Kinder Morgan(KMI) - 2021 Q3 - Quarterly Report

Financial Performance - Total revenues for the three months ended September 30, 2021, were $3,824 million, up from $2,919 million for the same period in 2020, representing a 31% increase[13] - Operating income for the nine months ended September 30, 2021, was $1,966 million, compared to $580 million for the same period in 2020, reflecting a significant improvement[13] - Net income attributable to Kinder Morgan, Inc. for the three months ended September 30, 2021, was $495 million, an increase from $455 million in the same period of 2020, marking an 8.8% growth[15] - Basic and diluted earnings per share for the three months ended September 30, 2021, were $0.22, compared to $0.20 for the same period in 2020, indicating a 10% increase[13] - Net income for the nine months ended September 30, 2021, was $1,196 million, compared to a net loss of $443 million in 2020, representing a significant turnaround[19] - Total consolidated net income for the three months ended September 30, 2021, was $511 million, compared to $472 million in the same period of 2020, reflecting a growth of 8%[105] Assets and Liabilities - Total current assets decreased to $2,686 million as of September 30, 2021, from $3,203 million as of December 31, 2020[18] - Total liabilities decreased to $37,987 million as of September 30, 2021, from $39,407 million as of December 31, 2020, showing a reduction of 3.6%[18] - Long-term debt outstanding as of September 30, 2021, was $28,988 million, down from $30,838 million as of December 31, 2020, a decrease of 6%[18] - Total consolidated assets as of September 30, 2021, were $69,640 million, a decrease from $71,973 million as of September 30, 2020[105] - Total stockholders' equity decreased from $31,838 million as of December 31, 2020, to $30,992 million as of September 30, 2021, a decline of about 2.7%[18] Cash Flow and Investments - Net cash provided by operating activities increased to $4,440 million, up from $3,282 million in the same period of 2020, reflecting a growth of 35.2%[19] - Net cash used in investing activities was $1,911 million, compared to $776 million in 2020, indicating increased investment activity[19] - Issuances of debt amounted to $4,950 million, an increase from $3,888 million in the previous year, highlighting a strategy to leverage financing[19] - Payments of debt increased to $6,459 million from $3,991 million, indicating a focus on debt reduction[19] - Cash and cash equivalents decreased to $102 million as of September 30, 2021, from $1,184 million as of December 31, 2020, indicating a significant reduction in liquidity[18] Acquisitions and Goodwill - The company completed the acquisition of Kinetrex Energy for $318 million, which includes a customer relationship valued at $199 million with a 10-year amortization period[44] - The acquisition of Stagecoach Gas Services LLC was completed for approximately $1,228 million, enhancing the company's natural gas pipeline and storage capabilities[45] - Goodwill increased to $20,033 million as of September 30, 2021, up from $19,851 million at the end of 2020, reflecting acquisitions and synergies[48] Environmental and Legal Matters - The company is involved in ongoing legal proceedings related to tariffs and rates charged by SFPP, with claims for at least $50 million in rate refunds[111] - The estimated cost for the final remedy at the Portland Harbor Superfund Site is more than $3 billion, with cleanup expected to take over 10 years[122] - The company intends to vigorously defend against various legal and regulatory matters, believing that the ultimate resolution will not have a material adverse impact on its business[109] - The company accrued a total reserve for environmental liabilities of $242 million as of September 30, 2021, down from $250 million as of December 31, 2020[131] Derivative Contracts and Hedging - The company has a maximum term of hedging for energy commodity price risk through December 2025[76] - As of September 30, 2021, the notional amount of fixed-to-variable interest rate contracts is $7,100 million, with a maximum term extending to March 2035[77] - The fair value of derivative contracts as of September 30, 2021, totals $560 million in assets and $(376) million in liabilities[82] - The company reported a net current-period change in accumulated other comprehensive loss of $(235) million for the period ending September 30, 2021[73] Revenue Breakdown - Revenues from natural gas pipelines amounted to $2.555 billion, representing a 14% decline year-over-year[93] - Total commodity sales were $1.996 billion, down 14% from the prior year, with natural gas sales contributing $1.101 billion[93] - Firm services generated $1.082 billion in revenue, while fee-based services accounted for $537 million[93] - Contract asset balances increased to $62 million as of September 30, 2021, up from $20 million at the end of 2020[99] Shareholder Returns - Dividends paid during the period were $1,828 million, slightly up from $1,764 million in 2020, reflecting a commitment to returning value to shareholders[19] - Cash dividend declared for the quarterly period ended September 30, 2021, is $0.27 per share, compared to $0.2625 per share for the same period in 2020[70] - The company has repurchased approximately 32 million Class P shares at an average price of $17.71 per share, totaling approximately $575 million since the buy-back program began in December 2017[69]