10-QPeriod: Q1 FY2018

KINDER MORGAN, INC. Quarterly Report for Q1 Ended Mar 31, 2018

Filed April 24, 2018For Securities:KMIEP-PC

Summary

Kinder Morgan, Inc. (KMI) reported net income of $542 million for the first quarter of 2018, a significant increase from $445 million in the same period of 2017. This improvement was driven by strong performance in the Natural Gas Pipelines segment and a lower effective tax rate due to the Tax Cuts and Jobs Act of 2017. However, the company also announced a suspension of non-essential spending on the Trans Mountain Expansion Project (TMEP) due to ongoing opposition and regulatory uncertainty, a development that poses potential future risks. Despite this uncertainty, KMI returned capital to shareholders through dividends and a substantial share buyback program. Financially, KMI maintained a solid liquidity position with significant availability under its credit facilities and robust operating cash flow. Total revenues remained relatively flat year-over-year, but segment EBDA (Earnings Before Depreciation, Depletion, and Amortization) showed a modest increase, indicating operational efficiency. Investors should monitor the TMEP situation closely, as its resolution could significantly impact future capital expenditures and the company's strategic direction.

Financial Highlights

51 data points
Beta

Revenue

$3.42B

70.2% Gross Margin

Net Income

$524.00M

15.3% Net Margin

EPS (Diluted)

$0.22

Total Assets

$79.01B

Cash & Equivalents

$294.00M

Free Cash Flow

$267.00M

Financial Statements
Beta
Revenue$3.42B
Cost of Revenue$1.02B
Gross Profit$2.40B
Operating Expenses$2.47B
Operating Income$949.00M
Net Income$524.00M
EPS (Basic)$0.22
Shares Outstanding (Basic)2.21B

Key Highlights

  • 1Net income increased by 22% to $542 million in Q1 2018, primarily driven by the lower corporate tax rate and strong performance in the Natural Gas Pipelines segment.
  • 2Total Revenues remained stable at $3.42 billion for Q1 2018, compared to $3.42 billion in Q1 2017.
  • 3Segment EBDA increased by 1% to $1.935 billion in Q1 2018, reflecting operational improvements across segments.
  • 4Kinder Morgan suspended non-essential spending on the Trans Mountain Expansion Project (TMEP) due to opposition from British Columbia and ongoing regulatory challenges.
  • 5The company declared a cash dividend of $0.20 per common share for the quarter, and repurchased approximately $250 million of its common stock under its buyback program.
  • 6Liquidity remains strong with $4.4 billion in available borrowing capacity under its credit facilities and $974 million in cash from operating activities for the quarter.

Frequently Asked Questions

Kinder Morgan reported a net income of $542 million for the first quarter of 2018, an increase of 22% compared to $445 million in the first quarter of 2017. Total revenues were $3.418 billion, largely flat year-over-year. Segment EBDA, a key operational metric, increased slightly to $1.935 billion from $1.910 billion in the prior year period.

Kinder Morgan announced on April 8, 2018, that it was suspending non-essential activities and related spending on the TMEP due to significant opposition from the Province of British Columbia and ongoing regulatory uncertainties. The company stated it would not commit additional shareholder resources without clarity and adequate shareholder protection. The future of the project remains uncertain, and its termination could result in significant impairments and wind-down costs.

Kinder Morgan declared a cash dividend of $0.20 per common share for the quarter ended March 31, 2018. Additionally, during the quarter, the company repurchased approximately 13 million shares for $250 million under its $2 billion share buyback program, which began in December 2017.

Kinder Morgan maintains a strong liquidity position. As of March 31, 2018, the company had $294 million in cash and cash equivalents and $4.4 billion in availability under its $5.0 billion revolving credit facility. Cash flow from operating activities was $974 million for the quarter, providing ample funds for operations, debt service, and capital expenditures.