Kinder Morgan(US:KMI)2024-10-18 20:11Acquisitions and Divestitures - The company acquired the North McElroy Unit for $60 million, which currently produces approximately 1,250 Bbl/d of crude oil[117]. - The company divested its Oklahoma midstream assets for $43 million in February 2024[117]. - The company sold CO assets for $19 million in June 2024, which included interests in multiple units located in the Permian Basin[117]. - The company reported a gain on divestitures of $29 million for the nine months ended September 30, 2024, compared to $9 million in the prior year[154]. Financial Performance - Revenues for the three months ended September 30, 2024, decreased by $208 million (5%) to $3,699 million compared to $3,907 million in 2023[133]. - Operating income increased by $77 million (8%) to $1,015 million for the three months ended September 30, 2024, compared to $938 million in 2023[133]. - Net income attributable to Kinder Morgan, Inc. increased by $93 million (17%) to $625 million for the three months ended September 30, 2024, compared to $532 million in 2023[133]. - Net income for the nine months ended September 30, 2024, increased by $158 million (8%) to $2,026 million compared to $1,868 million in 2023[135]. - Total revenues for the three months ended September 30, 2024, were $2,176 million, a decrease from $2,273 million in the prior year[154]. - Revenues for the three months ended September 30, 2024, were $711 million, a decrease of 17.5% from $862 million in the same period of 2023[162]. - Revenues for the three months ended September 30, 2024, were $3,328 million, with operating income of $880 million and net income of $509 million[213]. Cash Flow and Capital Expenditures - The company generated cash flows from operations of $4,125 million in the first nine months of 2024, slightly down from $4,169 million in the same period of 2023[180]. - Cash used in investing activities increased by $125 million, primarily due to a $168 million rise in capital expenditures driven by expansion projects in the Natural Gas Pipelines business segment[202]. - Cash used in financing activities decreased by $903 million, attributed to a $531 million reduction in cash related to debt activity and a $383 million decrease in cash used for share repurchases[203]. - Sustaining capital expenditures for 2024 are projected to be $1,012 million, while expansion capital expenditures are expected to be $1,748 million, totaling $2,760 million in capital expenditures[191]. - The company anticipates total capital investments of $3,144 million for 2024, which includes $1,166 million in sustaining capital investments and $1,978 million in expansion capital investments[192]. Dividends - The company expects to declare dividends of $1.15 per share for 2024, a 2% increase from the 2023 declared dividends of $1.13 per share[118]. - Declared dividends per share increased by $0.005 (2%) to $0.2875 for the three months ended September 30, 2024, compared to $0.2825 in 2023[133]. - The board of directors declared a quarterly dividend of $0.2875 per share for Q3 2024, a 2% increase over the dividend declared for Q3 2023[182]. - The company’s dividends are not cumulative, meaning unpaid dividends do not accumulate for future payments[207]. - The board of directors will consider various factors, including financial condition and liquidity requirements, when declaring dividends[206]. Debt and Liabilities - Net debt as of September 30, 2024, was calculated at $31,689 million after accounting for cash and cash equivalents, debt fair value adjustments, and foreign exchange impacts[131]. - As of September 30, 2024, the Obligated Group had $31,067 million of Guaranteed Notes outstanding, a slight decrease from $31,167 million as of December 31, 2023[211]. - Total liabilities for the Obligated Group were $40,650 million as of September 30, 2024, compared to $40,628 million at the end of 2023[212]. - Current liabilities decreased from $6,907 million at the end of 2023 to $4,360 million as of September 30, 2024[212]. Operational Metrics - Adjusted EBITDA for the three months ended September 30, 2024, was $1,880 million, an increase from $1,835 million in the same period of 2023[146]. - The company reported a DCF (Distributable Cash Flow) of $1,096 million for the three months ended September 30, 2024, compared to $1,094 million for the same period in 2023[146]. - Total oil production for the three months ended September 30, 2024, was 25.92 MBbl/d, down from 27.67 MBbl/d in the same period of 2023, representing a decrease of 6%[174]. - Realized weighted average oil price for the three months ended September 30, 2024, was $68.42 per Bbl, compared to $67.60 per Bbl in the same period of 2023, an increase of 1.2%[174]. Segment Performance - Adjusted Segment EBDA provides insight into performance trends across business segments and is used for resource allocation and performance assessment[128]. - Natural Gas Pipelines Segment EBDA increased by $115 million (10%) for the three months and $106 million (3%) for the nine months ended September 30, 2024, compared to the prior year[155]. - Midstream's revenue increased by $113 million (35%) for the three months and $75 million (6%) for the nine months ended September 30, 2024, attributed to non-cash mark-to-market derivative contracts and a gain on asset sales[157]. - Segment EBDA for the Products Pipelines decreased by $33 million (10.6%) to $278 million for the three months ended September 30, 2024, compared to $311 million in 2023[164]. - The Crude and Condensate segment experienced a $27 million (30%) decrease in EBDA for the three months ended September 30, 2024, primarily due to a $67 million non-cash impairment in the previous year[164]. - Southeast Refined Products saw a $21 million (26%) decrease in EBDA for the three months ended September 30, 2024, driven by unfavorable commodity pricing[165]. - West Coast Refined Products reported a $15 million (11%) increase in EBDA for the three months ended September 30, 2024, attributed to higher transportation rates and volumes[165]. Regulatory and Compliance - The estimated costs necessary to comply with the EPA's "Good Neighbor Plan" could range from $1.5 billion to $1.8 billion, which may significantly impact the company's operations[197]. - The company has budgeted for sustaining capital expenditures on a bottom-up basis to maintain safe and efficient operations, with additional expenditures expected to produce economic benefits[188]. - The classification of capital expenditures as sustaining or expansion affects the discounted cash flow (DCF) calculations, as expansion capital expenditures are not deducted in DCF calculations[189]. Market and Risk Exposure - There have been no material changes in market risk exposures since December 31, 2023[214].