KINDER MORGAN, INC. Quarterly Report for Q3 Ended Sep 30, 2023

Summary

Kinder Morgan, Inc. (KMI) reported third quarter 2023 results showing a year-over-year decrease in total revenues, primarily driven by lower commodity prices impacting natural gas and product sales. Despite the revenue decline, operating income remained stable due to corresponding decreases in costs of sales. Net income attributable to Kinder Morgan, Inc. saw a slight decline to $532 million from $576 million in the prior year's comparable quarter, resulting in diluted EPS of $0.24 compared to $0.25. The company's natural gas pipeline segment showed segment EBDA growth, while products pipelines and CO2 segments experienced declines. KMI continued its capital allocation strategy with $1.9 billion expected for expansion projects and acquisitions in 2023, and announced a quarterly dividend of $0.2825 per share, a 2% increase year-over-year. For the first nine months of 2023, KMI reported a revenue decrease of 23% driven by similar factors as the quarterly results. Net income attributable to KMI declined to $1.797 billion from $1.878 billion in the same period of 2022. The company highlighted increased cash flow from operating activities by $606 million, driven by improved working capital management. KMI maintained its focus on financial discipline, with a total debt of $30.99 billion and a reported Net Debt-to-Adjusted EBITDA ratio that management uses to evaluate leverage.

Key Highlights

• 1Total revenues for Q3 2023 decreased by 25% to $3.9 billion compared to $5.18 billion in Q3 2022, primarily due to lower commodity prices impacting natural gas and product sales.
• 2Net income attributable to Kinder Morgan, Inc. decreased to $532 million ($0.24/share) in Q3 2023 from $576 million ($0.25/share) in Q3 2022.
• 3Natural Gas Pipelines segment EBDA increased by $44 million to $1.179 billion in Q3 2023 compared to Q3 2022, driven by improved earnings from EPNG and Stagecoach assets.
• 4Products Pipelines segment EBDA increased by $54 million to $311 million in Q3 2023 compared to Q3 2022, driven by higher earnings in Southeast Refined Products and Crude and Condensate segments.
• 5CO2 segment EBDA decreased by $52 million to $163 million in Q3 2023 compared to Q3 2022, primarily due to unfavorable changes in derivative hedge contracts and lower NGL prices/volumes.
• 6The company declared a quarterly dividend of $0.2825 per share, representing a 2% increase year-over-year.
• 7Cash provided by operating activities for the first nine months of 2023 increased by $606 million to $4.169 billion, largely due to improved working capital management.

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