Article content material

Beats Funds for the Second Quarter, Returns Worth to Shareholders and Maintains Wholesome Steadiness Sheet

HOUSTON — Kinder Morgan, Inc.’s (NYSE: KMI) board of administrators at present accredited a money dividend of $0.2825 per share for the second quarter ($1.13 annualized), payable on August 15, 2023, to stockholders of report as of the shut of enterprise on July 31, 2023. This dividend is a 2% improve over the second quarter of 2022.

Article content material

The corporate is reporting second quarter web earnings attributable to KMI of $586 million, in comparison with $635 million within the second quarter of 2022 and distributable money movement (DCF) of $1,076 million, in comparison with $1,176 million within the second quarter of 2022. Adjusted Earnings have been $540 million for the quarter, versus $621 million within the second quarter of 2022. Adjusted EBITDA and DCF for the quarter have been each above our 2023 plan.

Article content material

“As we reiterate each quarter, the KMI board and administration crew are absolutely dedicated to the usage of our robust money movement to learn our shareholders,” stated Govt Chairman Richard D. Kinder. “We concentrate on sustaining a robust steadiness sheet whereas internally funding capital tasks that produce returns properly in extra of our value of capital — together with tasks which can be a part of the continuing power evolution towards a decrease carbon future. We additionally proceed to pay a wholesome and rising dividend which, based mostly on our present inventory worth, leads to a prime 10 yield within the S&P 500 with strong protection. Lastly, we’ve got continued the opportunistic repurchasing of our shares, totaling nearly 20 million repurchased shares for about $330 million to date this 12 months.”

“KMI as soon as once more noticed the worth of its present pure gasoline transportation and storage property which can be ready to reply to unstable market circumstances brought on by excessive climate occasions and an more and more intermittent resource-based electrical grid,” stated Chief Govt Officer Steve Kean. “Our 700 billion cubic ft (Bcf) of operated pure gasoline storage capability is especially helpful in backstopping intermittent renewable electrical energy sources. Monetary contributions from the Pure Gasoline Pipeline enterprise phase have been up relative to the second quarter of 2022 and forward of price range. Our Terminals enterprise phase additionally over carried out relative to each the second quarter of 2022 and price range.

“We’re executing on capital-efficient expansions of our present pure gasoline pipeline and storage techniques. We continued working so as to add roughly 550 million cubic ft per day (MMcf/d) of capability to the Permian Freeway Pipeline (PHP) system. We additionally started building on an enlargement undertaking at our Markham Storage facility alongside the Texas Gulf Coast, the place we might be including greater than 6 Bcf of incremental working gasoline storage capability.”

“Within the face of decrease commodity costs and better curiosity expense versus the second quarter of 2022, the corporate generated earnings per share of $0.26, DCF per share of $0.48 and strong extra protection of our dividend. Considerably, each Adjusted EBITDA and DCF for the quarter have been above our 2023 plan,” stated KMI President Kim Dang.

“Earnings per share for the quarter have been down 7%. DCF per share was down 8% as in comparison with the second quarter of 2022. Along with decrease commodity costs and better curiosity expense, DCF was additionally impacted by increased sustaining capital expenditures versus the prior 12 months interval. Excluding the influence of decrease commodity costs and better curiosity expense, our efficiency would have been favorable to the prior 12 months interval.

Article content material

“KMI’s steadiness sheet is robust, as we ended the second quarter with a Internet Debt-to-Adjusted EBITDA ratio of 4.1 occasions, in keeping with our price range and properly under our long-term goal of roughly 4.5 occasions. That is particularly noteworthy provided that we executed roughly $200 million in unbudgeted, opportunistic share repurchases throughout the quarter,” continued Dang.

“Our undertaking backlog on the finish of the second quarter was $3.7 billion, flat to the primary quarter. In calculating backlog Undertaking EBITDA, we exclude the CO₂ enterprise phase, the place there may be extra variability to earnings than our different enterprise segments, however increased return thresholds to compensate. We have now additionally adjusted the calculation this quarter to exclude gathering and processing tasks as a result of equally uneven earnings related to these tasks. This exclusion has the impact of accelerating our backlog a number of in comparison with what has beforehand been reported. We count on the remaining $2.6 billion in tasks within the backlog to generate a median Undertaking EBITDA a number of of roughly 4.2 occasions, which compares to a a number of of three.9 occasions calculated on the identical foundation for the prior quarter.

“With continued robust emphasis on our base enterprise, we’re additionally devoting roughly 80% of our undertaking backlog to lower-carbon power investments, together with pure gasoline as an alternative to increased emitting fuels, producer licensed pure gasoline, renewable pure gasoline (RNG), renewable diesel (RD), and feedstocks related to RD and sustainable aviation gas (SAF),” stated Dang.

