Kinder Morgan Increases Quarterly Dividend to $0.51 Per Share, up 16%
KMI Remains on Track to Meet its Full-Year Dividend Target of $2.00
Per Share with Substantial Excess Cash Coverage
Kinder Morgan, Inc. (NYSE: KMI) today announced that its board of
directors approved an increase in its quarterly cash dividend to $0.51
($2.04 annualized) payable on Nov. 13, 2015, to shareholders of record
as of the close of business on Nov. 2, 2015. This represents a 16
percent increase over the third quarter 2014 dividend of $0.44 per share
($1.76 annualized) and is up from $0.49 per share ($1.96 annualized) for
the second quarter of 2015. This is KMI’s 15th quarterly dividend raise
since it went public in February 2011.
"We are pleased with KMI's steady third quarter results that cover our
16 percent dividend increase to $0.51 per share. We remain on track to
meet our full-year dividend target of $2.00 per share with substantial
excess cash coverage despite continued challenging conditions in the
energy sector," said Executive Chairman Richard D. Kinder. "While we are
largely insulated from commodity price impacts due to our predominately
take-or-pay supported cash flows, we are not totally immune.
"As a company, we remain focused on our goals to continue to return cash
to our shareholders in increasing amounts, to maintain our investment
grade ratings and leverage targets while funding our business in the
most efficient and economical way possible. We believe an appropriate
response to the challenging current equity markets is to identify
alternative funding sources that help us meet our goals and have a lower
expected long-term cost of capital than our common equity. We have
identified alternative sources and have selected one of these to pursue,
as appropriate, to meet our equity funding requirements for the balance
of 2015 and for the first half of 2016. This would eliminate our need to
access the common equity markets through mid-next year. Additionally,
while we are at the beginning of our budget process for 2016, we
currently expect to increase our declared dividend for 2016 by 6 to 10
percent over the 2015 declared dividend of $2.00 per share. We expect
this range will provide the flexibility for us to meet our dividend and
have excess cash coverage."
President and CEO Steve Kean said, “We produced distributable cash flow
before certain items of $0.51 per share for the third quarter resulting
in flat coverage for the quarter and total excess coverage of $228
million for the first nine months of the year. Our five business
segments produced $1.839 billion in segment earnings before DD&A and
certain items, down 1 percent from the third quarter of 2014, primarily
driven by a decline in our CO2 segment partially offset by
increases in our Products Pipelines and Terminals segments.
"Our current project backlog of expansion and joint venture investments
is $21.3 billion. Since the second quarter earnings release, we have
placed nearly $400 million of completed projects into service, removed
approximately $1.0 billion in projects (primarily in the CO2
segment as a result of CO2 enhanced oil recovery as well as
additional source and transportation projects being delayed beyond the
time horizon of our five-year backlog due to lower commodity prices) and
added approximately $700 million driven by new projects. Projects in the
backlog have a high certainty of completion and drive future growth at
the company across all of our business segments.”
KMI reported third quarter distributable cash flow before certain items
of $1.129 billion versus $435 million for the comparable period in 2014.
This increase is primarily attributable to the KMI merger transactions
completed in November 2014. Distributable cash flow per share before
certain items was $0.51 compared to $0.42 for the third quarter last
year. Third quarter net income before certain items was $348
million compared to $537 million for the same period in 2014. The
decrease in net income before certain items was driven by higher DD&A
expense and interest expense. Certain items after tax in the third
quarter totaled a net loss of $165 million driven largely by a non-cash
pre-tax impairment charge related to the Goldsmith field in our CO2 segment
compared to a net gain of $242 million for the same period last year.
Net income after certain items was $183 million compared to $779 million
for the third quarter last year.
For the first nine months of the year, KMI reported distributable cash
flow before certain items of $3.466 billion versus $1.340 billion for
the comparable period in 2014, due primarily to the KMI merger
transactions completed in November 2014. Distributable cash flow per
share before certain items for the first nine months of the year was
$1.58 compared to $1.29 for the same period last year. Net income before
certain items was $1.158 billion compared to $1.676 billion for the
first three quarters of 2014. The decrease in net income before certain
items was driven by higher DD&A expense, book taxes and interest
expense. Certain items after tax for the first nine months of the year
totaled a net loss of $214 million compared to a net gain of $201
million for the same period last year. For the first nine months of the
year, net income was $944 million compared to $1.877 billion for the
same period last year.
Overview of Business Segments
The Natural Gas Pipelines business produced third quarter segment
earnings before DD&A and certain items of $975 million, as compared to
$978 million for the same period last year. Natural Gas Pipelines is on
track to slightly exceed its published annual budget of 1 percent growth.
“Growth in this segment compared to the third quarter last year was led
by contributions from the Hiland acquisition and improved performance on
the El Paso Natural Gas pipeline (EPNG) driven by demand from Mexico,”
Kean said. “Third quarter growth was partially offset by lower commodity
prices affecting certain of our midstream gathering and processing
assets. Earnings were also negatively impacted at Kinder Morgan
Louisiana Pipeline as a result of a 2014 customer contract buyout, at
KinderHawk due to the expiration of a minimum volume contract, and at
Cheyenne Plains pipeline primarily as a result of contract expirations.”
Natural gas transport volumes were up 5 percent compared to the third
quarter last year driven by higher volumes on Texas Intrastate pipelines
due to higher Eagle Ford Shale production and increased deliveries of
gas into Mexico, higher throughput on Tennessee Gas Pipeline (TGP)
resulting from new projects going in service, incremental Utica
production as well as greater power generation demand, and higher volume
on the EPNG pipeline driven by demand from Mexico as well as greater
power generation demand. Throughput on our natural gas pipelines for
power generation was up 15 percent compared to the third quarter of 2014
and up 18 percent through the first nine months of 2015 versus the same
period in 2014.
Natural gas continues to be the fuel of choice for America’s future
energy needs, and industry experts are projecting gas demand increases
of over 40 percent to nearly 110 billion cubic feet per day (Bcf/d) over
the next 10 years. Over the last year and a half, KMI has entered into
new and pending firm transport capacity commitments totaling 9.1 Bcf/d,
including 400 million cubic feet per day (MMcf/d) added this quarter.
KMI pipelines currently move about one-third of the natural gas consumed
in the United States. Future opportunities include the need for more
capacity in the Northeast, greater national demand for gas-fired power
generation in general, liquefied natural gas (LNG) exports and exports
to Mexico. KMI currently has a backlog of natural gas projects of
approximately $9.1 billion.
The CO2 business produced third quarter segment
earnings before DD&A and certain items of $282 million, down from
$363 million for the same period in 2014. The CO2
business is expected to be below its annual budget of an 8 percent
decline from 2014 due to lower commodity prices.
“As expected, lower commodity prices impacted earnings overall, but our
SACROC Unit continued to generate strong production,” Kean said. “SACROC
gross oil production in the third quarter averaged 32.5 thousand barrels
per day (MBbl/d), down 2 percent from the third quarter last year, but
up 6 percent for the nine months of the year compared to the same period
last year and is on track for record annual production. NGL sales
volumes of 21.0 MBbl/d at our Snyder Gas Plant were up 3 percent from
the third quarter last year. In addition, we continued to offset some of
the impact from lower commodity prices by generating cost savings across
our CO2 business. While net CO2 volumes increased
versus the third quarter of 2014, they were below plan for the quarter.
CO2 demand has remained relatively stable, but is not
currently growing due to customer capital constraints related to current
market conditions.”
