10-QPeriod: Q1 FY2019

KINDER MORGAN, INC. Quarterly Report for Q1 Ended Mar 31, 2019

Filed April 23, 2019For Securities:KMIEP-PC

Summary

Kinder Morgan, Inc. (KMI) reported solid financial results for the first quarter of 2019, demonstrating resilience and operational strength. Total revenues slightly increased to $3.429 billion from $3.418 billion in the prior year, while net income attributable to Kinder Morgan, Inc. rose by 6% to $556 million, or $0.24 per diluted share, compared to $524 million, or $0.22 per diluted share, in the first quarter of 2018. This performance was driven by strong contributions from the Natural Gas Pipelines segment, which saw a 7% increase in revenues, and improved operational efficiency across other segments, partially offset by lower contributions from the CO2 segment due to commodity prices and the divestiture of the Kinder Morgan Canada business. The company also made significant progress in its capital structure management, notably utilizing proceeds from the Trans Mountain Pipeline System sale to reduce debt. Liquidity remains strong, with substantial borrowing capacity available on its credit facilities. KMI continues to focus on returning value to shareholders, declaring a quarterly dividend of $0.25 per common share, reflecting confidence in its ongoing operational performance and financial stability.

Financial Highlights

52 data points
Beta

Revenue

$3.43B

72.4% Gross Margin

Net Income

$556.00M

16.2% Net Margin

EPS (Diluted)

$0.24

Total Assets

$76.29B

Cash & Equivalents

$221.00M

Free Cash Flow

$81.00M

Financial Statements
Beta
Revenue$3.43B
Cost of Revenue$948.00M
Gross Profit$2.48B
Operating Expenses$2.41B
Operating Income$1.02B
Net Income$556.00M
EPS (Basic)$0.24
Shares Outstanding (Basic)2.26B

Key Highlights

  • 1Net income attributable to Kinder Morgan, Inc. increased by 6% to $556 million, or $0.24 per diluted share, from $524 million, or $0.22 per diluted share, in Q1 2018.
  • 2Total revenues saw a modest increase to $3.429 billion, up from $3.418 billion in Q1 2018.
  • 3Natural Gas Pipelines segment reported strong performance with a 7% revenue increase and a 12% rise in Segment EBDA before certain items, driven by expansion projects and higher capacity sales.
  • 4The company utilized proceeds from the Trans Mountain Pipeline System sale to reduce debt, repaying $0.4 billion in commercial paper and $1.3 billion in maturing long-term debt.
  • 5Cash flow from operating activities was $635 million for the quarter, down from $974 million in the prior year, primarily due to foreign income tax payments related to the Trans Mountain sale.
  • 6Kinder Morgan declared a quarterly dividend of $0.25 per common share, an increase from $0.20 per share in the prior year's quarter.
  • 7Consolidated assets decreased to $76.29 billion from $78.87 billion at the end of 2018, largely reflecting debt reduction activities.

Frequently Asked Questions

KMI reported a slight increase in total revenues to $3.429 billion in the first quarter of 2019, compared to $3.418 billion in the first quarter of 2018. Net income attributable to Kinder Morgan, Inc. saw a more significant increase of 6%, rising to $556 million from $524 million in the prior year's quarter. This translated to an increase in diluted earnings per common share from $0.22 to $0.24.

The primary driver of revenue growth was the strong performance of the Natural Gas Pipelines segment, which experienced a 7% increase in revenues. This was attributed to contributions from expansion projects placed in service, higher firm transportation revenues, and increased capacity sales. Other segments also contributed, though the CO2 segment saw a slight decrease due to lower commodity prices.

Kinder Morgan continued to focus on debt management by utilizing proceeds from the Trans Mountain Pipeline System sale to repay $0.4 billion in commercial paper and $1.3 billion in maturing long-term debt. The company maintained strong liquidity, with $221 million in cash and cash equivalents and significant remaining borrowing capacity under its credit facilities.

KMI declared a quarterly dividend of $0.25 per common share for the period ending March 31, 2019, an increase from $0.20 in the prior year's quarter. The company expects to declare a total of $1.00 per share in common stock dividends for the full year 2019, signaling a continued commitment to returning capital to shareholders.