Dang continued, “Throughout the quarter, we positioned in service our renewable feedstock storage and logistics hub undertaking with Neste at our Harvey, Louisiana Terminal, and continued work on the RD and SAF feedstock storage and logistics providing at our Geismar River Terminal in Geismar, Louisiana.

“In our Power Transition Ventures group, the Twin Bridges landfill RNG facility started industrial in-service on the finish of June, whereas allowing and engineering design proceed to progress on our conversion of the Autumn Hills landfill gasoline website to an RNG facility. Together with the Indiana RNG tasks underneath building on the Liberty and Prairie View landfills, we proceed to hunt tasks within the power evolution that we count on to generate enticing returns for our shareholders.”

For the primary six months of 2023, the corporate reported web earnings attributable to KMI of $1,265 million, in comparison with $1,302 million for the primary six months of 2022; and DCF of $2,450 million, down 7% from $2,631 million for the comparable interval in 2022. Internet earnings and DCF have been down in comparison with the prior interval resulting from decrease commodity costs and better curiosity expense. DCF was additional impacted by increased sustaining capital expenditures versus the prior 12 months interval.

Article content material

Article content material

2023 Outlook

For 2023, KMI budgeted web earnings attributable to KMI of $2.5 billion ($1.12 per share) and expects to declare dividends of $1.13 per share, a 2% improve from the dividends declared for 2022. The corporate additionally budgeted 2023 DCF of $4.8 billion ($2.13 per share), Adjusted EBITDA of $7.7 billion and to finish 2023 with a Internet Debt-to-Adjusted EBITDA ratio of 4.0 occasions, properly under our long-term goal of 4.5 occasions.

Whereas we’re on price range year-to-date, we now count on to complete 2023 barely under our plan on a full-year foundation, all of which might be defined by anticipated decrease commodity costs. To date, crude oil and pure gasoline costs have been under our full 12 months 2023 price range assumptions of $85 per barrel and $5.50 per MMBtu, respectively, and our NGL to crude ratio has been under our budgeted ratio of 45%. We do count on robust efficiency in our general enterprise to partially offset the weaker pricing.

This press launch contains Adjusted Earnings and DCF, in every case within the combination and per share, Adjusted Phase EBDA, Adjusted EBITDA, Internet Debt, free money movement (FCF) and Undertaking EBITDA, all of that are non-GAAP monetary measures. For descriptions of those non-GAAP monetary measures and reconciliations to probably the most comparable measures ready in accordance with typically accepted accounting rules, please see “Non-GAAP Monetary Measures” and the tables accompanying our preliminary monetary statements.

Overview of Enterprise Segments

“The Pure Gasoline Pipelines enterprise phase’s monetary efficiency was up within the second quarter of 2023 relative to the second quarter of 2022, totally on increased contributions from Midcontinent Specific Pipeline, our Texas Intrastate system, El Paso Pure Gasoline (EPNG), our Stagecoach asset and Tennessee Gasoline Pipeline (TGP), partially offset by decrease contributions from our Eagle Ford gathering system property,” stated Dang.

Pure gasoline transport volumes have been up 5% in comparison with the second quarter of 2022, primarily from will increase on EPNG resulting from returning a pipeline to service and the retirement of a coal-fired energy plant, and on our Texas Intrastate system throughout a wide range of present shippers and new contracts, partially offset by lowered volumes on TGP. Pure gasoline gathering volumes have been up 19% from the second quarter of 2022 throughout most of our techniques.

“Contributions from the Merchandise Pipelines enterprise phase have been down in comparison with the second quarter of 2022 largely as a result of influence within the prior 12 months interval of sharply rising commodity costs, primarily impacting our transmix enterprise. The crude and condensate enterprise was additionally impacted by decrease recontracting charges within the Eagle Ford. Complete refined merchandise volumes have been comparatively flat in comparison with the second quarter of 2022,” Dang stated. “Gasoline volumes have been under the comparable interval final 12 months by 1% and diesel volumes have been down 4%. Jet gas volumes continued their robust rebound, up 9% versus the second quarter of 2022. Volumes in our crude and condensate enterprise have been up 4% in complete.”