Combined gross oil production volumes averaged 57.1 MBbl/d for the third
quarter, up slightly from 57.0 MBbl/d in the same period last year. Oil
production net to Kinder Morgan was down 2 percent compared to the same
period last year. SACROC’s third quarter production was slightly below
third quarter 2014 results and plan, and Yates produced solid results
but was slightly below both third quarter 2014 results and plan. Third
quarter Katz and Goldsmith production was above the same period last
year, but well below plan. The average West Texas Intermediate (WTI)
crude oil price for the third quarter was $46.43 per barrel versus
$97.17 for the third quarter of 2014. Kinder Morgan’s 2015 budget
assumed an average WTI crude oil price of approximately $70 per barrel.
The commodity price impact on the CO2 segment in the third
quarter was higher than the sensitivities announced at the beginning of
the year (every $1 per barrel change in the average WTI crude oil price
will impact the CO2 segment’s distributable cash flow by
approximately $7 million) driven by the lower ratio of NGL prices to
crude prices compared to the ratio assumed in our budget.
The Terminals business produced third quarter segment earnings
before DD&A and certain items of $263 million, up 6 percent from $247
million for the same period in 2014. The Terminals business is expected
to be below its published annual budget of 20 percent growth.
“Approximately 21 percent of the growth in the third quarter 2015 was
organic versus the same period in 2014, with the remainder coming from
acquisitions,” Kean said. “The increase in third quarter earnings was
led by strong performance at our liquids terminals, driven by various
expansions across our network including adding incremental storage
capacity at our Edmonton South terminal, as well as contributions from
new operations at our Geismar Methanol terminal, Deer Park Rail terminal
and the Edmonton Rail Terminal, a 50-50 joint venture with Imperial Oil
Ltd. The Jones Act tanker and Vopak terminals acquisitions also
contributed significantly to growth in this segment. Earnings were
impacted by a softening of the domestic steel market and continued
weakness in global coal markets which has led to a decline in coal
export volumes of 50 percent in the third quarter of 2015 versus the
same period last year. However, the coal volume impact on earnings was
partially offset by long-term minimum tonnage commitments with
customers. Weakness in our coal business was also impacted by the
bankruptcy of one of our customers, Alpha Natural Resources. Overall,
our liquids throughput increased 26 percent and our bulk volume declined
17 percent this quarter compared to the third quarter of 2014.”
For the third quarter, Terminals and Products Pipelines combined handled
25.7 million barrels of ethanol, down from 27.9 million barrels for the
same period last year. The decline reflects the company’s previously
announced sale of certain smaller terminal facilities to Watco Companies
in exchange for an incremental equity interest in Watco as well as the
opportunistic conversion of storage from ethanol to gasoline service in
certain markets. KMI currently handles approximately one-third of the
ethanol used in the United States.
The Products Pipelines business produced third quarter segment
earnings before DD&A and certain items of $287 million, up 29 percent
from $222 million for the comparable period in 2014. For the year,
Products Pipelines expects to be slightly below its published annual
budget of 29 percent growth.
“Growth in this segment compared to the third quarter of 2014 was driven
by higher volumes on the Kinder Morgan Crude and Condensate Pipeline
(KMCC), the startup of the first and second phases of the petroleum
condensate processing facility along the Houston Ship Channel,
contributions from the Double H Pipeline, which was part of our Hiland
acquisition, improved performance on our SFPP system driven by greater
refined products throughput and contributions from the Cochin reversal
project,” Kean said.
Total refined products volumes were up 2.5 percent for the third quarter
versus the same period in 2014. Segment diesel and jet fuel volumes were
up 4.7 percent and 6.1 percent compared to the third quarter of 2014,
respectively. NGL volumes increased 63.5 percent from the same period
last year due to completion of the reversal project on Cochin. Crude and
condensate volumes were more than three times higher than the third
quarter last year primarily due to the continued ramp up of volumes on
KMCC and placing the Double H Pipeline in service.
Kinder Morgan Canada produced third quarter segment earnings
before DD&A and certain items of $42 million versus the $50 million it
reported for the same period in 2014. Demand for capacity remains high
on the Trans Mountain pipeline system, with third quarter mainline
throughput into Washington state more than 30 percent higher than the
same period last year. The earnings decline was primarily due to an
unfavorable foreign exchange rate, as the Canadian dollar declined in
value relative to the U.S. dollar by approximately 17 percent since the
third quarter of 2014. Kinder Morgan Canada expects to come in below its
published annual budget of 1 percent growth due to expected continued
weakness in the Canadian dollar.
Other News
Natural Gas Pipelines
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Today, the Texas Intrastate Natural Gas Pipeline Group executed a
contract with the Comisión Federal de Electricidad (CFE), the
state-owned electric utility of Mexico, to provide up to 527,000
dekatherms per day (Dth/d) of firm transportation service to CFE in
support of its growing demand for U.S. natural gas supply. The company
expects to invest approximately $76 million to enhance the
capabilities of the Texas intrastate system, in large part to increase
capacity to make deliveries in the Nueces County area of South Texas.
Service under the contract will begin on June 1, 2016, with volumes
increasing once system enhancements are completed in the third quarter
of 2016.
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TGP plans a full certificate filing in the fourth quarter of 2015 for
its proposed Northeast Energy Direct Project (NED). The KMI board of
directors approved the market path portion of NED last quarter,
subject to receipt of applicable regulatory approvals, including state
public utility commission approvals for our LDC customers. Currently,
the market path portion of the project has commitments of over 550,000
Dth/d. The market path, from Wright, New York, to Dracut,
Massachusetts, and beyond, is scalable up to 1.3 Bcf/d. TGP recently
launched an open season introducing a new firm service, PowerServe,
for electric distribution companies and electric generators in the
northeast, using NED facilities. The open season is anticipated to
close on Oct. 29, 2015. We believe recent favorable actions and
recommendations in New England regulatory proceedings have enhanced
the prospects for this project. Additionally, TGP has executed
agreements totaling 627,000 Dth/d for the supply path portion of the
project. The supply path, from the heart of the Marcellus production
area to Wright, New York, is scalable up to 1.2 Bcf/d. The project has
an expected in-service date of Nov. 1, 2018. Anticipated capital
required for both the market path and the supply path is approximately
$5 billion.
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TGP anticipates a Nov. 1, 2015, in-service date for its proposed Broad
Run Flexibility Project. The Broad Run Expansion and Broad Run
Flexibility projects will move gas north-to-south from a receipt point
in West Virginia to delivery points in Mississippi and Louisiana.
Estimated capital expenditures for both projects are approximately
$797 million. In 2014, Antero Resources was awarded 790,000 Dth/d of
15-year firm capacity. Subject to regulatory approvals, the Broad Run
Expansion project will provide an incremental 200,000 Dth/d of firm
transportation capacity from TGP's Broad Run Lateral in TGP Zone 3 to
mutually agreeable delivery points in TGP Zone 1. The anticipated
in-service date of the Broad Run Expansion project is Nov. 1, 2017.
The Broad Run Flexibility project will provide an additional 590,000
Dth/d of firm transportation capacity on the same capacity path.
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On Oct. 15, 2015, the Federal Energy Regulatory Commission (FERC)
released a notice indicating that the issuance of the Environmental
Assessment for the Elba Liquefaction Project would occur on Feb. 5,
2016, and the final decision deadline for issuance of the FERC
certificate would be on May 5, 2016. Timing for issuance of the FERC
certificate is four to five months later than the company expected.
The company is evaluating potential mitigation strategies and the
resulting in-service schedule for initial deliveries of LNG at the
Elba Island facilities as well as for the pipeline expansion projects
on Elba Express pipeline and Southern Natural Gas pipeline (SNG),
which are associated with the FERC filing for the Elba Liquefaction
Project. KMI’s expected investment in the Elba Island facilities and
the Elba Express and SNG pipeline expansion projects is approximately
$2.1 billion and $309 million, respectively.
