HOUSTON--(BUSINESS WIRE)--Kinder Morgan, Inc. (NYSE: KMI) today announced that its board of
directors approved a cash dividend of $0.20 per share for the second
quarter ($0.80 annualized) payable on August 15, 2018, to common
stockholders of record as of the close of business on July 31, 2018.
This is a 60 percent increase from last year’s fourth quarter dividend,
and is consistent with the plan KMI announced during the summer of 2017.
Due to $749 million in non-cash impairments taken during the quarter,
KMI is reporting a net loss available to common stockholders of $180
million, despite generating second quarter distributable cash flow (DCF)
of $1.1 billion, an increase of 9 percent over the second quarter of
2017. KMI continued to fund all growth capital through operating cash
flows with no need to access capital markets for that purpose.
“The board is very pleased with the company’s progress during the
quarter. We continue to aggressively de-lever even while maintaining our
planned substantial dividend increase. We ended the quarter with a Net
Debt-to-Adjusted EBITDA ratio of 4.9 times and expect to end the year
below our 2018 budgeted leverage metric of approximately 5.1 times,
excluding any impact from the use of Trans Mountain sale net proceeds,”
said Richard D. Kinder, Executive Chairman. “We also continue to develop
very attractive growth projects that build on our extensive North
American energy infrastructure network. During the second quarter, we
announced the joint development of the Permian Highway Project, which
will provide a greatly needed associated-gas takeaway solution for
producers,” Kinder added.
Chief Executive Officer Steve Kean said, “Two great attributes of this
company are strategically positioned fee-based assets that generate
predictable cash flows, and an inter-connected network that provides our
customers with unrivaled flexibility. This quarter once again
demonstrated both of those attributes. Several business units achieved
strong financial performance in the second quarter and are poised to
continue that success through the remainder of the year. In addition,
during the second quarter we began work on the Gulf Coast Express
Project and announced the joint development of our proposed Permian
Highway Pipeline Project. Both of those projects take advantage of the
unparalleled market access afforded by our existing network.”
Kean continued, “Overall, we had very good commercial and operating
performance, though due to non-cash impairments taken during the quarter
we are showing a second quarter loss per common share of $0.08. We
achieved distributable cash flow (DCF) of $0.50 per common share in the
quarter, representing 9 percent growth over the second quarter of 2017.
This resulted in nearly $700 million of excess DCF above our dividend.”
KMI reported a second quarter net loss available to common stockholders
of $180 million, compared to net income of $337 million for the second
quarter of 2017, and DCF of $1,117 million, up 9 percent from $1,022
million for the comparable period in 2017. The increase in DCF was due
to greater contributions from the Natural Gas, Products Pipelines and
Terminals segments. The net loss available to common stockholders was
driven by a $681 million unfavorable change in total Certain Items
(defined under “Non-GAAP Financial Measures” below) compared to the
second quarter of 2017. Second quarter 2018 Certain Items were
predominantly net losses on impairments, the largest of which was a $600
million impairment of certain gathering and processing assets in
Oklahoma, driven by reduced cash flow estimates as a result of KMI
directing capital to other areas of its portfolio.
For the first six months of 2018, KMI reported net income available to
common stockholders of $305 million, compared to $738 million for the
first six months of 2017, and DCF of $2,364 million, up 6 percent from
$2,237 million for the comparable period in 2017. The increase in DCF
was driven by greater contributions from all KMI business units,
partially offset by greater sustaining capital. Net income available to
common stockholders was degraded by a $715 million unfavorable change in
total Certain Items compared to the first six months of 2017. The first
six months 2018 Certain Items were primarily driven by the impairments
discussed above.
2018 Outlook
For 2018, KMI’s budget contemplates declared dividends of $0.80 per
common share, DCF of approximately $4.57 billion ($2.05 per common
share) and Adjusted EBITDA of approximately $7.5 billion, and we
currently expect to meet or exceed those DCF and Adjusted EBITDA
targets. KMI forecasts to invest $2.4 billion in growth projects during
2018 (excluding growth capital expected to be funded by Kinder Morgan
Canada Limited (KML)), up $200 million from the budget, to be funded
with internally generated cash flow without the need to access capital
markets. KMI also expects to beat its budgeted leverage metric of a
year-end Net Debt-to-Adjusted EBITDA ratio of approximately 5.1 times.
KMI does not provide budgeted net income attributable to common
stockholders (the GAAP financial measure most directly comparable to DCF
and Adjusted EBITDA) due to the impracticality of predicting certain
amounts required by GAAP, such as ineffectiveness on commodity, interest
rate and foreign currency hedges, unrealized gains and losses on
derivatives marked to market, and potential changes in estimates for
certain contingent liabilities.
KMI’s budgeted expectations assumed average annual prices for West Texas
Intermediate (WTI) crude oil of $56.50 per barrel and Henry Hub natural
gas of $3.00 per MMBtu, consistent with forward pricing during the
company’s budget process. The vast majority of cash KMI generates is
fee-based and therefore not directly exposed to commodity prices. The
primary area where KMI has commodity price sensitivity is in its CO2 segment,
with the majority of the segment’s next 12 months of oil and NGL
production hedged to minimize this sensitivity. The segment is currently
hedged for 36,362 barrels per day (Bbl/d) at $58.12/Bbl in 2018; 24,929
Bbl/d at $55.14/Bbl in 2019; 11,400 Bbl/d at $53.41/Bbl in 2020; 6,700
Bbl/d at $52.81/Bbl in 2021; and 1,200 Bbl/d at $53.85/Bbl in 2022.
Overview of Business Segments
“The Natural Gas Pipelines segment had an outstanding quarter.
The segment’s performance for the second quarter of 2018 was 11 percent
higher relative to the second quarter of 2017. The segment benefited
from increased activity across nearly all of our large transmission
intrastate and interstate systems, as well as on our Midstream gathering
and processing assets, primarily Hiland and KinderHawk, due to increased
drilling and production in the Bakken and the Haynesville. The
transmission assets saw higher revenue on El Paso Natural Gas (EPNG), on
the Texas Intrastates (KMTP/Tejas), on Tennessee Gas Pipeline (TGP), on
Natural Gas Pipeline Company of America (NGPL), and on Colorado
Interstate Gas (CIG), due to increased Permian activity, increased power
demand, exports to Mexico, projects placed in service, and increased
production in the DJ Basin,” said KMI President Kim Dang.
Natural gas transport volumes were up 12 percent compared to the second
quarter of 2017, driven by higher throughput on TGP due to power demand
and projects placed in service; on NGPL due to power demand and
deliveries to Mexico; on EPNG due to additional Permian capacity sales;
and on CIG due to growing DJ production and coal-to-gas switching in the
Mid-Continent Region. Natural gas gathering volumes were up 7 percent
from the second quarter of 2017 due primarily to higher volumes on the
KinderHawk and Hiland systems, partially offset by lower volumes on
Copano South Texas. Unseasonably cold weather early in the quarter was
also a factor on several systems.