Article content material

“Terminals enterprise phase earnings have been up in comparison with the second quarter of 2022. Earnings contributions from our Jones Act tanker enterprise have been meaningfully increased in comparison with the prior 12 months interval on increased common constitution charges. The fleet stays absolutely contracted underneath time period constitution agreements. Our bulk enterprise benefited from fee escalations throughout a number of commodities in addition to increased coal and fertilizer volumes in comparison with the prior 12 months interval,” continued Dang. “Our liquids enterprise was down modestly, as contributions from development tasks and fee escalations have been greater than offset by increased working prices and weak point throughout sure of our home truck rack property. Utilization, notably at our key refined product hubs alongside the Houston Ship Channel and in New York Harbor, strengthened within the quarter. The earnings variance for the quarter was additionally impacted by a achieve on the sale of an idled petroleum rack terminal realized within the prior 12 months interval.”

“CO₂ enterprise phase earnings have been down in comparison with the second quarter of 2022, primarily resulting from decrease realized pure gasoline liquids (NGL) and CO₂ costs. Our realized weighted common NGL worth for the quarter was down 25% from the second quarter of 2022 at $31.22 per barrel, our realized weighted common CO₂ costs have been down $0.65 or 35%, and our realized weighted common crude oil worth was $67.73, down 2%,” stated Dang. “Second quarter 2023 mixed web oil manufacturing throughout our fields was up 7% in comparison with the identical interval in 2022. Crude volumes for the 12 months are forecasted to be above plan, a outstanding achievement given the influence of an prolonged outage at SACROC within the first quarter. NGL gross sales volumes web to KMI have been flat versus the second quarter of 2022. CO₂ gross sales volumes have been down 2% on a net-to-KMI foundation in comparison with the second quarter of 2022. CO₂ volumes are anticipated to be above plan for the 12 months.”

Different Information

Company

Pure Gasoline Pipelines

Article content material

Terminals

CO₂

Power Transition Ventures

Article content material

Kinder Morgan, Inc. (NYSE: KMI) is among the largest power infrastructure firms in North America. Entry to dependable, inexpensive power is a important part for enhancing lives world wide. We’re dedicated to offering power transportation and storage providers in a secure, environment friendly and environmentally accountable method for the advantage of the folks, communities and companies we serve. We personal an curiosity in or function roughly 82,000 miles of pipelines, 140 terminals, 700 billion cubic ft of working pure gasoline storage capability and have renewable pure gasoline technology capability of roughly 3.8 Bcf per 12 months with an extra 3.1 Bcf in growth. Our pipelines transport pure gasoline, refined petroleum merchandise, crude oil, condensate, CO₂, renewable fuels and different merchandise, and our terminals retailer and deal with numerous commodities together with gasoline, diesel gas, jet gas, chemical substances, metals, petroleum coke and ethanol and different renewable fuels and feedstocks. Study extra about our work advancing power options on the decrease carbon initiatives web page at www.kindermorgan.com.

Please be part of Kinder Morgan, Inc. at 4:30 p.m. ET on Wednesday, July 19, at www.kindermorgan.com for a LIVE webcast convention name on the corporate’s second quarter earnings.

Non-GAAP Monetary Measures

Our non-GAAP monetary measures described under shouldn’t be thought of alternate options to GAAP web earnings attributable to Kinder Morgan, Inc. or different GAAP measures and have necessary limitations as analytical instruments. Our computations of those non-GAAP monetary measures could differ from equally titled measures utilized by others. You shouldn’t think about these non-GAAP monetary measures in isolation or as substitutes for an evaluation of our outcomes as reported underneath GAAP. Administration compensates for the constraints of our consolidated non-GAAP monetary measures by reviewing our comparable GAAP measures recognized within the descriptions of consolidated non-GAAP measures under, understanding the variations between the measures and taking this info into consideration in its evaluation and its decision-making processes.

Sure Objects, as changes used to calculate our non-GAAP monetary measures, are objects which can be required by GAAP to be mirrored in web earnings attributable to Kinder Morgan, Inc., however usually both (1) wouldn’t have a money influence (for instance, unsettled commodity hedges and asset impairments), or (2) by their nature are individually identifiable from our regular enterprise operations and generally are more likely to happen solely sporadically (for instance, sure authorized settlements, enactment of latest tax laws and casualty losses). (See the accompanying Tables 2, 3, 4, and 6.) We additionally embody changes associated to joint ventures (see “ Quantities from Joint Ventures” under).

Article content material

Adjusted Earnings is calculated by adjusting web earnings attributable to Kinder Morgan, Inc. for Sure Objects. Adjusted Earnings is utilized by us, buyers and different exterior customers of our monetary statements as a supplemental measure that gives decision-useful info relating to our period-over-period efficiency and talent to generate earnings which can be core to our ongoing operations. We imagine the GAAP measure most immediately corresponding to Adjusted Earnings is web earnings attributable to Kinder Morgan, Inc. Adjusted Earnings per share makes use of Adjusted Earnings and applies the identical two-class methodology utilized in arriving at primary earnings per share. (See the accompanying Tables 1 and a couple of.)