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Later this month, TGP expects to file a FERC certificate application
for its proposed $178 million Southwest Louisiana Supply Project
serving the future Cameron LNG export complex at Hackberry, Louisiana.
TGP's project would provide 900,000 Dth/d of long-term capacity to the
LNG complex for customers Mitsubishi and Mitsui via the Cameron
Interstate Pipeline. The LNG complex, which is currently under
construction, received its notice to proceed from the FERC in October
2014 and its FERC certificate in June 2014. TGP proposes to begin
construction of the project facilities in November 2016 and to place
the facilities in service by Feb. 1, 2018.
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On Oct. 9, 2015, TGP submitted a FERC certificate filing for its
proposed Orion project, which would provide 135,000 Dth/d of long-term
expansion capacity for three customers from the Marcellus supply basin
to a TGP interconnection with Columbia Gas Transmission in Pike
County, Pennsylvania. The approximately $141 million project is
expected to be in service June 2018, subject to regulatory approvals.
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On Sept. 10, 2015, Natural Gas Pipeline Company of America (NGPL)
announced an agreement with Corpus Christi Liquefaction, LLC, a
subsidiary of Cheniere Energy, Inc., to provide the Corpus Christi
Liquefaction Project with 385,000 Dth/d of southbound natural gas
transportation capacity on NGPL’s expanded Gulf Coast mainline system
for a 20-year term. NGPL expects to invest approximately $212 million
in facilities to enable it to complete the first phase of its Gulf
Coast Market Expansion Project, which will increase NGPL’s total
southbound capacity from multiple receipt points to existing and
growing markets along the Gulf Coast. Pending regulatory approvals,
the project is expected to be placed fully into service by July 2019.
Kinder Morgan owns a 20 percent interest in and operates NGPL.
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NGPL continues to move forward with its approximately $81 million
Chicago Market Expansion project, which will increase NGPL's capacity
by 238,000 Dth/d and provide transportation service to markets in
proximity to Chicago, Illinois. NGPL has executed binding agreements
with Antero Resources, Nicor Gas, North Shore Gas and Occidental
Energy Marketing for incremental firm transportation service on its
Gulf Coast mainline system with receipts at the Rockies Express
Pipeline interconnection in Moultrie County, Illinois, and deliveries
to points north on NGPL’s pipeline system. The project is expected to
be in service in November 2016 pending regulatory approvals.
CO2
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Construction is about 75 percent complete at Kinder Morgan’s
approximately $311 million Cow Canyon expansion project in
southwestern Colorado. This project adds 200 MMcf/d of CO2 production
capacity.
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Construction has begun on the approximately $214 million northern
portion of the Cortez Pipeline expansion project, which will increase
CO2 transportation capacity from 1.35 Bcf/d to 1.5 Bcf/d.
The Cortez Pipeline transports CO2 from southwestern
Colorado to eastern New Mexico and West Texas for use in enhanced oil
recovery projects. The project is scheduled to be completed in the
first quarter of 2016.
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Production continues to increase at Kinder Morgan's Tall Cotton Field
pilot project in Gaines County, Texas. The approximately $105 million
project is the industry’s first greenfield Residual Oil Zone CO2
project and encompasses 180 acres. The company initiated CO2
injection in Tall Cotton in November 2014, and the field is
demonstrating early stages of CO2 injection response by
producing approximately 300 barrels per day (bpd).
Terminals
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In October 2015, Kinder Morgan announced its plans with BP Products
North America Inc. to acquire 15 refined products terminals and
associated infrastructure in the United States in a transaction valued
at approximately $350 million. Kinder Morgan and BP will form a joint
venture limited liability company (JV) terminal business to own 14 of
the acquired assets, which Kinder Morgan will operate and market on
the JV’s behalf. One terminal will be owned solely by KMI. The
terminals, with approximately 9.5 million barrels of storage, are
pipeline-connected to key refining and processing centers across the
United States and offer extensive truck, vessel, and barge access and
terminal service capabilities. In connection with the transaction, BP
will enter into commercial agreements securing long-term storage and
throughput capacity from the JV, which plans to market additional
capacity to third-party customers. The transaction is expected to
close in the first quarter of 2016.
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In the third quarter of 2015, Kinder Morgan commissioned a new
crude-by-rail destination terminal at its Deer Park Rail Terminal on
the Houston Ship Channel. The unit train facility is capable of
unloading one train per day of a wide range of heavy and light crude
oil grades. The approximately $34 million investment is supported by a
long-term take-or-pay throughput commitment from a large, creditworthy
counterparty.
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On Oct. 17, 2015, the first of five tankers ordered by Kinder Morgan’s
American Petroleum Tanker business was christened at General Dynamics’
NASSCO shipyard in San Diego. Delivery is scheduled for November 2015,
when it will be placed on long-term time charter with an oil major.
The remaining four tankers are slated for delivery between early 2016
and mid-2017 and are also supported by long-term time charters with
major shippers. All of the tankers will be 50,000-deadweight-ton, LNG
conversion-ready product carriers, with a 330,000 barrel cargo
capacity. The construction of these tankers is on schedule and on
budget.
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On Aug. 10, 2015, Kinder Morgan announced a further expansion of its
growing fleet of Jones Act product tankers, executing a definitive
agreement for $568 million with Philly Tankers LLC to take assignment
of contracts for the construction of four, new 50,000-deadweight-ton,
Tier II tankers. The vessels will be constructed at the Aker
Philadelphia Shipyard in Philadelphia. The transaction was
subsequently approved by shareholders of Philly Tankers AS, parent of
Philly Tankers LLC. Each LNG conversion-ready tanker will have a
capacity of 337,000 barrels and will be delivered between November
2016 and November 2017. The first two scheduled for delivery are under
long-term contract to a creditworthy oil company. Contract discussions
for the remaining two tankers are ongoing. The vessels will increase
Kinder Morgan’s Jones Act tanker fleet to 16 ships by late 2017, of
which 14 are under long-term contracts with creditworthy
counterparties.
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Kinder Morgan continues to lead design and planning-permitting
activities for the Base Line Terminal development, a new crude oil
storage facility in Edmonton, Alberta. In March 2015, Kinder Morgan
and Keyera Corp. announced the new 50-50 joint venture terminal and
have entered into long-term, firm take-or-pay agreements with strong,
creditworthy customers to build 4.8 million barrels of crude oil
storage. KMI’s investment in the joint venture terminal is
approximately CAD$372 million for an initial 12-tank build out, with
commissioning expected to begin in the second half of 2017.
Separately, KMI will invest up to an additional CAD$75 million outside
the joint venture for connecting pipelines and related infrastructure
for a total project investment of approximately CAD$447 million.
Following completion of the initial tank build out, Kinder Morgan will
have nearly 12 million barrels of merchant storage in the Edmonton
market.
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Work continues on the Kinder Morgan Export Terminal (KMET) along the
Houston Ship Channel. The approximately $220 million project includes
12 storage tanks with 1.5 million barrels of storage capacity, one
ship dock, one barge dock and cross-channel pipelines to connect with
the Kinder Morgan Galena Park terminal. The terminal is anticipated to
be in service in the first quarter of 2017.
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Work continues at various Kinder Morgan facilities along the Houston
Ship Channel in response to customers’ growing demand for refined
product storage and dock services. Construction began on two new ship
docks on the channel capable of loading ocean going vessels at rates
up to 15,000 barrels per hour. The approximately $66 million project
is supported by firm vessel commitments from existing customers at
Kinder Morgan’s Galena Park and Pasadena terminals. The two docks are
expected to be placed in service in the second and fourth quarters of
2016, respectively.