Natural gas is critical to the American economy and to meeting the
world’s evolving energy needs. Objective analysts project U.S. natural
gas demand, including net exports of liquefied natural gas (LNG) and net
exports to Mexico, will increase by 39 percent to nearly 112 billion
cubic feet per day (Bcf/d) by 2027. Of the natural gas consumed in the
U.S., about 40 percent moves on KMI pipelines. While a substantial
majority of natural gas is consumed in industrial, commercial and
residential heating uses, KMI expects future natural gas infrastructure
opportunities over the next decade will also be driven by greater demand
for gas-fired power generation across the country (expected to increase
by 27 percent), LNG exports (up almost seven-fold), exports to Mexico
(forecast to rise by 51 percent), and continued industrial development,
particularly in the petrochemical industry.
“In the CO
2
segment, second quarter 2018
combined oil production across all of our fields was up 4 percent
compared to the same period in 2017 on a net to KMI basis, primarily due
to increased volumes at our SACROC (up 6 percent) and Tall Cotton assets
(up 35 percent), though Tall Cotton production was below plan. Second
quarter 2018 net NGL sales volumes of 10.1 thousand barrels per day
(MBbl/d) were up 2 percent compared to the same period in 2017. In total
for the first half of 2018, oil production on both a gross and
net-to-KMI basis was just slightly ahead of plan,” Dang said. “The
segment was also helped during the quarter by higher commodity prices,
as NGL prices were up 46 percent and CO2 prices up 11 percent
compared to the same period last year. Our realized weighted average oil
price for the quarter was essentially flat at $58.08 per barrel compared
to $57.80 per barrel for the second quarter of 2017, as higher WTI
prices were largely offset by the Midland-Cushing differential.
“Terminals segment earnings were up 3 percent compared to the
second quarter of 2017. Contributions from our liquids business, which
accounts for approximately 80 percent of the segment total, were up 3
percent driven by storage capacity increases in key hubs along the
Houston Ship Channel and Edmonton, Alberta, as well as the full-period
impact of new-build Jones Act tankers delivered in 2017,” said Dang.
“These contributions were partially offset by the impact of certain
divestitures, lower charter rates on existing Jones Act tankers, and
lower tank utilization at our Staten Island, New York location.
Contributions from our bulk business were up 7 percent compared to the
second quarter of 2017 driven by strong demand at our steel and export
coal handling operations.”
“The Products Pipelines segment contributions were up 10 percent
compared with second quarter 2017 performance with increased
contributions from nearly all of the segment’s assets,” Dang said.
Total refined products volumes were up 3 percent for the second quarter
versus the same period in 2017. Ethanol volumes for the quarter were up
10 percent while crude and condensate pipeline volumes were up 5 percent
compared to the second quarter of 2017.
Kinder Morgan Canada contributions were up 7 percent in the
second quarter of 2018 compared to the second quarter of 2017. The
increase was largely due to higher capitalized equity financing costs
associated with spending on the Trans Mountain Expansion Project (TMEP).
Other News
Natural Gas Pipelines
-
On June 25, Kinder Morgan Texas Pipeline (KMTP), EagleClaw Midstream
Ventures (EagleClaw), and Apache Corporation announced they have
signed a letter of intent for the development of the proposed Permian
Highway Pipeline Project (PHP Project), which will provide an outlet
for increased natural gas production from the Permian Basin to growing
market areas along the Texas Gulf Coast. The approximately $2 billion
PHP Project is designed to transport up to 2.0 Bcf/d of natural gas
through approximately 430 miles of 42-inch pipeline from the Waha,
Texas area to the U.S. Gulf Coast and Mexico markets. Given the level
of producer inquiry, KMI is also evaluating the economic and hydraulic
feasibility of a 48-inch pipeline with increased transportation
capacity. The PHP Project is expected to be in service in late 2020,
subject to the execution of definitive agreements and the receipt of
construction permits. KMTP and EagleClaw will be the initial partners
(50 percent ownership each), and Apache, who has been jointly
developing the proposed project, will have an option to acquire up to
33 percent equity in the project from the initial partners. Apache and
EagleClaw will be significant shippers on the proposed pipeline, with
Apache planning to commit up to 500,000 dekatherms per day (Dth/d).
KMTP will build and operate the pipeline.
-
Construction continues on the nearly $2 billion Elba Liquefaction
Project with a total of six liquefaction units on site. The federally
approved project at the existing Southern LNG Company facility at Elba
Island near Savannah, Georgia, will have a total liquefaction capacity
of approximately 2.5 million tonnes per year of LNG, equivalent to
approximately 350 million cubic feet per day of natural gas. The
project is supported by a 20-year contract with Shell. Initial
in-service is expected in the fourth quarter of 2018 (a delay of one
quarter) with final units coming online by the third quarter of 2019.
Elba Liquefaction Company, L.L.C. (ELC), a KMI joint venture with EIG
Global Energy Partners as a 49 percent partner, will own 10
liquefaction units and other ancillary equipment. Certain other
facilities associated with the project are 100 percent owned by KMI.
Additionally, construction is continuing as planned on the Elba
Express Modification Project, which will add upstream compression
facilities on the Elba Express pipeline to provide feed gas for
liquefaction.
-
Construction work continues on the Gulf Coast Express Pipeline Project
(GCX Project), with the first phase of the Midland Lateral scheduled
for completion on Aug. 1, 2018. The GCX project remains on schedule
for an in-service date of October 2019, pending regulatory approvals.
The approximately $1.75 billion GCX Project is designed to transport
up to 1.98 Bcf/d of natural gas from the Permian Basin to the Agua
Dulce, Texas area, and the project is now fully subscribed under
long-term, binding transportation agreements. KMI will build, operate
and own a 50 percent interest in the GCX Project, and DCP Midstream
and an affiliate of Targa Resources will each hold a 25 percent equity
interest in the project. In addition to transportation agreements,
shipper Apache Corporation has an option to purchase up to a 15
percent equity stake in the project from KMI.
-
Construction is nearly complete on TGP’s 200,000 Dth/d Broad Run
Expansion Project, with an expected in-service date of August 2018.
This project and the already in-service Broad Run Flexibility Project
provide Antero Resources a total of 790,000 Dth/d of 15-year firm
capacity from a receipt point on TGP’s existing Broad Run Lateral in
West Virginia to delivery points in Mississippi and Louisiana.
Estimated capital expenditures for the combined projects total
approximately $800 million.
-
Work continues on the approximately $240 million SNG Fairburn
Expansion Project in Georgia (KMI share: $120 million) with
construction of the Fairburn Lateral nearly complete and construction
of the Fairburn Compressor Station well underway. The project is
designed to provide approximately 340,000 Dth/d of incremental
long-term firm natural gas transportation capacity into the Southeast
market beginning in the fourth quarter of 2018. SNG is a joint venture
equally owned by subsidiaries of KMI and Southern Company.
