{"id":515911,"date":"2021-07-21T16:08:42","date_gmt":"2021-07-21T20:08:42","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/kinder-morgan-announces-0-27-per-share-dividend-and-results-for-second-quarter-of-2021\/"},"modified":"2021-07-21T16:08:42","modified_gmt":"2021-07-21T20:08:42","slug":"kinder-morgan-announces-0-27-per-share-dividend-and-results-for-second-quarter-of-2021","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/kinder-morgan-announces-0-27-per-share-dividend-and-results-for-second-quarter-of-2021\/","title":{"rendered":"Kinder Morgan Announces $0.27 Per Share Dividend and Results for Second Quarter Of 2021"},"content":{"rendered":"

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Kinder Morgan Announces $0.27 Per Share Dividend and Results for Second Quarter Of 2021<\/b><\/p>\n

HOUSTON–(BUSINESS WIRE<\/a>)–
\nKinder Morgan, Inc.\u2019s (NYSE: KMI) board of directors today approved a cash dividend of $0.27 per share for the second quarter ($1.08 annualized), payable on August 16, 2021, to stockholders of record as of the close of business on August 2, 2021. This dividend represents a 3% increase over the second quarter of 2020.\n<\/p>\n

\nKMI is reporting a second quarter net loss attributable to KMI of $757 million, compared to a net loss attributable to KMI of $637 million in the second quarter of 2020; and distributable cash flow (DCF) of $1,025 million, compared to $1,001 million in the second quarter of 2020. This quarter\u2019s net loss was primarily due to a $1,600 million ($1,228 million after-tax), non-cash impairment related to anticipated lower volumes and rates on contract renewals on our South Texas natural gas processing and gathering assets. Adjusted Earnings, which do not include that impairment, were $516 million for the quarter.\n<\/p>\n

\n\u201cAs the global economy continues to recover from the pandemic, our company generated substantial Adjusted Earnings and robust coverage of this quarter\u2019s dividend. Our shareholders continue to benefit from the philosophy that guides our decision-making: fund our expansion capital needs internally, maintain a healthy balance sheet, and return excess cash to our shareholders through dividend increases and\/or share repurchases,\u201d said KMI Executive Chairman Richard D. Kinder. \u201cThe fruits of that philosophy are clear, as we have internally funded expansion projects and steadily increased our dividend while at the same time reducing our Net Debt by more than $12 billion in the last six years.\u201d\n<\/p>\n

\n\u201cOur diversified portfolio again proved its worth as we saw greater contributions relative to the second quarter of 2020 from three business segments: Natural Gas Pipelines, Products Pipelines and Terminals. The company\u2019s performance continues to demonstrate that the need for our assets remains very strong,\u201d said KMI Chief Executive Officer Steve Kean. \u201cOur business segments are extremely well-positioned in markets throughout the United States, and our acquisition this quarter of the business of Stagecoach Gas Services LLC (Stagecoach) will enable us to provide even greater levels of service to our natural gas customers. With our strong participation in the liquefied natural gas (LNG) value chain, we will also increasingly benefit from growing global natural gas demand, as analysts project U.S. LNG exports will double within the coming decade.\n<\/p>\n

\n\u201cCloser to home, we are seeing greater interest in firm natural gas transportation and storage contracts here in Texas and in other states that suffered during the February winter storm. And we continue to highlight our services in the growing market for responsibly sourced natural gas by virtue of the low methane emission intensity of our assets. All of this makes us confident in the future of our business,\u201d Kean said.\n<\/p>\n

\n\u201cWhile our financial performance during the quarter was quite strong, due to the non-cash impairment noted above, we generated a second quarter loss per share of $0.34, compared to a loss per share of $0.28 in the second quarter of 2020, a quarter in which we also took substantial non-cash impairments,\u201d said KMI President Kim Dang. \u201cAt $0.45 per share, DCF per share was up $0.01 from the second quarter of 2020. We achieved $411 million of excess DCF above our declared dividend.\n<\/p>\n

\n\u201cIn addition to the continued strength of our interconnected network of assets noted above, we made progress this quarter in positioning the company for participation in the energy transition. At only a little more than four months into its existence, our Energy Transition Ventures Group has already signed its first significant acquisition in Kinetrex Energy, a rapidly growing leader in producing and supplying renewable natural gas (RNG), which we expect to close in the third quarter. By capturing methane produced by decomposing organic waste that would otherwise be released into the atmosphere, the RNG production process reduces or even eliminates greenhouse gas emissions. We are confident that this is only the first of many opportunities that the team will find in the ongoing energy transition,\u201d said Dang.\n<\/p>\n

\nFor the first six months of 2021, KMI reported net income attributable to KMI of $652 million, compared to a net loss attributable to KMI of $943 million for the first six months of 2020; and DCF of $3,354 million, up 48% from $2,262 million for the comparable period in 2020. The increases compared to the prior period are primarily related to the February winter storm and are therefore largely nonrecurring.\n<\/p>\n

