instruments are used to mitigate risks associated with unfavorable changes in the market prices of crude oil, natural gas, and NGLs, aiming to provide greater certainty in operating cash flows.
06—Continue