Summary
Kinder Morgan, Inc. (KMI) reported a significant net loss of $306 million for the first quarter of 2020, a sharp contrast to the $556 million net income in the prior year. This downturn was heavily influenced by a substantial $971 million loss related to impairments and divestitures, primarily driven by the economic impact of the COVID-19 pandemic and a sharp decline in commodity prices. Specifically, a $600 million goodwill impairment charge and a $350 million impairment of long-lived assets within the CO2 business segment were recognized. Despite the net loss, the company maintained a strong operational cash flow of $893 million, an increase from the prior year. This robust cash generation, along with proactive capital management such as reducing planned expansion projects by $700 million, allowed KMI to fund its operations and declare a dividend of $0.2625 per share, a slight increase from the previous quarter. The company also maintained significant borrowing capacity under its credit facility, indicating a stable short-term liquidity position amidst challenging market conditions.
Financial Highlights
52 data points| Revenue | $3.11B |
| Cost of Revenue | $663.00M |
| Gross Profit | $2.44B |
| Operating Expenses | $3.06B |
| Operating Income | $43.00M |
| Net Income | -$306.00M |
| EPS (Basic) | $-0.14 |
| EPS (Diluted) | $-0.14 |
| Shares Outstanding (Basic) | 2.26B |
| Shares Outstanding (Diluted) | 2.26B |
Key Highlights
- 1Net loss of $306 million in Q1 2020, compared to net income of $556 million in Q1 2019.
- 2Recognized $971 million in pre-tax losses from impairments and divestitures, largely due to the impact of COVID-19 and commodity price declines, including a $600 million goodwill impairment and a $350 million long-lived asset impairment in the CO2 segment.
- 3Operating cash flow increased to $893 million in Q1 2020 from $635 million in Q1 2019.
- 4Total revenues decreased to $3,106 million from $3,429 million in the prior year's quarter.
- 5Reduced 2020 capital expenditure budget by approximately $700 million due to market conditions affecting project economics.
- 6Maintained $3.9 billion in available borrowing capacity under its $4 billion credit facility.
- 7Declared a quarterly dividend of $0.2625 per share, representing a 5% increase from the previous quarter, but a moderation from the previously planned 25% increase.