-
NGPL is proceeding with a second phase of its Gulf Coast Southbound
Expansion Project. The approximately $226 million project (KMI’s
share: $113 million) will increase southbound capacity on NGPL’s Gulf
Coast System to serve Corpus Christi Liquefaction. The project is
supported by a long-term take-or-pay contract and is expected to be
placed into service in mid-2021 pending appropriate regulatory
approvals.
-
On May 18, NGPL filed a Certificate Application with the FERC for its
Sabine Pass Compression Project. The approximately $62 million project
(KMI’s share: $31 million), supported by a long-term take-or-pay
contract, will add compression capacity on NGPL’s Louisiana system in
order to deliver additional natural gas to the Sabine Pass
Liquefaction facility in Cameron Parish. The project will also provide
increased operational flexibility to NGPL’s system, and is expected to
be placed into service in the first quarter of 2020 pending
appropriate regulatory approvals.
-
On April 26, EPNG filed a Certificate Application with the FERC for
its approximately $130 million South Mainline Expansion Project. This
proposed project will increase EPNG’s South Mainline system by
approximately 203,000 Dth/d by modifying and expanding portions of the
system in Texas, New Mexico and Arizona to meet increased demand for
natural gas from Arizona electric utility providers and for
affordable, U.S.-produced natural gas exports to Mexico. The project
will also provide for incremental delivery capacity into California.
Pending regulatory approvals, this project is expected to be placed
into service in the third quarter of 2020.
-
On June 13, FERC issued its Environmental Assessment for the
approximately $56 million Sierrita Gas Pipeline Expansion (KMI share:
$19.6 million). This expansion project will increase the Sierrita
pipeline’s capacity by approximately 323,000 Dth/d to 524,000 Dth/d
and consists of a new 15,900 horsepower compressor station in Pima
County, Arizona. Pending regulatory approvals, the project is expected
to be placed into service in the second quarter of 2020. KMI is a 35
percent owner and the operator of Sierrita Gas Pipeline.
-
On June 29, Gulf LNG Energy LLC and Gulf LNG Pipeline, LLC (GLNG)
received a decision from the arbitration panel that was established to
resolve the dispute between Eni USA Marketing LLC (Eni USA) and GLNG.
The panel’s ruling calls for the termination of Eni USA’s agreement
with GLNG and Eni USA’s payment of compensation to GLNG.
CO
2
-
The SACROC field’s productive life is being extended, as evidenced by
its strong second quarter production, up 6 percent as noted above.
This continued production is due to KMI’s on-going success in using
technological advances to exploit the transition zone.
-
Oil production at KMI’s Tall Cotton facility has increased by 45
percent year-to-date relative to the same period in 2017 after
completing the second phase of its field project. Tall Cotton is the
industry’s first greenfield Residual Oil Zone CO2 project,
marking the first time CO2 has been used for enhanced oil
recovery in a field without a main pay zone.
-
KMI continues to find high-return enhanced oil recovery projects
across its robust portfolio of assets in the current price environment.
Terminals
-
At the Base Line Terminal, a 50-50 joint venture crude oil merchant
storage terminal being developed in Edmonton, Alberta, Canada, by KML
and Keyera Corp., construction of all major facilities is materially
complete. The first six tanks at the 12-tank, 4.8 million barrel
facility, which is fully contracted with long-term, firm take-or-pay
agreements with creditworthy customers, were placed into service in
the first quarter of 2018. Four of the remaining tanks are expected to
be placed into service in the third quarter of 2018 with the final two
tanks in service in the fourth quarter. The project is expected to be
delivered under budget, owing to project management efficiencies and
cost savings, and Kinder Morgan’s investment in the project is now
expected to be approximately C$375 million, including costs associated
with the construction of a pipeline segment funded solely by KML.
Project completion is also forecast to be slightly ahead of schedule.
-
In May 2018, affiliates of KML and a large, international integrated
energy company entered into a binding Terminal Services Agreement to
construct two new distillate tanks with combined storage capacity of
200,000 barrels and enhance the railcar unloading capabilities at
KML’s Vancouver Wharves terminal in North Vancouver, British Columbia.
The approximately C$43 million capital project is supported by a
20-year initial term, take-or-pay contract. Permitting efforts are
underway, and the project is expected to be placed in service in
mid-2020.
-
Greens Port CBR, LLC (GCBR), a 50-50 joint venture between affiliates
of KMI and Watco Companies LLC (Watco), is making enhancements to its
unit-train facility at Watco’s Greens Port Industrial Park on the
Houston Ship Channel to allow for the loading of refined products for
export to Mexico and other destinations, while maintaining its
existing light and heavy crude railcar unloading capabilities. Upon
completion in the second quarter of 2019, GCBR will be connected via
existing cross-channel lines to KMI’s best-in-class Pasadena and
Galena Park refined products storage complex. GCBR’s approximately $11
million investment is supported by a three-year, firm volume
commitment from a major refiner.
Kinder Morgan Canada
-
On May 29, 2018, KML announced that the Government of Canada agreed to
purchase the Trans Mountain Pipeline system and the Trans Mountain
Expansion Project (TMEP) for C$4.5 billion. As part of the agreement,
the Government of Canada agreed to fund the ramp up and resumption of
full TMEP planning and construction work by guaranteeing TMEP’s
expenditures under a separate Federal Government recourse credit
facility until the transaction closes. That approximately C$1 billion
credit facility was put in place in mid-June. The parties expect to
close the transaction in the late third quarter or early fourth
quarter of 2018, subject to KML shareholder and applicable regulatory
approvals.
-
On May 30, 2018, concurrently with the termination of the 2017 C$5.5
billion credit facilities, KML satisfied the conditions to make
effective a new C$500 million credit agreement for general corporate
purposes, including funding for working capital needs and non-TMEP
capital expenditures. The new credit agreement terminates upon the
earlier of the date of closing of the Trans Mountain sale and May 29,
2020.
Financing
-
The use of proceeds from the sale of the Trans Mountain Pipeline
System and the TMEP is a KML board decision. KMI intends to use any
proceeds it receives in respect of its interest in KML to pay down
debt. KMI’s share of the after-tax proceeds will be approximately $2
billion.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. We own an interest in or
operate approximately 85,000 miles of pipelines and 152 terminals. Our
pipelines transport natural gas, refined petroleum products, crude oil,
condensate, CO2 and other products, and our terminals
transload and store liquid commodities including petroleum products,
ethanol and chemicals, and bulk products, including petroleum coke,
metals and ores. For more information please visit www.kindermorgan.com.