Products Pipelines
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Kinder Morgan continues to make progress on its outreach, surveying
and permitting activities for the proposed Palmetto Pipeline while the
company awaits the outcome of its appeal of the Department of
Transportation's decision to deny Palmetto's application for a
Certificate of Public Convenience and Necessity. Palmetto will move
gasoline, diesel and ethanol from Louisiana, Mississippi and South
Carolina to points in South Carolina, Georgia and Florida. The
approximately $1 billion project has a design capacity of 167,000 bpd
and will consist of a segment of expansion capacity on the Plantation
pipeline that Palmetto will lease from Plantation Pipe Line Company,
and a new 360-mile pipeline to be built from Belton, South Carolina,
to Jacksonville, Florida. The company anticipates an in-service date
of July 2017.
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Kinder Morgan continues to make progress on its Utopia East pipeline
project, and in September 2015, the company received approval from
FERC on the commercial aspects of the project. The approximately $517
million Utopia East pipeline will have an initial design capacity of
50,000 bpd, all of which is committed to a customer, and the system is
expandable to more than 75,000 bpd. The new pipeline will originate in
Harrison County, Ohio, and connect with Kinder Morgan’s existing
pipeline and facilities in Fulton County, Ohio, transporting ethane
and ethane-propane mixtures eastward to Windsor, Ontario, Canada.
Subject to the receipt of permitting and regulatory approvals, the
project is expected to be in service by early 2018.
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In September 2015, the company extended the binding open season for
its proposed Utica Marcellus Texas Pipeline (UMTP) to Dec. 15, 2015,
in order to continue discussions with interested shippers. The project
is designed to transport propane, butanes, natural gasoline, y-grade
and condensate in batches along the system, with a maximum design
capacity of 430,000 bpd. Products will be transported from the Utica
and Marcellus basins to delivery points along the Texas Gulf Coast,
including connectivity to a Kinder Morgan dock located along the
Houston Ship Channel. The UMTP project involves the abandonment and
conversion of approximately 964 miles of natural gas service on KMI's
existing TGP system, the construction of approximately 200 miles of
new pipeline from Louisiana to Texas, new storage in Ohio and 120
miles of new laterals to provide basin connectivity. The anticipated
in-service date is in the fourth quarter of 2018, pending customer
commitments and regulatory approvals. This project is not in the
current project backlog.
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On Kinder Morgan's Double H Pipeline system, the company completed
construction and placed into service in September 2015 a new
connection to the Sinclair Guernsey Terminal in Wyoming, which will
provide increased connectivity to the local and regional markets near
Guernsey. The 485-mile pipeline system, which transports crude oil
from North Dakota and the Powder River Basin to Guernsey where it
delivers to local markets and interconnects with the Pony Express
Pipeline for further transportation to Cushing, Oklahoma, has an
initial long-haul capacity of approximately 84,000 bpd, with contracts
for approximately 80,000 bpd.
Kinder Morgan Canada
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Kinder Morgan Canada is currently engaged in the process of achieving
approval from the National Energy Board (NEB) for the Trans Mountain
Expansion Project. The NEB decision is now scheduled for May 20, 2016,
which is a four-month delay from the previous schedule. During the
quarter, we also received draft conditions from the NEB. The impact
from the NEB schedule delay on the in-service date for the expansion
will depend on the conditions contained in the final NEB
recommendation. Thirteen companies have signed firm long-term
contracts supporting the project for approximately 708,000 bpd. Kinder
Morgan Canada received approval of the commercial terms related to the
expansion from the NEB in May of 2013. The proposed $5.4 billion
expansion will increase capacity on Trans Mountain from approximately
300,000 to 890,000 bpd. Kinder Morgan Canada continues to engage
extensively with landowners, Aboriginal groups, communities and
stakeholders along the proposed expansion route, and marine
communities. Through some 159 open houses and workshops along the
pipeline and marine corridor and more than 24,000 points of engagement
with Aboriginal communities, Trans Mountain improved and optimized its
planning and mitigation measures to address concerns. To date, 14
community benefits agreements with 19 communities representing 87
percent of the 1,150 km/690 miles of expansion rights-of-way have been
completed.
Financings
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In the third quarter, KMI sold shares valued at approximately $1,275
million under its at-the-market equity distribution program bringing
total equity issuances for the year to $3,884 million. At the end of
the third quarter, KMI had total common shares outstanding of 2,228
million.
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In the third quarter, KMI repurchased approximately 3.7 million KMI
warrants. At the end of the third quarter, KMI had total warrants
outstanding of 293 million.
Kinder Morgan, Inc. (NYSE: KMI) is the largest energy infrastructure
company in North America. It owns an interest in or operates
approximately 84,000 miles of pipelines and 165 terminals. The company’s
pipelines transport natural gas, gasoline, crude oil, CO2 and
other products, and its terminals store petroleum products and
chemicals, and handle bulk materials like coal and petroleum coke.
Kinder Morgan is the largest midstream and third largest energy company
in North America with an enterprise value of approximately $115 billion.
For more information please visit www.kindermorgan.com.
Please join Kinder Morgan at 4:30 p.m. Eastern Time on Wednesday,
Oct. 21, at www.kindermorgan.com
for a LIVE webcast conference call on the company’s third quarter
earnings.
The non-generally accepted accounting principles, or non-GAAP,
financial measures of distributable cash flow before certain items, both
in the aggregate and per share, and segment earnings before
depreciation, depletion, amortization and amortization of excess cost of
equity investments, or DD&A, and certain items, are presented in this
news release.
Distributable cash flow before certain items is a significant metric
used by us and by external users of our financial statements, such as
investors, research analysts, commercial banks and others, to compare
basic cash flows generated by us to the cash dividends we expect to pay
our shareholders on an ongoing basis. Management uses this metric
to evaluate our overall performance. Distributable cash flow
before certain items is also an important non-GAAP financial measure for
our shareholders because it serves as an indicator of our success in
providing a cash return on investment. This financial measure
indicates to investors whether or not we are generating cash flow at a
level that can sustain or support an increase in the quarterly dividends
we are paying. Distributable cash flow before certain items is
also a quantitative measure used in the investment community because the
value of a share of an entity like KMI that pays out a substantial
proportion of its cash flow is generally determined by the dividend
yield (which in turn is based on the amount of cash dividends the
corporation pays to its shareholders as compared to its stock price).
The economic substance behind our use of distributable cash flow
before certain items is to measure and estimate the ability of our
assets to generate cash flows sufficient to pay dividends to our
investors.
We believe the GAAP measure most directly comparable to distributable
cash flow before certain items is net income. A reconciliation of
distributable cash flow before certain items to net income is provided
in this release. Distributable cash flow before certain items per
share is distributable cash flow before certain items divided by average
outstanding shares, including restricted stock awards that participate
in dividends. “Certain items” are items that are required by GAAP
to be reflected in net income, but typically either (1) do not have a
cash impact, for example, asset impairments, or (2) by their nature are
separately identifiable from our normal business operations and in our
view are likely to occur only sporadically, for example certain legal
settlements, hurricane impacts and casualty losses. Management
uses this measure and believes it is important to users of our financial
statements because it believes the measure more effectively reflects our
business’ ongoing cash generation capacity than a similar measure with
the certain items included.
For similar reasons, management uses segment earnings before DD&A and
certain items in its analysis of segment performance and management of
our business. General and administrative expenses are generally
not controllable by our segment operating managers, and therefore, are
not included when we measure business segment operating performance. We
believe segment earnings before DD&A and certain items is a significant
performance metric because it enables us and external users of our
financial statements to better understand the ability of our segments to
generate cash on an ongoing basis. We believe it is useful to
investors because it is a measure that management believes is important
and that our chief operating decision makers use for purposes of making
decisions about allocating resources to our segments and assessing the
segments’ respective performance.