Article content material

DCF is calculated by adjusting web earnings attributable to Kinder Morgan, Inc. for Sure Objects, and additional for DD&A and amortization of extra value of fairness investments, earnings tax expense, money taxes, sustaining capital expenditures and different objects. We additionally alter quantities from joint ventures for earnings taxes, DD&A, money taxes and sustaining capital expenditures (see “ Quantities from Joint Ventures” under). DCF is a big efficiency measure utilized by us, buyers and different exterior customers of our monetary statements to guage our efficiency and to measure and estimate the power of our property to generate financial earnings after paying curiosity expense, paying money taxes and expending sustaining capital. DCF offers extra perception into the particular prices related to our property within the present interval and facilitates period-to-period comparisons of our efficiency from ongoing enterprise actions. DCF can be utilized by us, buyers, and different exterior customers to match the efficiency of firms throughout our {industry}. DCF per share serves as the first monetary efficiency goal for functions of annual bonuses underneath our annual incentive compensation program and for performance-based vesting of fairness compensation grants underneath our long-term incentive compensation program. DCF shouldn’t be used as a substitute for web money supplied by working actions computed underneath GAAP. We imagine the GAAP measure most immediately corresponding to DCF is web earnings attributable to Kinder Morgan, Inc. DCF per share is DCF divided by common excellent shares, together with restricted inventory awards that take part in dividends. (See the accompanying Desk 2.)

Adjusted Phase EBDA is calculated by adjusting phase earnings earlier than DD&A and amortization of extra value of fairness investments, basic and administrative bills and company costs, curiosity expense, and earnings taxes (Phase EBDA) for Sure Objects attributable to the phase. Adjusted Phase EBDA is utilized by administration in its evaluation of phase efficiency and administration of our enterprise. We imagine Adjusted Phase EBDA is a helpful efficiency metric as a result of it offers administration, buyers and different exterior customers of our monetary statements extra perception into efficiency tendencies throughout our enterprise segments, our segments’ relative contributions to our consolidated efficiency and the power of our segments to generate earnings on an ongoing foundation. Adjusted Phase EBDA can be used as a think about figuring out compensation underneath our annual incentive compensation program for our enterprise phase presidents and different enterprise phase workers. We imagine it’s helpful to buyers as a result of it’s a measure that administration makes use of to allocate sources to our segments and assess every phase’s efficiency. (See the accompanying Desk 4.)

Article content material

Adjusted EBITDA is calculated by adjusting web earnings attributable to Kinder Morgan, Inc. earlier than curiosity expense, earnings taxes, DD&A, and amortization of extra value of fairness investments (EBITDA) for Sure Objects. We additionally embody quantities from joint ventures for earnings taxes and DD&A (see “ Quantities from Joint Ventures” under). Adjusted EBITDA (on a rolling 12-months foundation) is utilized by administration, buyers and different exterior customers, together with our Internet Debt (as described additional under), to guage our leverage. Administration and exterior customers additionally use Adjusted EBITDA as an necessary metric to match the valuations of firms throughout our {industry}. Our ratio of Internet Debt-to-Adjusted EBITDA is used as a supplemental efficiency goal for functions of our annual incentive compensation program. We imagine the GAAP measure most immediately corresponding to Adjusted EBITDA is web earnings attributable to Kinder Morgan, Inc. (See the accompanying Tables 3 and 6.)

Quantities from Joint Ventures – Sure Objects, DCF and Adjusted EBITDA mirror quantities from unconsolidated joint ventures (JVs) and consolidated JVs using the identical recognition and measurement strategies used to report “Earnings from fairness investments” and “Noncontrolling pursuits (NCI),” respectively. The calculations of DCF and Adjusted EBITDA associated to our unconsolidated and consolidated JVs embody the identical objects (DD&A and earnings tax expense, and for DCF solely, additionally money taxes and sustaining capital expenditures) with respect to the JVs as these included within the calculations of DCF and Adjusted EBITDA for our wholly-owned consolidated subsidiaries; additional, we take away the portion of those changes attributable to non-controlling pursuits. (See Tables 2, 3, and 6.) Though these quantities associated to our unconsolidated JVs are included within the calculations of DCF and Adjusted EBITDA, such inclusion shouldn’t be understood to indicate that we’ve got management over the operations and ensuing revenues, bills or money flows of such unconsolidated JVs.