Please join Kinder Morgan, Inc. at 4:30 p.m. Eastern Time on
Wednesday, July 18, at
www.kindermorgan.com
for a LIVE webcast conference call on the company’s second quarter
earnings.
Non-GAAP Financial Measures
The non-generally accepted accounting principles (non-GAAP) financial
measures of distributable cash flow (DCF), both in the aggregate and per
share, segment earnings before depreciation, depletion, amortization and
amortization of excess cost of equity investments (DD&A) and Certain
Items (Segment EBDA before Certain Items), net income before interest
expense, taxes, DD&A and Certain Items (Adjusted EBITDA), Adjusted
Earnings and Adjusted Earnings per common share are presented herein.
Certain Items
as used to
calculate our Non-GAAP measures, 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, enactment of new tax legislation and casualty losses).
DCF
is calculated by adjusting
net income available to common stockholders before Certain Items for
DD&A, total book and cash taxes, sustaining capital expenditures and
other items. DCF is a significant performance measure useful to
management and by external users of our financial statements in
evaluating our performance and to measure and estimate the ability of
our assets to generate cash earnings after servicing our debt and
preferred stock dividends, paying cash taxes and expending sustaining
capital, that could be used for discretionary purposes such as common
stock dividends, stock repurchases, retirement of debt, or expansion
capital expenditures. We believe the GAAP measure most directly
comparable to DCF is net income available to common stockholders. A
reconciliation of net income available to common stockholders to DCF is
provided herein. DCF per share is DCF divided by average
outstanding shares, including restricted stock awards that participate
in dividends.
Segment EBDA before Certain Items
is used by management in its analysis of segment performance and
management of our business. General and administrative expenses
are generally not under the control of our segment operating managers,
and therefore, are not included when we measure business segment
operating performance. We believe Segment EBDA before Certain
Items is a significant performance metric because it provides us and
external users of our financial statements additional insight into the
ability of our segments to generate segment cash earnings on an ongoing
basis. We believe it is useful to investors because it is a
measure that management uses to allocate resources to our segments and
assess each segment’s performance. We believe the GAAP measure
most directly comparable to Segment EBDA before Certain Items is segment
earnings before DD&A and amortization of excess cost of equity
investments (Segment EBDA). Segment EBDA before Certain Items is
calculated by adjusting Segment EBDA for the Certain Items attributable
to a segment, which are specifically identified in the footnotes to the
accompanying tables.
Adjusted EBITDA
is calculated by
adjusting net income before interest expense, taxes, and DD&A (EBITDA)
for Certain Items, noncontrolling interests before Certain Items, and
KMI’s share of certain equity investees’ DD&A (net of consolidating
joint venture partners’ share of DD&A) and book taxes, which are
specifically identified in the footnotes to the accompanying tables. Adjusted
EBITDA is used by management and external users, in conjunction with our
net debt, to evaluate certain leverage metrics. Therefore, we
believe Adjusted EBITDA is useful to investors. We believe the
GAAP measure most directly comparable to Adjusted EBITDA is net income.
Adjusted Earnings
is net income
available to common stockholders before Certain Items. Adjusted
Earnings is used by certain external users of our financial statements
to assess the earnings of our business excluding Certain Items as
another reflection of the company’s ability to generate earnings. We
believe the GAAP measure most directly comparable to Adjusted Earnings
is net income available to common stockholders. Adjusted Earnings per
share uses Adjusted Earnings and applies the same two-class method used
in arriving at Basic Earnings Per Common Share.
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
DCF, Segment EBDA before Certain Items and Adjusted EBITDA 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. DCF should not be
used as an alternative to net cash provided by operating activities
computed 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 KMI 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 by these
forward-looking statements include the risks and uncertainties described
in KMI’s reports filed with the Securities and Exchange Commission
(SEC), including its Annual Report on Form 10-K for the year-ended
December 31, 2017 (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, KMI 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 June 30,
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
3,428
|
|
|
$
|
3,368
|
|
|
|
|
|
|
$
|
6,846
|
|
|
$
|
6,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs, expenses and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of sales
|
|
|
1,068
|
|
|
1,070
|
|
|
|
|
|
|
2,087
|
|
|
2,131
|
|
|
|
|
Operations and maintenance
|
|
|
617
|
|
|
556
|
|
|
|
|
|
|
1,236
|
|
|
1,089
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
571
|
|
|
577
|
|
|
|
|
|
|
1,141
|
|
|
1,135
|
|
|
|
|
General and administrative
|
|
|
164
|
|
|
157
|
|
|
|
|
|
|
337
|
|
|
341
|
|
|
|
|
Taxes, other than income taxes
|
|
|
85
|
|
|
91
|
|
|
|
|
|
|
173
|
|
|
195
|
|
|
|
|
Loss on impairments and divestitures, net
|
|
|
653
|
|
|
—
|
|
|
|
|
|
|
653
|
|
|
6
|
|
|
|
|
Other income, net
|
|
|
(2
|
)
|
|
(1
|
)
|
|
|
|
|
|
(2
|
)
|
|
—
|
|
|
|
|
|
|
|
3,156
|
|
|
2,450
|
|
|
|
|
|
|
5,625
|
|
|
4,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
272
|
|
|
918
|
|
|
|
|
|
|
1,221
|
|
|
1,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from equity investments
|
|
|
58
|
|
|
135
|
|
|
|
|
|
|
278
|
|
|
310
|
|
|
|
|
Amortization of excess cost of equity investments
|
|
|
(24
|
)
|
|
(15
|
)
|
|
|
|
|
|
(56
|
)
|
|
(30
|
)
|
|
|
|
Interest, net
|
|
|
(516
|
)
|
|
(463
|
)
|
|
|
|
|
|
(983
|
)
|
|
(928
|
)
|
|
|
|
Other, net
|
|
|
34
|
|
|
24
|
|
|
|
|
|
|
70
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(176
|
)
|
|
599
|
|
|
|
|
|
|
530
|
|
|
1,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense)
|
|
|
46
|
|
|
(216
|
)
|
|
|
|
|
|
(118
|
)
|
|
(462
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(130
|
)
|
|
383
|
|
|
|
|
|
|
412
|
|
|
828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests
|
|
|
(11
|
)
|
|
(7
|
)
|
|
|
|
|
|
(29
|
)
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to Kinder Morgan, Inc.
