KINDER MORGAN, INC. Quarterly Report for Q3 Ended Sep 30, 2017

Summary

Kinder Morgan, Inc. (KMI) reported its third-quarter and year-to-date results for 2017, showing a significant recovery in net income compared to the same period in 2016. For the three months ended September 30, 2017, KMI reported net income attributable to common stockholders of $334 million, a substantial increase from a net loss of $227 million in the prior year. This improvement was driven by higher operating income and a reduced net loss from other expenses, particularly interest expense. For the nine months ended September 30, 2017, net income attributable to common stockholders reached $1,072 million, a considerable leap from $382 million in the prior year. This robust performance reflects improvements across several segments, notably Natural Gas Pipelines and Products Pipelines, and the positive impact of strategic transactions like the KML IPO which generated cash for debt reduction. While overall revenues saw a slight decrease year-over-year for the quarter, segment EBDA showed a healthy increase, indicating improved operational efficiency and profitability before the impact of depreciation, amortization, and corporate overhead. KMI also highlighted progress on its Trans Mountain Expansion Project and announced plans for significant future dividend increases, signaling confidence in its financial health and future cash flow generation. The company continues to manage its debt obligations prudently, with a focus on deleveraging and enhancing shareholder returns.

Key Highlights

• 1Net income attributable to common stockholders for Q3 2017 was $334 million, a significant improvement from a net loss of $227 million in Q3 2016.
• 2For the nine months ended September 30, 2017, net income available to common stockholders was $1,072 million, up from $382 million in the same period of 2016.
• 3Total Segment EBDA increased by 25% year-over-year for the quarter to $1,747 million, driven by strong performance in Natural Gas Pipelines and Terminals.
• 4Kinder Morgan Canada completed an IPO in May 2017, raising approximately $1.245 billion, which was used to pay down debt.
• 5The company announced an expected annual dividend of $0.80 per share for 2018, with plans to increase it to $1.00 in 2019 and $1.25 in 2020.
• 6As of September 30, 2017, KMI had $4.83 billion available under its $5.0 billion revolving credit agreement, indicating strong liquidity.
• 7The company continues to manage its debt, with total long-term debt decreasing to $34.07 billion from $36.21 billion at the end of 2016.

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