We believe the GAAP measure most directly comparable to segment
earnings before DD&A and certain items is segment earnings before DD&A.
Segment earnings before DD&A and certain items is calculated by
adjusting for the certain items attributable to a segment, which are
specifically identified in the footnotes to the accompanying tables,
from segment earnings before DD&A. Segment earnings before
DD&A as presented in our GAAP financials are included on the first page
of the tables presenting our financial results.
Our non-GAAP measures described above should not be considered
alternatives to GAAP net income or other GAAP measures and have
important limitations as analytical tools. Our computations of
distributable cash flow before certain items, and segment earnings
before DD&A and certain items may differ from similarly titled measures
used by others. You should not consider these non-GAAP measures
in isolation or as substitutes for an analysis of our results as
reported under GAAP. Management compensates for the limitations
of these non-GAAP measures by reviewing our comparable GAAP measures,
understanding the differences between the measures and taking this
information into account in its analysis and its decision making
processes.
Important Information Relating to
Forward-Looking Statements
This news release includes forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995 and
Section 21E of the Securities and Exchange Act of 1934. Generally the
words “expects,” “believes,” anticipates,” “plans,” “will,” “shall,”
“estimates,” and similar expressions identify forward-looking
statements, which are generally not historical in nature.
Forward-looking statements are subject to risks and uncertainties and
are based on the beliefs and assumptions of management, based on
information currently available to them. Although Kinder Morgan believes
that these forward-looking statements are based on reasonable
assumptions, it can give no assurance that any such forward-looking
statements will materialize. Important factors that could cause actual
results to differ materially from those expressed in or implied from
these forward-looking statements include the risks and uncertainties
described in Kinder Morgan’s reports filed with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for the
year-ended December 31, 2014 (under the headings “Risk Factors” and
“Information Regarding Forward-Looking Statements” and elsewhere) and
its subsequent reports, which are available through the SEC’s EDGAR
system at www.sec.gov
and on our website at ir.kindermorgan.com.
Forward-looking statements speak only as of the date they were made, and
except to the extent required by law, Kinder Morgan undertakes no
obligation to update any forward-looking statement because of new
information, future events or other factors. Because of these risks and
uncertainties, readers should not place undue reliance on these
forward-looking statements.
|
Kinder Morgan, Inc. and Subsidiaries
Preliminary Consolidated Statements of Income
(Unaudited)
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
3,707
|
|
|
|
$
|
4,291
|
|
|
|
$
|
10,767
|
|
|
|
$
|
12,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs, expenses and other
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
1,718
|
|
|
|
|
2,199
|
|
|
|
|
4,988
|
|
|
|
|
6,475
|
|
Depreciation, depletion and amortization
|
|
|
|
617
|
|
|
|
|
520
|
|
|
|
|
1,725
|
|
|
|
|
1,518
|
|
General and administrative
|
|
|
|
160
|
|
|
|
|
135
|
|
|
|
|
540
|
|
|
|
|
461
|
|
Taxes, other than income taxes
|
|
|
|
108
|
|
|
|
|
105
|
|
|
|
|
339
|
|
|
|
|
326
|
|
Loss on impairments and disposals of long-lived assets, net
|
|
|
|
385
|
|
|
|
|
-
|
|
|
|
|
489
|
|
|
|
|
3
|
|
Other income, net
|
|
|
|
(2
|
)
|
|
|
|
-
|
|
|
|
|
(5
|
)
|
|
|
|
-
|
|
|
|
|
|
2,986
|
|
|
|
|
2,959
|
|
|
|
|
8,076
|
|
|
|
|
8,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
721
|
|
|
|
|
1,332
|
|
|
|
|
2,691
|
|
|
|
|
3,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from equity investments
|
|
|
|
114
|
|
|
|
|
107
|
|
|
|
|
330
|
|
|
|
|
306
|
|
Loss on impairments of equity investments
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(26
|
)
|
|
|
|
-
|
|
Amortization of excess cost of equity investments
|
|
|
|
(13
|
)
|
|
|
|
(12
|
)
|
|
|
|
(39
|
)
|
|
|
|
(33
|
)
|
Interest, net
|
|
|
|
(540
|
)
|
|
|
|
(432
|
)
|
|
|
|
(1,524
|
)
|
|
|
|
(1,320
|
)
|
Other, net
|
|
|
|
9
|
|
|
|
|
30
|
|
|
|
|
33
|
|
|
|
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
291
|
|
|
|
|
1,025
|
|
|
|
|
1,465
|
|
|
|
|
2,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
(108
|
)
|
|
|
|
(246
|
)
|
|
|
|
(521
|
)
|
|
|
|
(624
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
183
|
|
|
|
|
779
|
|
|
|
|
944
|
|
|
|
|
1,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (income) attributable to noncontrolling interests
|
|
|
|
3
|
|
|
|
|
(450
|
)
|
|
|
|
4
|
|
|
|
|
(977
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to KMI
|
|
|
$
|
186
|
|
|
|
$
|
329
|
|
|
|
$
|
948
|
|
|
|
$
|
900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class P Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Earnings Per Common Share
|
|
|
$
|
0.08
|
|
|
|
$
|
0.32
|
|
|
|
$
|
0.43
|
|
|
|
$
|
0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted Average Shares Outstanding (1)
|
|
|
|
2,203
|
|
|
|
|
1,028
|
|
|
|
|
2,173
|
|
|
|
|
1,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Weighted Average Shares Outstanding (1)
|
|
|
|
2,203
|
|
|
|
|
1,028
|
|
|
|
|
2,181
|
|
|
|
|
1,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Declared dividend per common share
|
|
|
$
|
0.51
|
|
|
|
$
|
0.44
|
|
|
|
$
|
1.48
|
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBDA
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Pipelines
|
|
|
$
|
993
|
|
|
|
$
|
1,182
|
|
|
|
$
|
2,936
|
|
|
|
$
|
3,207
|
|
CO2
|
|
|
|
29
|
|
|
|
|
388
|
|
|
|
|
605
|
|
|
|
|
1,083
|
|
Terminals
|
|
|
|
249
|
|
|
|
|
249
|
|
|
|
|
798
|
|
|
|
|
692
|
|
Products Pipelines
|
|
|
|
288
|
|
|
|
|
222
|
|
|
|
|
811
|
|
|
|
|
632
|
|
Kinder Morgan Canada
|
|
|
|
42
|
|
|
|
|
50
|
|
|
|
|
120
|
|
|
|
|
138
|
|
Other
|
|
|
|
(9
|
)
|
|
|
|
6
|
|
|
|
|
(55
|
)
|
|
|
|
13
|
|
Total Segment EBDA
|
|
|
$
|
1,592
|
|
|
|
$
|
2,097
|
|
|
|
$
|
5,215
|
|
|
|
$
|
5,765
|
|
|
Notes
|
(1)
|
|
For all periods presented in 2015 and 2014, outstanding KMI
convertible preferred securities were antidilutive. For the three
months ended September 30, 2015 and 2014 and for the nine months
ended September 30, 2014 outstanding KMI warrants were also
antidilutive.