|
|
|
(141
|
)
|
|
376
|
|
|
|
|
|
|
383
|
|
|
816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
(39
|
)
|
|
(39
|
)
|
|
|
|
|
|
(78
|
)
|
|
(78
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to common stockholders
|
|
|
$
|
(180
|
)
|
|
$
|
337
|
|
|
|
|
|
|
$
|
305
|
|
|
$
|
738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class P Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (loss) earnings per common share
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.15
|
|
|
|
|
|
|
$
|
0.14
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average common shares outstanding
|
|
|
2,204
|
|
|
2,230
|
|
|
|
|
|
|
2,206
|
|
|
2,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Declared dividend per common share
|
|
|
$
|
0.20
|
|
|
$
|
0.125
|
|
|
|
|
|
|
$
|
0.40
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per common share (1)
|
|
|
$
|
0.21
|
|
|
$
|
0.14
|
|
|
|
|
|
|
$
|
0.43
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBDA
|
|
|
|
|
|
|
|
%
change
|
|
|
|
|
|
|
|
%
change
|
Natural Gas Pipelines
|
|
|
$
|
313
|
|
|
$
|
907
|
|
|
|
(65
|
)%
|
|
|
$
|
1,449
|
|
|
$
|
1,962
|
|
|
|
(26
|
)%
|
CO2
|
|
|
157
|
|
|
221
|
|
|
|
(29
|
)%
|
|
|
356
|
|
|
439
|
|
|
|
(19
|
)%
|
Terminals
|
|
|
274
|
|
|
304
|
|
|
|
(10
|
)%
|
|
|
569
|
|
|
611
|
|
|
|
(7
|
)%
|
Products Pipelines
|
|
|
319
|
|
|
324
|
|
|
|
(2
|
)%
|
|
|
578
|
|
|
611
|
|
|
|
(5
|
)%
|
Kinder Morgan Canada
|
|
|
46
|
|
|
43
|
|
|
|
7
|
%
|
|
|
92
|
|
|
86
|
|
|
|
7
|
%
|
Total Segment EBDA
|
|
|
$
|
1,109
|
|
|
$
|
1,799
|
|
|
|
(38
|
)%
|
|
|
$
|
3,044
|
|
|
$
|
3,709
|
|
|
|
(18
|
)%
|
|
Note
|
(1)
|
|
Adjusted earnings per common share uses adjusted earnings and
applies the same two-class method used in arriving at diluted (loss)
earnings per common share. See the following page, Preliminary
Earnings Contribution by Business Segment, for a reconciliation of
net (loss) income available to common stockholders to adjusted
earnings.
|
|
Kinder Morgan, Inc. and Subsidiaries
Preliminary Earnings Contribution by Business Segment
(Unaudited)
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
%
change
|
|
|
2018
|
|
|
2017
|
|
|
%
change
|
Segment EBDA before certain items (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Pipelines
|
|
|
$
|
1,001
|
|
|
|
$
|
905
|
|
|
|
11
|
%
|
|
|
$
|
2,083
|
|
|
|
$
|
1,924
|
|
|
|
8
|
%
|
CO2
|
|
|
221
|
|
|
|
220
|
|
|
|
—
|
%
|
|
|
458
|
|
|
|
442
|
|
|
|
4
|
%
|
Terminals
|
|
|
308
|
|
|
|
299
|
|
|
|
3
|
%
|
|
|
604
|
|
|
|
601
|
|
|
|
—
|
%
|
Products Pipelines
|
|
|
318
|
|
|
|
290
|
|
|
|
10
|
%
|
|
|
608
|
|
|
|
577
|
|
|
|
5
|
%
|
Kinder Morgan Canada
|
|
|
46
|
|
|
|
43
|
|
|
|
7
|
%
|
|
|
92
|
|
|
|
86
|
|
|
|
7
|
%
|
Subtotal
|
|
|
1,894
|
|
|
|
1,757
|
|
|
|
8
|
%
|
|
|
3,845
|
|
|
|
3,630
|
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DD&A and amortization of excess investments
|
|
|
(595
|
)
|
|
|
(592
|
)
|
|
|
|
|
|
(1,197
|
)
|
|
|
(1,165
|
)
|
|
|
|
General and administrative and corporate charges (1) (2)
|
|
|
(160
|
)
|
|
|
(149
|
)
|
|
|
|
|
|
(324
|
)
|
|
|
(323
|
)
|
|
|
|
Interest, net (1)
|
|
|
(477
|
)
|
|
|
(468
|
)
|
|
|
|
|
|
(949
|
)
|
|
|
(945
|
)
|
|
|
|
Subtotal
|
|
|
662
|
|
|
|
548
|
|
|
|
|
|
|
1,375
|
|
|
|
1,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book taxes (1)
|
|
|
(145
|
)
|
|
|
(199
|
)
|
|
|
|
|
|
(312
|
)
|
|
|
(433
|
)
|
|
|
|
Certain items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and divestiture related costs (3)
|
|
|
(48
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
(48
|
)
|
|
|
(7
|
)
|
|
|
|
Fair value amortization
|
|
|
9
|
|
|
|
17
|
|
|
|
|
|
|
20
|
|
|
|
34
|
|
|
|
|
Contract early termination (4)
|
|
|
(1
|
)
|
|
|
4
|
|
|
|
|
|
|
(1
|
)
|
|
|
26
|
|
|
|
|
Legal and environmental reserves (5)
|
|
|
—
|
|
|
|
34
|
|
|
|
|
|
|
(37
|
)
|
|
|
32
|
|
|
|
|
Change in fair market value of derivative contracts (6)
|
|
|
(103
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
(143
|
)
|
|
|
5
|
|
|
|
|
Losses on impairments and divestitures, net (7)
|
|
|
(742
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
(742
|
)
|
|
|
(6
|
)
|
|
|
|
Hurricane damage recoveries, net
|
|
|
27
|
|
|
|
—
|
|
|
|
|
|
|
24
|
|
|
|
—
|
|
|
|
|
Refund and reserve adjustment of taxes, other than income taxes
|
|
|
21
|
|
|
|
—
|
|
|
|
|
|
|
39
|
|
|
|
—
|
|
|
|
|
Other
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
(1
|
)
|
|
|
9
|
|
|
|
|
Subtotal certain items before tax
|
|
|
(838
|
)
|
|
|
51
|
|
|
|
|
|
|
(889
|
)
|
|
|
93
|
|
|
|
|
Book tax certain items
|
|
|
191
|
|
|
|
(17
|
)
|
|
|
|
|
|
194
|
|
|
|
(29
|
)
|
|
|
|
Impact of 2017 Tax Cuts and Jobs Act
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
44
|
|
|
|
—
|
|
|
|
|
Total certain items
|
|
|
(647
|
)
|
|
|
34
|
|
|
|
|
|
|
(651
|
)
|
|
|
64
|
|
|
|
|
Net (loss) income
|
|
|
(130
|
)
|
|
|
383
|
|
|
|
|
|
|
412
|
|
|
|
828
|
|
|
|
|