Internet Debt is calculated by subtracting from debt (1) money and money equivalents, (2) debt honest worth changes, and (3) the international trade influence on Euro-denominated bonds for which we’ve got entered into foreign money swaps. Internet Debt, by itself and together with our Adjusted EBITDA (on a rolling 12-months foundation) as a part of a ratio of Internet Debt-to-Adjusted EBITDA, is a non-GAAP monetary measure that’s utilized by administration, buyers and different exterior customers of our monetary info to guage our leverage. Our ratio of Internet Debt-to-Adjusted EBITDA can be used as a supplemental efficiency goal for functions of our annual incentive compensation program. We imagine probably the most comparable measure to Internet Debt is complete debt as reconciled within the notes to the accompanying Preliminary Consolidated Steadiness Sheets in Desk 6.

Article content material

Undertaking EBITDA is calculated for a person capital undertaking as earnings earlier than curiosity expense, taxes, DD&A and basic and administrative bills attributable to such undertaking, or for JV tasks, in keeping with the strategies described above underneath “Quantities from Joint Ventures,” and together with capital expenditures for the undertaking, is the idea for our Undertaking EBITDA a number of. Administration, buyers and others use Undertaking EBITDA to guage our return on funding for capital tasks earlier than bills which can be typically not controllable by working managers in our enterprise segments. We imagine the GAAP measure most immediately corresponding to Undertaking EBITDA is the portion of web earnings attributable to a capital undertaking. We don’t present the portion of budgeted web earnings attributable to particular person capital tasks (the GAAP monetary measure most immediately corresponding to Undertaking EBITDA) as a result of impracticality of predicting, on a project-by-project foundation by the second full 12 months of operations, sure quantities required by GAAP, comparable to projected commodity costs, unrealized positive aspects and losses on derivatives marked to market, and potential estimates for sure contingent liabilities related to the undertaking completion.

FCF is calculated by lowering money movement from operations for capital expenditures (sustaining and enlargement), and FCF after dividends is calculated by additional lowering FCF for dividends paid throughout the interval. FCF is utilized by administration, buyers and different exterior customers as an extra leverage metric, and FCF after dividends offers extra perception into money movement technology. Due to this fact, we imagine FCF is beneficial to our buyers. We imagine the GAAP measure most immediately corresponding to FCF is money movement from operations. (See the accompanying Desk 7.)

Necessary Info Regarding Ahead-Trying Statements

This information launch contains forward-looking statements inside the which means of the U.S. Non-public Securities Litigation Reform Act of 1995 and Part 21E of the Securities Alternate Act of 1934. Typically the phrases “expects,” “believes,” “anticipates,” “plans,” “will,” “shall,” “estimates,” “tasks,” and related expressions determine forward-looking statements, that are typically not historic in nature. Ahead-looking statements on this information launch embody, amongst others, categorical or implied statements pertaining to: the long-term demand for KMI’s property and providers; power evolution-related alternatives; KMI’s 2023 expectations; anticipated dividends; and KMI’s capital tasks, together with anticipated completion timing and advantages of these tasks. Ahead-looking statements are topic to dangers and uncertainties and are based mostly on the beliefs and assumptions of administration, based mostly on info presently accessible to them. Though KMI believes that these forward-looking statements are based mostly on cheap assumptions, it may give no assurance as to when or if any such forward-looking statements will materialize nor their final influence on our operations or monetary situation. Necessary elements that would trigger precise outcomes to vary materially from these expressed in or implied by these forward-looking statements embody: the timing and extent of adjustments within the provide of and demand for the merchandise we transport and deal with; commodity costs; counterparty monetary danger; and the opposite dangers and uncertainties described in KMI’s experiences filed with the Securities and Alternate Fee (SEC), together with its Annual Report on Kind 10-Ok for the year-ended December 31, 2022 (underneath the headings “Danger Elements” and “Info Relating to Ahead-Trying Statements” and elsewhere), and its subsequent experiences, which can be found by the SEC’s EDGAR system at www.sec.gov and on our web site at ir.kindermorgan.com. Ahead-looking statements converse solely as of the date they have been made, and besides to the extent required by regulation, KMI undertakes no obligation to replace any forward-looking assertion due to new info, future occasions or different elements. Due to these dangers and uncertainties, readers mustn’t place undue reliance on these forward-looking statements.

Article content material

Article content material

Article content material

Article content material

Article content material

View supply model on businesswire.com: https://www.businesswire.com/information/house/20230719541276/en/

Contacts

Dave Conover
Media Relations
[email protected]

Investor Relations
(800) 348-7320
[email protected]

#distro

Article content material