|
|
|
|
|
|
|
|
Kinder Morgan, Inc. and Subsidiaries
Preliminary Earnings Contribution by Business Segment
(Unaudited)
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
|
2014(17)
|
|
|
2015
|
|
|
2014(17)
|
Segment earnings before DD&A and amort. of excess investments (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Pipelines
|
|
|
$
|
975
|
|
|
|
$
|
978
|
|
|
|
$
|
3,027
|
|
|
|
$
|
3,012
|
|
CO2
|
|
|
|
282
|
|
|
|
|
363
|
|
|
|
|
849
|
|
|
|
|
1,089
|
|
Terminals
|
|
|
|
263
|
|
|
|
|
247
|
|
|
|
|
798
|
|
|
|
|
702
|
|
Product Pipelines
|
|
|
|
287
|
|
|
|
|
222
|
|
|
|
|
807
|
|
|
|
|
635
|
|
Kinder Morgan Canada
|
|
|
|
42
|
|
|
|
|
50
|
|
|
|
|
120
|
|
|
|
|
138
|
|
Other
|
|
|
|
(10
|
)
|
|
|
|
(4
|
)
|
|
|
|
(23
|
)
|
|
|
|
(9
|
)
|
Subtotal
|
|
|
|
1,839
|
|
|
|
|
1,856
|
|
|
|
|
5,578
|
|
|
|
|
5,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DD&A and amortization of excess investments
|
|
|
|
(630
|
)
|
|
|
|
(532
|
)
|
|
|
|
(1,764
|
)
|
|
|
|
(1,551
|
)
|
General and administrative (1) (2)
|
|
|
|
(152
|
)
|
|
|
|
(141
|
)
|
|
|
|
(485
|
)
|
|
|
|
(452
|
)
|
Interest, net (1) (3)
|
|
|
|
(524
|
)
|
|
|
|
(444
|
)
|
|
|
|
(1,565
|
)
|
|
|
|
(1,338
|
)
|
Subtotal
|
|
|
|
533
|
|
|
|
|
739
|
|
|
|
|
1,764
|
|
|
|
|
2,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book taxes (4)
|
|
|
|
(185
|
)
|
|
|
|
(202
|
)
|
|
|
|
(606
|
)
|
|
|
|
(550
|
)
|
Certain items
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition expense (5)
|
|
|
|
(2
|
)
|
|
|
|
-
|
|
|
|
|
(14
|
)
|
|
|
|
(26
|
)
|
Pension plan net benefit
|
|
|
|
5
|
|
|
|
|
11
|
|
|
|
|
28
|
|
|
|
|
29
|
|
Fair value amortization
|
|
|
|
24
|
|
|
|
|
18
|
|
|
|
|
72
|
|
|
|
|
49
|
|
Contract early termination revenue
|
|
|
|
-
|
|
|
|
|
198
|
|
|
|
|
-
|
|
|
|
|
198
|
|
Legal and environmental reserves (6)
|
|
|
|
(1
|
)
|
|
|
|
(4
|
)
|
|
|
|
(78
|
)
|
|
|
|
(30
|
)
|
Mark to market and ineffectiveness (7)
|
|
|
|
118
|
|
|
|
|
33
|
|
|
|
|
162
|
|
|
|
|
2
|
|
Gain/Loss on asset disposals/impairments, net of insurance
|
|
|
|
(387
|
)
|
|
|
|
(6
|
)
|
|
|
|
(516
|
)
|
|
|
|
(19
|
)
|
Other
|
|
|
|
(17
|
)
|
|
|
|
19
|
|
|
|
|
(4
|
)
|
|
|
|
26
|
|
Subtotal certain items before tax
|
|
|
|
(260
|
)
|
|
|
|
269
|
|
|
|
|
(350
|
)
|
|
|
|
229
|
|
Book tax certain items
|
|
|
|
95
|
|
|
|
|
(27
|
)
|
|
|
|
136
|
|
|
|
|
(28
|
)
|
Total certain items
|
|
|
|
(165
|
)
|
|
|
|
242
|
|
|
|
|
(214
|
)
|
|
|
|
201
|
|
Net income
|
|
|
$
|
183
|
|
|
|
$
|
779
|
|
|
|
$
|
944
|
|
|
|
$
|
1,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income before certain items
|
|
|
$
|
348
|
|
|
|
$
|
537
|
|
|
|
$
|
1,158
|
|
|
|
$
|
1,676
|
|
Net income attributable to 3rd party noncontrolling interests (8)
|
|
|
|
(3
|
)
|
|
|
|
(4
|
)
|
|
|
|
(16
|
)
|
|
|
|
(7
|
)
|
Depreciation, depletion and amortization (9)
|
|
|
|
708
|
|
|
|
|
608
|
|
|
|
|
2,004
|
|
|
|
|
1,780
|
|
Book taxes (10)
|
|
|
|
224
|
|
|
|
|
240
|
|
|
|
|
713
|
|
|
|
|
655
|
|
Cash taxes (11)
|
|
|
|
(3
|
)
|
|
|
|
(133
|
)
|
|
|
|
(19
|
)
|
|
|
|
(437
|
)
|
Other items (12)
|
|
|
|
7
|
|
|
|
|
12
|
|
|
|
|
23
|
|
|
|
|
26
|
|
Sustaining capital expenditures (13)
|
|
|
|
(152
|
)
|
|
|
|
(144
|
)
|
|
|
|
(397
|
)
|
|
|
|
(353
|
)
|
MLP declared distributions (14)
|
|
|
|
-
|
|
|
|
|
(681
|
)
|
|
|
|
-
|
|
|
|
|
(2,000
|
)
|
DCF before certain items
|
|
|
$
|
1,129
|
|
|
|
$
|
435
|
|
|
|
$
|
3,466
|
|
|
|
$
|
1,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding for Dividends (15)
|
|
|
|
2,210
|
|
|
|
|
1,036
|
|
|
|
|
2,189
|
|
|
|
|
1,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DCF per share before certain items
|
|
|
$
|
0.51
|
|
|
|
$
|
0.42
|
|
|
|
$
|
1.58
|
|
|
|
$
|
1.29
|
|
Declared dividend per common share
|
|
|
$
|
0.51
|
|
|
|
$
|
0.44
|
|
|
|
$
|
1.48
|
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (16)
|
|
|
$
|
1,803
|
|
|
|
$
|
1,825
|
|
|
|
$
|
5,425
|
|
|
|
$
|
5,442
|
|
|
Notes ($ million)
|
(1)
|
|
Excludes certain items:
|
|
|
3Q 2015 - Natural Gas Pipelines $18, CO2 $(253), Terminals $(14),
Products Pipelines $1, Other $1, general and administrative $2,
interest expense $(15).
|
|
|
3Q 2014 - Natural Gas Pipelines $204, CO2 $25, Terminals $2, Other
$10, general and administrative $15, interest expense $13.
|
|
|
YTD 2015 - Natural Gas Pipelines $(91), CO2 $(244), Products
Pipelines $4, Other $(32), general and administrative $(27),
interest expense $40.
|
|
|
YTD 2014 - Natural Gas Pipelines $195, CO2 $(6), Terminals $(10),
Products Pipelines $(3), Other $22, general and administrative
$18, interest expense $13.
|
(2)
|
|
General and administrative expense is net of management fee
revenues from an equity partner:
|
|
|
3Q 2015 - $(10)
|
|
|
3Q 2014 - $(9)
|
|
|
YTD 2015 - $(28)
|
|
|
YTD 2014 $(27)
|
(3)
|
|
Interest expense excludes interest income that is allocable to the
segments:
|
|
|
3Q 2015 - Products Pipelines $1, Other $(2).
|
|
|
3Q 2014 - Other $(1).
|
|
|
YTD 2015 - Products Pipelines $2, Other $(1).
|
|
|
YTD 2014 - Products Pipelines $1, Other $4.
|
(4)
|
|
Book tax expense excludes book tax certain items. Also excludes
income tax that is allocated to the segments:
|
|
|
3Q 2015 - Natural Gas Pipelines $(1), CO2 $(1), Terminals $(8),
Products Pipelines $(3), Kinder Morgan Canada $(5).