Net income attributable to noncontrolling interests
|
|
|
(11
|
)
|
|
|
(7
|
)
|
|
|
|
|
|
(29
|
)
|
|
|
(12
|
)
|
|
|
|
Preferred stock dividends
|
|
|
(39
|
)
|
|
|
(39
|
)
|
|
|
|
|
|
(78
|
)
|
|
|
(78
|
)
|
|
|
|
Net (loss) income available to common stockholders
|
|
|
$
|
(180
|
)
|
|
|
$
|
337
|
|
|
|
|
|
|
$
|
305
|
|
|
|
$
|
738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to common stockholders
|
|
|
$
|
(180
|
)
|
|
|
$
|
337
|
|
|
|
|
|
|
$
|
305
|
|
|
|
$
|
738
|
|
|
|
|
Total certain items
|
|
|
647
|
|
|
|
(34
|
)
|
|
|
|
|
|
651
|
|
|
|
(64
|
)
|
|
|
|
Noncontrolling interests certain item (8)
|
|
|
(8
|
)
|
|
|
1
|
|
|
|
|
|
|
(8
|
)
|
|
|
1
|
|
|
|
|
Adjusted earnings
|
|
|
459
|
|
|
|
304
|
|
|
|
|
|
|
948
|
|
|
|
675
|
|
|
|
|
DD&A and amortization of excess investments (9)
|
|
|
684
|
|
|
|
686
|
|
|
|
|
|
|
1,374
|
|
|
|
1,357
|
|
|
|
|
Total book taxes (10)
|
|
|
159
|
|
|
|
223
|
|
|
|
|
|
|
343
|
|
|
|
484
|
|
|
|
|
Cash taxes (11)
|
|
|
(33
|
)
|
|
|
(48
|
)
|
|
|
|
|
|
(46
|
)
|
|
|
(45
|
)
|
|
|
|
Other items (12)
|
|
|
11
|
|
|
|
13
|
|
|
|
|
|
|
22
|
|
|
|
26
|
|
|
|
|
Sustaining capital expenditures (13)
|
|
|
(163
|
)
|
|
|
(156
|
)
|
|
|
|
|
|
(277
|
)
|
|
|
(260
|
)
|
|
|
|
DCF
|
|
|
$
|
1,117
|
|
|
|
$
|
1,022
|
|
|
|
|
|
|
$
|
2,364
|
|
|
|
$
|
2,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for dividends (14)
|
|
|
2,214
|
|
|
|
2,239
|
|
|
|
|
|
|
2,216
|
|
|
|
2,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DCF per common share
|
|
|
$
|
0.50
|
|
|
|
$
|
0.46
|
|
|
|
|
|
|
$
|
1.07
|
|
|
|
$
|
1.00
|
|
|
|
|
Declared dividend per common share
|
|
|
$
|
0.20
|
|
|
|
$
|
0.125
|
|
|
|
|
|
|
$
|
0.40
|
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (15)
|
|
|
$
|
1,848
|
|
|
|
$
|
1,728
|
|
|
|
|
|
|
$
|
3,749
|
|
|
|
$
|
3,547
|
|
|
|
|
|
Notes ($ million)
|
(1)
|
|
Excludes certain items:
|
|
|
2Q 2018 - Natural Gas Pipelines $(688), CO2 $(64), Terminals $(34),
Products Pipelines $1, general and administrative and corporate
charges $(14), interest expense $(39), book tax $191.
|
|
|
2Q 2017 - Natural Gas Pipelines $2, CO2 $1, Terminals $5, Products
Pipelines $34, general and administrative and corporate charges $4,
interest expense $5, book tax $(17).
|
|
|
YTD 2018 - Natural Gas Pipelines $(634), CO2 $(102), Terminals
$(35), Products Pipelines $(30), general and administrative and
corporate charges $(10), interest expense $(34), book tax $194.
|
|
|
YTD 2017 - Natural Gas Pipelines $38, CO2 $(3), Terminals $10,
Products Pipelines $34, general and administrative and corporate
charges $(3), interest expense $17, book tax $(29).
|
(2)
|
|
Includes corporate (benefit) charges:
|
|
|
2Q 2018 - $10
|
|
|
2Q 2017 - $(3)
|
|
|
YTD 2018 - $(3)
|
|
|
YTD 2017 - $3
|
|
|
General and administrative expense is also net of management fee
revenues from an equity investee:
|
|
|
2Q 2017 - $(9)
|
|
|
YTD 2017 - $(18)
|
(3)
|
|
2018 amounts primarily represent the non-cash write-off of
capitalized KML credit facility fees.
|
(4)
|
|
Comprised of earnings recognized related to the early termination of
customer contracts, including earnings from the sale of a contract
termination claim related to a customer bankruptcy.
|
(5)
|
|
Legal reserve adjustments related to certain litigation and
environmental matters.
|
(6)
|
|
Gains or losses are reflected in our DCF when realized.
|
(7)
|
|
2018 amounts include (i) a $600 million non-cash impairment of
certain gathering and processing assets in Oklahoma; (ii) a $60
million non-cash impairment of certain Terminal business segment
assets; and (iii) a net loss of $89 million representing an
impairment of our equity investment in Gulf LNG Holdings Group, LLC
(Gulf LNG) due to a ruling by an arbitration panel affecting a
customer contract.
|
(8)
|
|
Represents noncontrolling interest share of certain items.
|
(9)
|
|
Includes KMI's share of certain equity investees' DD&A, net of the
noncontrolling interests' portion of KML DD&A and consolidating
joint venture partners' share of DD&A:
|
|
|
2Q 2018 - $89
|
|
|
2Q 2017 - $94
|
|
|
YTD 2018 - $177
|
|
|
YTD 2017 - $192
|
(10)
|
|
Excludes book tax certain items. Also, includes KMI's share of
taxable equity investees' book taxes, net of the noncontrolling
interests' portion of KML book taxes:
|
|
|
2Q 2018 - $14
|
|
|
2Q 2017 - $24
|
|
|
YTD 2018 - $31
|
|
|
YTD 2017 - $51
|
(11)
|
|
Includes KMI's share of taxable equity investees' cash taxes:
|
|
|
2Q 2018 - $(28)
|
|
|
2Q 2017 - $(45)
|
|
|
YTD 2018 - $(38)
|
|
|
YTD 2017 - $(45)
|
(12)
|
|
Includes non-cash compensation associated with our restricted stock
program.
|
(13)
|
|
Includes KMI's share of certain equity investees' sustaining capital
expenditures (the same equity investees for which DD&A is added
back):
|
|
|
2Q 2018 - $(24)
|
|
|
2Q 2017 - $(27)
|
|
|
YTD 2018 - $(40)
|
|
|
YTD 2017 - $(45)
|
(14)
|
|
Includes restricted stock awards that participate in common share
dividends.
