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Key takeaways from the call:
Kinder Morgan’s robust financial performance was underscored by increases in its natural gas, products, and terminals segments. The company repurchased $73 million in shares this quarter and has returned $17.1 billion to shareholders over the past eight years. Despite these substantial returns, the target leverage ratio remains around 4.5 times, even after $472 million of unbudgeted share repurchases during the year.
In terms of revenue, the company reported $3.9 billion for the quarter, a decrease from $5.2 billion in the third quarter of 2022, primarily due to lower commodity prices. However, the natural gas and terminals businesses are performing better than expected, offsetting some of the revenue decline.
The company ended the third quarter with $30.9 billion of net debt, marking a decrease of $9 million since the beginning of the year. The focus, moving forward, is on maintaining the target leverage ratio and prioritizing projects with attractive returns over share repurchases.
Looking ahead, Kinder Morgan sees opportunities for growth in the LNG market, particularly in Texas and Louisiana, as well as the Southeast, Mexico, and the West Coast. The company’s competitive advantage lies in its extensive network, on-system storage, balancing capabilities, and nitrogen aggregation. The company also expressed interest in acquisitions focused on fee-based energy infrastructure assets that are accretive to DCF per share and offer attractive returns.
Overall, Kinder Morgan (NYSE:KMI) remains poised to capitalize on the projected growth in natural gas and LNG feedgas demand, leveraging its robust pipeline network and solid financial position.
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