|
|
|
3Q 2014 - Natural Gas Pipelines $(2), CO2 $(2), Terminals $(9),
Kinder Morgan Canada $(4).
|
|
|
YTD 2015 - Natural Gas Pipelines $(5), CO2 $(3), Terminals $(21),
Products Pipelines $(7), Kinder Morgan Canada $(15).
|
|
|
YTD 2014 - Natural Gas Pipelines $(9), CO2 $(6), Terminals $(19),
Products Pipelines $(1), Kinder Morgan Canada $(11).
|
(5)
|
|
Acquisition expense related to closed acquisitions.
|
(6)
|
|
Legal reserve adjustments related to certain litigation and
environmental matters.
|
(7)
|
|
Mark to market gain or loss is reflected in segment earnings before
DD&A at time of physical transaction.
|
(8)
|
|
Represents net income allocated to third-party ownership interests
in consolidated subsidiaries (i.e. for prior period, excludes
noncontrolling interests associated with our former MLPs). Excludes
noncontrolling interests of $6 in 3Q 2015 and $20 in YTD 2015
related to impairments included as certain items.
|
(9)
|
|
Includes KMI's share of certain equity investees' DD&A:
|
|
|
3Q 2015 - $78
|
|
|
3Q 2014 - $76
|
|
|
YTD 2015 - $240
|
|
|
YTD 2014 - $229
|
(10)
|
|
Excludes book tax certain items and includes income tax allocated to
the segments. Also, includes KMI's share of taxable equity
investees' book tax expense:
|
|
|
3Q 2015 - $21
|
|
|
3Q 2014 - $21
|
|
|
YTD 2015 - $56
|
|
|
YTD 2014 - $59
|
(11)
|
|
Includes KMI's share of taxable equity investees' cash taxes:
|
|
|
3Q 2015 - $(2)
|
|
|
3Q 2014 - $(4)
|
|
|
YTD 2015 - $(8)
|
|
|
YTD 2014 - $(18)
|
(12)
|
|
For 2015, consists primarily of non-cash compensation associated
with our restricted stock program. The restricted stock awards
related to the program are included in our weighted average shares
outstanding for dividends. For 2014 periods, consists primarily of
excess coverage at our former MLPs (i.e. the amount by which
distributable cash flow exceeded their declared distribution).
|
(13)
|
|
Includes KMI's share of certain equity investees' sustaining capital
expenditures (the same equity investees for which we add back DD&A):
|
|
|
3Q 2015 - $(16)
|
|
|
3Q 2014 - $(11)
|
|
|
YTD 2015 - $(50)
|
|
|
YTD 2014 - $(36)
|
(14)
|
|
Represents distributions to KMP and EPB limited partner units
formerly owned by the public. Not applicable after 3Q 2014.
|
(15)
|
|
Includes restricted stock awards that participate in dividends and
dilutive effect of warrants.
|
(16)
|
|
EBITDA is net income before certain items plus interest expense,
DD&A (including KMI's share of certain equity investees' DD&A), and
book taxes (including income tax allocated to the segments and KMI’s
share of certain equity investees’ book tax) less net income before
certain items attributable to 3rd party noncontrolling interests,
with any difference due to rounding.
|
(17)
|
|
Certain amounts have been reclassified to conform to the current
presentation.
|
|
Volume Highlights
(historical pro forma for acquired assets)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
Natural Gas Pipelines
|
|
|
|
|
|
|
|
|
|
|
Transport Volumes (BBtu/d) (1) (2)
|
|
|
28,580
|
|
|
27,250
|
|
|
|
28,230
|
|
|
26,891
|
|
Sales Volumes (BBtu/d) (3)
|
|
|
2,445
|
|
|
2,446
|
|
|
|
2,416
|
|
|
2,303
|
|
Gas Gathering Volumes (BBtu/d) (2) (4)
|
|
|
3,541
|
|
|
3,508
|
|
|
|
3,554
|
|
|
3,354
|
|
Crude/Condensate Gathering Volumes (MBbl/d) (2) (5)
|
|
|
343
|
|
|
321
|
|
|
|
340
|
|
|
282
|
|
|
|
|
|
|
|
|
|
|
|
|
CO2
|
|
|
|
|
|
|
|
|
|
|
Southwest Colorado Production - Gross (Bcf/d) (6)
|
|
|
1.20
|
|
|
1.21
|
|
|
|
1.22
|
|
|
1.27
|
|
Southwest Colorado Production - Net (Bcf/d) (6)
|
|
|
0.60
|
|
|
0.51
|
|
|
|
0.58
|
|
|
0.54
|
|
Sacroc Oil Production - Gross (MBbl/d) (7)
|
|
|
32.49
|
|
|
33.13
|
|
|
|
34.44
|
|
|
32.35
|
|
Sacroc Oil Production - Net (MBbl/d) (8)
|
|
|
27.07
|
|
|
27.59
|
|
|
|
28.69
|
|
|
26.94
|
|
Yates Oil Production - Gross (MBbl/d) (7)
|
|
|
18.89
|
|
|
19.23
|
|
|
|
18.94
|
|
|
19.48
|
|
Yates Oil Production - Net (MBbl/d) (8)
|
|
|
7.60
|
|
|
8.72
|
|
|
|
8.20
|
|
|
8.64
|
|
Katz Oil Production - Gross (MBbl/d) (7)
|
|
|
4.10
|
|
|
3.42
|
|
|
|
4.03
|
|
|
3.58
|
|
Katz Oil Production - Net (MBbl/d) (8)
|
|
|
3.40
|
|
|
2.85
|
|
|
|
3.35
|
|
|
2.98
|
|
Goldsmith Oil Production - Gross (MBbl/d) (7)
|
|
|
1.64
|
|
|
1.25
|
|
|
|
1.48
|
|
|
1.25
|
|
Goldsmith Oil Production - Net (MBbl/d) (8)
|
|
|
1.41
|
|
|
1.08
|
|
|
|
1.28
|
|
|
1.08
|
|
NGL Sales Volumes (MBbl/d) (9)
|
|
|
10.51
|
|
|
10.32
|
|
|
|
10.33
|
|
|
10.06
|
|
Realized Weighted Average Oil Price per Bbl (10) (11)
|
|
|
$
|
74.18
|
|
|
$
|
87.59
|
|
|
|
$
|
73.19
|
|
|
$
|
89.40
|
|
Realized Weighted Average NGL Price per Bbl (11)
|
|
|
$
|
16.29
|
|
|
$
|
43.57
|
|
|
|
$
|
18.96
|
|
|
$
|
46.18
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminals
|
|
|
|
|
|
|
|
|
|
|
Liquids Leasable Capacity (MMBbl)
|
|
|
81.3
|
|
|
75.6
|
|
|
|
81.3
|
|
|
75.6
|
|
Liquids Utilization %
|
|
|
93.4
|
%
|
|
94.4
|
%
|
|
|
93.4
|
%
|
|
94.4
|
%
|
Bulk Transload Tonnage (MMtons) (12)
|
|
|
16.9
|
|
|
20.4
|
|
|
|
48.9
|
|
|
60.3
|
|
Ethanol (MMBbl)
|
|
|
15.0
|
|
|
17.1
|
|
|
|
47.3
|
|
|
49.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Products Pipelines
|
|
|
|
|
|
|
|
|
|
|
Pacific, Calnev, and CFPL (MMBbl)
|
|
|
|
|
|
|
|
|
|
|
Gasoline (13)
|
|
|
74.1
|
|
|
71.9
|
|
|
|
216.0
|
|
|
207.0
|
|
Diesel
|
|
|
28.5
|
|
|
28.0
|
|
|
|
80.8
|
|
|
79.8
|
|
Jet Fuel
|
|
|
23.2
|
|
|
22.1
|
|
|
|
67.0
|
|
|
65.8
|
|
Sub-Total Refined Product Volumes - excl. Plantation and Parkway
|
|
|
125.8
|
|
|
122.0
|
|
|
|
363.8
|
|