|
(15)
|
|
Net (loss) income is reconciled to Adjusted EBITDA as follows, with
any difference due to rounding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
Net (loss) income
|
|
|
(130
|
)
|
|
383
|
|
|
|
|
|
|
412
|
|
|
828
|
|
Total certain items
|
|
|
647
|
|
|
(34
|
)
|
|
|
|
|
|
651
|
|
|
(64
|
)
|
Net income attributable to noncontrolling interests before certain
items (16)
|
|
|
(3
|
)
|
|
(3
|
)
|
|
|
|
|
|
(7
|
)
|
|
(8
|
)
|
DD&A and amortization of excess investments (9) (17)
|
|
|
693
|
|
|
689
|
|
|
|
|
|
|
1,392
|
|
|
1,360
|
|
Book taxes (10) (17)
|
|
|
164
|
|
|
225
|
|
|
|
|
|
|
352
|
|
|
486
|
|
Interest, net (1)
|
|
|
477
|
|
|
468
|
|
|
|
|
|
|
949
|
|
|
945
|
|
Adjusted EBITDA
|
|
|
$
|
1,848
|
|
|
$
|
1,728
|
|
|
|
|
|
|
$
|
3,749
|
|
|
$
|
3,547
|
|
|
|
|
(16)
|
|
Excludes KML noncontrolling interests: 2Q 2018 - $16 2Q
2017 - $3 YTD 2018 - $30 YTD 2017 - $3
|
(17)
|
|
Includes the noncontrolling interests' portion of KML: 2Q 2018
- DD&A $9; Book taxes $5 2Q 2017 - DD&A $3; Book taxes $2 YTD
2018 - DD&A $18; Book taxes $9 YTD 2017 - DD&A $3; Book
taxes $2
|
|
Volume Highlights
(historical pro forma for acquired and divested assets)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Natural Gas Pipelines
|
|
|
|
|
|
|
|
|
|
|
|
|
Transport Volumes (BBtu/d) (1)
|
|
|
|
31,704
|
|
|
|
|
28,187
|
|
|
|
|
31,913
|
|
|
|
|
28,753
|
|
Sales Volumes (BBtu/d) (2)
|
|
|
|
2,445
|
|
|
|
|
2,247
|
|
|
|
|
2,468
|
|
|
|
|
2,404
|
|
Gas Gathering Volumes (BBtu/d) (3)
|
|
|
|
2,871
|
|
|
|
|
2,673
|
|
|
|
|
2,801
|
|
|
|
|
2,693
|
|
Crude/Condensate Gathering Volumes (MBbl/d) (4)
|
|
|
|
311
|
|
|
|
|
261
|
|
|
|
|
296
|
|
|
|
|
267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CO2
|
|
|
|
|
|
|
|
|
|
|
|
|
Southwest Colorado Production - Gross (Bcf/d) (5)
|
|
|
|
1.15
|
|
|
|
|
1.31
|
|
|
|
|
1.20
|
|
|
|
|
1.33
|
|
Southwest Colorado Production - Net (Bcf/d) (5)
|
|
|
|
0.53
|
|
|
|
|
0.64
|
|
|
|
|
0.55
|
|
|
|
|
0.65
|
|
Sacroc Oil Production - Gross (MBbl/d) (6)
|
|
|
|
29.16
|
|
|
|
|
27.42
|
|
|
|
|
29.35
|
|
|
|
|
27.86
|
|
Sacroc Oil Production - Net (MBbl/d) (7)
|
|
|
|
24.29
|
|
|
|
|
22.84
|
|
|
|
|
24.45
|
|
|
|
|
23.21
|
|
Yates Oil Production - Gross (MBbl/d) (6)
|
|
|
|
17.06
|
|
|
|
|
17.40
|
|
|
|
|
17.03
|
|
|
|
|
17.64
|
|
Yates Oil Production - Net (MBbl/d) (7)
|
|
|
|
7.43
|
|
|
|
|
7.68
|
|
|
|
|
7.57
|
|
|
|
|
7.84
|
|
Katz, Goldsmith, and Tall Cotton Oil Production - Gross (MBbl/d) (6)
|
|
|
|
8.12
|
|
|
|
|
7.97
|
|
|
|
|
8.36
|
|
|
|
|
7.63
|
|
Katz, Goldsmith, and Tall Cotton Oil Production - Net (MBbl/d) (7)
|
|
|
|
6.91
|
|
|
|
|
6.74
|
|
|
|
|
7.10
|
|
|
|
|
6.46
|
|
NGL Sales Volumes (MBbl/d) (8)
|
|
|
|
10.06
|
|
|
|
|
9.86
|
|
|
|
|
10.11
|
|
|
|
|
10.01
|
|
Realized Weighted Average Oil Price per Bbl (9)
|
|
|
$
|
58.08
|
|
|
|
$
|
57.80
|
|
|
|
$
|
58.90
|
|
|
|
$
|
57.97
|
|
Realized Weighted Average NGL Price per Bbl
|
|
|
$
|
32.88
|
|
|
|
$
|
22.47
|
|
|
|
$
|
31.64
|
|
|
|
$
|
23.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminals
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquids Leasable Capacity (MMBbl)
|
|
|
|
88.9
|
|
|
|
|
85.8
|
|
|
|
|
88.9
|
|
|
|
|
85.8
|
|
Liquids Utilization %
|
|
|
|
90.7
|
%
|
|
|
|
94.5
|
%
|
|
|
|
90.7
|
%
|
|
|
|
94.5
|
%
|
Bulk Transload Tonnage (MMtons) (10)
|
|
|
|
16.9
|
|
|
|
|
14.6
|
|
|
|
|
31.3
|
|
|
|
|
29.0
|
|
Ethanol (MMBbl)
|
|
|
|
16.3
|
|
|
|
|
15.8
|
|
|
|
|
31.2
|
|
|
|
|
33.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products Pipelines
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific, Calnev, and CFPL (MBbl/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline (11)
|
|
|
|
860
|
|
|
|
|
826
|
|
|
|
|
813
|
|
|
|
|
797
|
|
Diesel
|
|
|
|
322
|
|
|
|
|
303
|
|
|
|
|
300
|
|
|
|
|
288
|
|
Jet Fuel
|
|
|
|
278
|
|
|
|
|
275
|
|
|
|
|
268
|
|
|
|
|
263
|
|
Sub-Total Refined Product Volumes - excl. Plantation
|
|
|
|
1,460
|
|
|
|
|
1,404
|
|
|
|
|
1,381
|
|
|
|
|
1,348
|
|
Plantation (MBbl/d) (12)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
|
|
222
|
|
|
|
|
233
|
|
|
|
|
218
|
|
|
|
|
229
|
|
Diesel
|
|
|
|
61
|
|
|
|
|
51
|
|
|
|
|
62
|
|
|
|
|
50
|
|
Jet Fuel
|
|
|
|
27
|
|
|
|
|
33
|
|
|
|
|
29
|
|
|
|
|
34
|
|
Sub-Total Refined Product Volumes - Plantation
|
|
|
|
310
|
|
|
|
|
317
|
|
|
|
|
309
|
|
|
|
|
313
|
|
Total (MBbl/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline (11)
|
|
|
|
1,082
|
|
|
|
|
1,059
|
|
|
|
|
1,031
|
|
|
|
|
1,026
|
|
Diesel
|
|
|
|
383
|
|
|
|
|
354
|
|
|
|
|
362
|
|
|
|
|
338
|
|
Jet Fuel
|
|
|
|
305
|
|
|
|
|
308
|
|
|
|
|
297
|
|
|
|
|
297
|
|
Total Refined Product Volumes
|
|
|
|
1,770
|
|
|
|
|
1,721
|
|
|
|
|
1,690
|
|
|
|
|
1,661
|
|
NGLs (MBbl/d) (13)
|
|
|
|
121
|
|
|
|
|
121
|
|
|
|
|
119
|
|
|
|
|
114
|
|
Crude and Condensate (MBbl/d) (14)
|
|
|
|
349
|
|
|
|
|
331
|
|
|
|
|
339
|
|
|
|
|
340
|
|
Total Delivery Volumes (MBbl/d)
|
|
|
|
2,240
|
|
|
|
|
2,173
|
|
|
|
|
2,148
|
|
|
|
|
2,115
|
|
Ethanol (MBbl/d) (15)
|
|
|
|
129
|
|
|
|
|
118
|
|
|
|
|
124
|
|
|
|
|
114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trans Mountain (MMBbl/d - mainline throughput)
|
|
|
|
293
|
|
|
|
|
303
|
|
|
|
|
291
|
|
|
|
|
305
|
|
|
Notes
|
(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)
|
|
Includes Texas Intrastates and KMNTP.
