10-QPeriod: Q1 FY2014

KINDER MORGAN, INC. Quarterly Report for Q1 Ended Mar 31, 2014

Filed May 1, 2014For Securities:KMIEP-PC

Summary

Kinder Morgan, Inc. (KMI) reported its first-quarter 2014 results, indicating a slight decrease in net income attributable to Kinder Morgan, Inc. to $287 million from $292 million in the prior year's first quarter. Total revenues saw a significant increase, rising to $4.05 billion from $3.06 billion year-over-year, driven by higher natural gas sales and services. The company's operating income also grew to $1.15 billion from $1.02 billion. Key financial activities during the quarter included a substantial increase in cash flow from operating activities, reaching $1.12 billion, up from $767 million in Q1 2013. This was supported by strong performance across several segments, particularly Natural Gas Pipelines and Terminals. However, investing activities showed a significant net cash outflow of $1.82 billion, largely due to the acquisition of American Petroleum Tankers (APT) and State Class Tankers (SCT) by KMP for $960 million. Financing activities provided a net cash inflow of $626 million, primarily from increased debt issuances across KMI and its subsidiaries, which helped fund operations and acquisitions.

Financial Highlights

49 data points
Beta

Revenue

$4.05B

59.4% Gross Margin

Net Income

$287.00M

7.1% Net Margin

EPS (Diluted)

$0.28

Total Assets

$76.05B

Cash & Equivalents

$513.00M

Free Cash Flow

$273.00M

Financial Statements
Beta
Revenue$4.05B
Cost of Revenue$1.64B
Gross Profit$2.40B
Operating Expenses$2.90B
Operating Income$1.15B
Net Income$287.00M
EPS (Diluted)$0.28
Shares Outstanding (Diluted)1.03B

Key Highlights

  • 1Total revenues increased by 32.1% to $4.05 billion in Q1 2014 compared to $3.06 billion in Q1 2013, driven by growth in Natural Gas Sales and Services.
  • 2Net income attributable to Kinder Morgan, Inc. decreased slightly to $287 million ($0.28 per share) from $292 million ($0.28 per share) in the same period last year.
  • 3Operating income increased by 13.1% to $1.15 billion from $1.02 billion.
  • 4Cash flow from operating activities saw a significant increase of 45.8%, totaling $1.12 billion for Q1 2014, up from $767 million in Q1 2013.
  • 5The company completed the acquisition of American Petroleum Tankers (APT) and State Class Tankers (SCT) for $960 million through its subsidiary KMP.
  • 6Debt levels increased, with total long-term debt rising to $34.8 billion from $33.9 billion, reflecting borrowings for acquisitions and operations.
  • 7The company declared a quarterly dividend of $0.42 per share, an increase from $0.38 per share in the prior year's first quarter.

Frequently Asked Questions

Revenues increased significantly to $4.05 billion in the first quarter of 2014 from $3.06 billion in the same period of 2013. This growth was primarily driven by higher revenues from Natural Gas Sales ($1.097 billion vs. $737 million) and Services ($1.829 billion vs. $1.604 billion).

The acquisition of American Petroleum Tankers (APT) and State Class Tankers (SCT) by KMP for $960 million was a major investing activity in the quarter, reflected in the significant outflow of $1.82 billion for investing activities. This acquisition is expected to complement KMP's existing crude oil and refined products transportation business.

Kinder Morgan declared a quarterly dividend of $0.42 per share for the period, an increase from $0.38 per share in the first quarter of 2013. The company expects to declare $1.72 per share for 2014, an 8% increase over 2013, driven by strong performance from KMP and EPB.

Total long-term debt increased to $34.8 billion as of March 31, 2014, from $33.9 billion at the end of 2013. This increase is largely attributable to borrowings used to fund operations and acquisitions, including the APT/SCT acquisition.