|
352.6
|
|
Plantation (MMBbl) (14)
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
|
19.1
|
|
|
20.8
|
|
|
|
59.5
|
|
|
59.7
|
|
Diesel
|
|
|
5.6
|
|
|
4.8
|
|
|
|
15.9
|
|
|
15.3
|
|
Jet Fuel
|
|
|
3.5
|
|
|
3.2
|
|
|
|
10.8
|
|
|
9.9
|
|
Sub-Total Refined Product Volumes - Plantation
|
|
|
28.2
|
|
|
28.8
|
|
|
|
86.2
|
|
|
84.9
|
|
Parkway (MMBbl) (14)
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
|
2.1
|
|
|
1.8
|
|
|
|
6.1
|
|
|
3.9
|
|
Diesel
|
|
|
0.7
|
|
|
0.6
|
|
|
|
2.0
|
|
|
1.6
|
|
Jet Fuel
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
Sub-Total Refined Product Volumes - Parkway
|
|
|
2.8
|
|
|
2.4
|
|
|
|
8.1
|
|
|
5.5
|
|
Total (MMBbl)
|
|
|
|
|
|
|
|
|
|
|
Gasoline (13)
|
|
|
95.3
|
|
|
94.5
|
|
|
|
281.6
|
|
|
270.6
|
|
Diesel
|
|
|
34.8
|
|
|
33.4
|
|
|
|
98.7
|
|
|
96.7
|
|
Jet Fuel
|
|
|
26.7
|
|
|
25.3
|
|
|
|
77.8
|
|
|
75.7
|
|
Total Refined Product Volumes
|
|
|
156.8
|
|
|
153.2
|
|
|
|
458.1
|
|
|
443.0
|
|
NGLs (MMBbl) (15)
|
|
|
10.0
|
|
|
6.1
|
|
|
|
29.4
|
|
|
16.1
|
|
Crude and Condensate (MMBbl) (16)
|
|
|
27.3
|
|
|
8.9
|
|
|
|
70.9
|
|
|
19.5
|
|
Total Delivery Volumes (MMBbl)
|
|
|
194.1
|
|
|
168.2
|
|
|
|
558.4
|
|
|
478.6
|
|
Ethanol (MMBbl) (17)
|
|
|
10.7
|
|
|
10.8
|
|
|
|
31.1
|
|
|
30.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Trans Mountain (MMBbls - mainline throughput)
|
|
|
29.5
|
|
|
27.6
|
|
|
|
86.9
|
|
|
79.5
|
|
|
|
|
(1)
|
|
Includes Texas Intrastates, Copano South Texas, KMNTP, Monterrey,
TransColorado, MEP, KMLA, FEP, TGP, EPNG, CIG, WIC, Cheyenne Plains,
SNG, Elba Express, Ruby, Sierrita, NGPL, and Citrus pipeline
volumes. Joint Venture throughput reported at KMI share.
|
(2)
|
|
Volumes for acquired pipelines are included for all periods.
|
(3)
|
|
Includes Texas Intrastates and KMNTP.
|
(4)
|
|
Includes Copano Oklahoma, Copano South Texas, Eagle Ford Gathering,
Copano, North Texas, Altamont, KinderHawk, Camino Real, Endeavor,
Bighorn, Webb/Duval Gatherers, Fort Union, EagleHawk, Red Cedar, and
Hiland Midstream throughput. Joint Venture throughput reported at
KMI share.
|
(5)
|
|
Includes Hiland Midstream, EagleHawk, and Camino Real. Joint Venture
throughput reported at KMI share.
|
(6)
|
|
Includes McElmo Dome and Doe Canyon sales volumes.
|
(7)
|
|
Represents 100% production from the field.
|
(8)
|
|
Represents KMI's net share of the production from the field.
|
(9)
|
|
Net to KMI.
|
(10)
|
|
Includes all KMI crude oil properties.
|
(11)
|
|
Hedge gains/losses for Oil and NGLs are included with Crude Oil.
|
(12)
|
|
Includes KMI's share of Joint Venture tonnage.
|
(13)
|
|
Gasoline volumes include ethanol pipeline volumes.
|
(14)
|
|
Plantation and Parkway reported at KMI share.
|
(15)
|
|
Includes Cochin and Cypress (KMI share).
|
(16)
|
|
Includes KMCC, Double Eagle (KMI share), and Double H.
|
(17)
|
|
Total ethanol handled including pipeline volumes included in
gasoline volumes above.
|
|
Kinder Morgan, Inc. and Subsidiaries
Preliminary Consolidated Balance Sheets
(Unaudited)
(In millions)
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
ASSETS
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
179
|
|
|
$
|
315
|
|
Other current assets
|
|
|
2,888
|
|
|
3,437
|
|
Property, plant and equipment, net
|
|
|
40,608
|
|
|
38,564
|
|
Investments
|
|
|
5,943
|
|
|
6,036
|
|
Goodwill
|
|
|
24,952
|
|
|
24,654
|
|
Deferred charges and other assets
|
|
|
11,107
|
|
|
10,043
|
|
TOTAL ASSETS
|
|
|
$
|
85,677
|
|
|
$
|
83,049
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Short-term debt
|
|
|
$
|
3,003
|
|
|
$
|
2,717
|
|
Other current liabilities
|
|
|
3,188
|
|
|
3,645
|
|
Long-term debt
|
|
|
39,675
|
|
|
38,212
|
|
Preferred interest in general partner of KMP
|
|
|
100
|
|
|
100
|
|
Debt fair value adjustments
|
|
|
1,855
|
|
|
1,785
|
|
Other
|
|
|
2,014
|
|
|
2,164
|
|
Total liabilities
|
|
|
49,835
|
|
|
48,623
|
|
|
|
|
|
|
|
Shareholders' Equity
|
|
|
|
|
|
Accumulated other comprehensive loss
|
|
|
(328
|
)
|
|
(17
|
)
|
Other shareholders' equity
|
|
|
35,842
|
|
|
34,093
|
|
Total KMI equity
|
|
|
35,514
|
|
|
34,076
|
|
Noncontrolling interests
|
|
|
328
|
|
|
350
|
|
Total shareholders' equity
|
|
|
35,842
|
|
|
34,426
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
$
|
85,677
|
|
|
$
|
83,049
|
|
|
|
|
|
|
|
Debt, net of cash (1)
|
|
|
$
|
42,459
|
|
|
$
|
40,614
|
|
|
|
|
|
|
|
EBITDA (2)
|
|
|
$
|
7,351
|
|
|
$
|
7,368
|
|
|
|
|
|
|
|
Debt to EBITDA
|
|
|
5.8
|
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5.5
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Notes
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(1)
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Amounts exclude: (i) the preferred interest in general partner of
KMP and (ii) debt fair value adjustments. The foreign exchange
impact on our Euro denominated debt of $40mm is also excluded as of
September 30, 2015, as we have entered into swaps to convert that
debt to US$.
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(2)
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EBITDA is last twelve months, includes add back of our share of
certain equity investees' DD&A and is before certain items.
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View source version on businesswire.com: http://www.businesswire.com/news/home/20151021006297/en/ Copyright Business Wire 2015
Source: Business Wire
(October 21, 2015 - 4:05 PM EDT)
News by QuoteMedia
www.quotemedia.com
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