|
(3)
|
|
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.
|
(4)
|
|
Includes Hiland Midstream, EagleHawk, and Camino Real. Joint Venture
throughput reported at KMI share.
|
(5)
|
|
Includes McElmo Dome and Doe Canyon sales volumes.
|
(6)
|
|
Represents 100% production from the field.
|
(7)
|
|
Represents KMI's net share of the production from the field.
|
(8)
|
|
Net to KMI.
|
(9)
|
|
Includes all KMI crude oil properties.
|
(10)
|
|
Includes KMI's share of Joint Venture tonnage.
|
(11)
|
|
Gasoline volumes include ethanol pipeline volumes.
|
(12)
|
|
Plantation reported at KMI share.
|
(13)
|
|
Includes Cochin, Utopia (KMI share), and Cypress (KMI share).
|
(14)
|
|
Includes KMCC, Double Eagle (KMI share), and Double H.
|
(15)
|
|
Total ethanol handled including pipeline volumes included in
gasoline volumes above.
|
|
Kinder Morgan, Inc. and Subsidiaries
Preliminary Consolidated Balance Sheets
(Unaudited)
(In millions)
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
ASSETS
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
271
|
|
|
|
$
|
264
|
|
Other current assets
|
|
|
2,363
|
|
|
|
2,451
|
|
Property, plant and equipment, net
|
|
|
39,905
|
|
|
|
40,155
|
|
Investments
|
|
|
7,293
|
|
|
|
7,298
|
|
Goodwill
|
|
|
22,153
|
|
|
|
22,162
|
|
Deferred charges and other assets
|
|
|
6,330
|
|
|
|
6,725
|
|
TOTAL ASSETS
|
|
|
$
|
78,315
|
|
|
|
$
|
79,055
|
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Short-term debt
|
|
|
$
|
2,132
|
|
|
|
$
|
2,828
|
|
Other current liabilities
|
|
|
3,247
|
|
|
|
3,353
|
|
Long-term debt
|
|
|
34,640
|
|
|
|
33,988
|
|
Preferred interest in general partner of KMP
|
|
|
100
|
|
|
|
100
|
|
Debt fair value adjustments
|
|
|
626
|
|
|
|
927
|
|
Other
|
|
|
2,495
|
|
|
|
2,735
|
|
Total liabilities
|
|
|
43,240
|
|
|
|
43,931
|
|
|
|
|
|
|
|
|
Redeemable Noncontrolling Interest
|
|
|
581
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Shareholders' Equity
|
|
|
|
|
|
|
Other shareholders' equity
|
|
|
33,725
|
|
|
|
34,177
|
|
Accumulated other comprehensive loss
|
|
|
(690
|
)
|
|
|
(541
|
)
|
KMI equity
|
|
|
33,035
|
|
|
|
33,636
|
|
Noncontrolling interests
|
|
|
1,459
|
|
|
|
1,488
|
|
Total shareholders' equity
|
|
|
34,494
|
|
|
|
35,124
|
|
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
SHAREHOLDERS' EQUITY
|
|
|
$
|
78,315
|
|
|
|
$
|
79,055
|
|
|
|
|
|
|
|
|
Net Debt (1)
|
|
|
$
|
36,398
|
|
|
|
$
|
36,409
|
|
Net Debt including 50% of KML preferred shares (2)
|
|
|
36,613
|
|
|
|
36,624
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Twelve Months Ended
|
|
|
|
June 30,
|
|
|
December 31,
|
Reconciliation of Net (Loss) Income to Adjusted EBITDA
|
|
|
2018
|
|
|
2017
|
Net (loss) income
|
|
|
$
|
(193
|
)
|
|
|
$
|
223
|
|
Total certain items
|
|
|
2,159
|
|
|
|
1,445
|
|
Net income attributable to noncontrolling interests before certain
items (3)
|
|
|
(12
|
)
|
|
|
(12
|
)
|
DD&A and amortization of excess investments (4)
|
|
|
2,736
|
|
|
|
2,704
|
|
Income tax expense before certain items (5)
|
|
|
834
|
|
|
|
967
|
|
Interest, net before certain items
|
|
|
1,876
|
|
|
|
1,871
|
|
Adjusted EBITDA
|
|
|
$
|
7,400
|
|
|
|
$
|
7,198
|
|
|
|
|
|
|
|
|
Net Debt including 50% of KML preferred shares to Adjusted EBITDA
|
|
|
4.9
|
|
|
|
5.1
|
|
|
Notes
|
(1)
|
|
Amounts exclude: (i) the preferred interest in general partner of
KMP, (ii) debt fair value adjustments and (iii) the foreign exchange
impact on our Euro denominated debt of $103 million and $143 million
as of June 30, 2018 and December 31, 2017, respectively, as we have
entered into swaps to convert that debt to U.S.$.
|
(2)
|
|
June 30, 2018 and December 31, 2017 amounts include $215 million,
representing 50% of KML preferred shares which is included in
noncontrolling interests.
|
(3)
|
|
2018 and 2017 amounts exclude KML noncontrolling interests of $55
million and $27 million, respectively.
|
(4)
|
|
2018 and 2017 amounts include KMI's share of certain equity
investees' DD&A of $383 million and $382 million, respectively.
|
(5)
|
|
2018 and 2017 amounts include KMI's share of taxable equity
investees' book taxes of $101 million and $114 million, respectively.
|