2021 Outlook<\/span><\/b><\/p>\n

\nFor 2021, KMI now expects to generate net income attributable to KMI of $1.7 billion and declare dividends of $1.08 per share, a 3% increase from the 2020 declared dividends. KMI expects to meet or exceed the top end of the range provided last quarter for DCF and Adjusted EBITDA. We currently anticipate generating 2021 DCF of $5.4 billion and Adjusted EBITDA of $7.9 billion. KMI also now expects to end 2021 with a Net Debt-to-Adjusted EBITDA ratio of 4.0.\n<\/p>\n

\nAs of June 30, 2021, we had over $3.9 billion of borrowing capacity under our $4 billion credit facility and over $1.3 billion in cash and cash equivalents. Our acquisition of Stagecoach, which closed July 9, was funded out of this cash. We believe this borrowing capacity, current cash on hand, and our cash from operations are more than adequate to allow us to manage our cash requirements, including maturing debt, through 2021.\n<\/p>\n

Overview of Business Segments<\/span><\/b><\/p>\n

\n\u201cThe Natural Gas Pipelines<\/b> segment\u2019s financial performance was up in the second quarter of 2021 relative to the second quarter of 2020,\u201d said Dang. \u201cThe segment provided higher contributions from the Texas intrastate systems and from the full in-service of the Permian Highway Pipeline, as well as from increased volumes on our Hiland Midstream systems. These were partially offset by lower contributions from our KinderHawk and Eagle Ford gathering and processing assets and from Fayetteville Express Pipeline (FEP).\u201d\n<\/p>\n

\nNatural gas transport volumes were up 4% compared to the second quarter of 2020, with the Permian Highway Pipeline going into service; increased volumes on Tennessee Gas Pipeline (TGP) due primarily to increased deliveries to LNG, power plant and Mexico customers; on the Texas intrastate systems due to increased Gulf Coast demand from industrial and LNG customers; and, on Elba Express due to increased deliveries to Elba Island. These increases were partially offset by declines on Colorado Interstate Gas Pipeline due to continued declining production in the Rockies basin and on FEP due to contract expirations. Natural gas gathering volumes were down 12% from the second quarter of 2020 across many of our systems, most notably on our KinderHawk and Eagle Ford assets.\n<\/p>\n

\n\u201cContributions from the Products Pipelines<\/b> segment were well up compared to the second quarter of 2020 as demand recovery intensified with the opening up of the country,\u201d Dang said. \u201cCrude and condensate pipeline volumes were up 6% and total refined products volumes were up 37% compared to the second quarter of 2020. Gasoline volumes were themselves above the comparable period last year by 37% and diesel volumes were up by 13%. Jet volumes are rebounding nicely, up 129% versus the second quarter of 2020. Compared to pre-pandemic levels, using the second quarter of 2019 as a reference point, road fuels (gasoline and diesel) were essentially flat, while jet fuel was about 26% lower. All refined products volumes saw significant recovery versus the first quarter of 2021, with jet fuel up 28%, gasoline up 17%, and diesel up 10% versus the prior quarter.\n<\/p>\n

\n\u201cTerminals<\/b> segment earnings were up compared to the second quarter of 2020. Volume across our liquids network continues to improve and is approaching pre-pandemic levels. Corresponding increases in variable throughput and ancillary service fees more than offset a normalization in tank utilization to historical levels and an elevated number of tanks temporarily off-lease for routine inspection and maintenance. Our Jones Act tankers experienced a decline in fleet utilization and average charter rates during the quarter compared to the prior year period, despite the ongoing economic recovery, as charter activity tends to lag underlying supply and demand fundamentals,\u201d said Dang. \u201cOur bulk business continued to improve in the quarter with strong commodity pricing driving increased steel and export coal volumes compared to the second quarter of 2020.\n<\/p>\n

\n\u201cCO2<\/sub><\/b> segment earnings were down compared to the second quarter of 2020 due to lower CO2<\/sub> sales and crude volumes along with increased well work costs, partially offset by higher realized crude and NGL prices. Our realized weighted average crude oil price for the quarter was up 4% at $52.50 per barrel compared to $50.31 per barrel for the second quarter of 2020. While NGL volumes were up only 1% versus the second quarter of 2020, our weighted average NGL price for the quarter was $22.58 per barrel, up 43% from the second quarter of 2020,\u201d said Dang. \u201cSecond quarter 2021 combined oil production across all of our fields was down 9% compared to the same period in 2020 on a net to KMI basis. CO2<\/sub> sales volumes were also down 10% on a net to KMI basis. However, crude and CO2<\/sub> sales volumes, as well as realized crude prices, are nicely above plan. SACROC oil production is expected to exceed plan for the year because of reduced base decline rates and improved performance on recent projects. Additionally, Wink Pipeline achieved record throughput during the quarter due to continued strong refinery demand.\u201d\n<\/p>\n

Other News<\/span><\/b><\/p>\n

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