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 third
quarter ($0.80 annualized) payable on November 15, 2018, to common
stockholders of record as of the close of business on October 31, 2018.
KMI is reporting third quarter net income available to common
stockholders of $693 million, versus $334 million in the third quarter
of 2017; and distributable cash flow (DCF) of $1.1 billion, a 4 percent
increase over the third quarter of 2017. KMI’s DCF number does not
include the impact of the one-time gain on the sale of the Trans
Mountain pipeline system. KMI continued to fund all growth capital
through operating cash flows with no need to access capital markets for
that purpose.
“The dividend we are declaring is once again a 60 percent increase from
last year’s fourth quarter dividend, and is consistent with the plan KMI
announced during the summer of 2017,” said Richard D. Kinder, Executive
Chairman. “We made tremendous progress on our balance sheet and on
developing attractive new projects during the quarter.”
“The third quarter was a momentous one for our company,” Chief Executive
Officer Steve Kean noted. “We closed the Trans Mountain transaction on
August 31 and then made a final investment decision on the Permian
Highway Pipeline Project less than a week later. Our three-year campaign
to strengthen KMI’s balance sheet reached an important milestone as we
ended the quarter with an Adjusted Net Debt-to-Adjusted EBITDA ratio of
approximately 4.6 times. Consistent with that achievement, all three
ratings agencies have provided formal notification that our credit
ratings are on positive outlook for an upgrade, and S&P announced they
expect to raise our rating in January.”
Kean continued, “We are maintaining our planned substantial dividend
increase and we have also revised our long-term leverage target from at
or below 5.0 times to around 4.5 times, which is consistent with where
we ended the quarter.”
KMI President Kim Dang said, “This quarter reinforced the importance of
our interconnected natural gas transportation network as that segment
accounted for a substantial portion of the growth in segment earnings
versus the third quarter of 2017. We continue to benefit from
strategically positioned fee-based assets that generate predictable cash
flows and a network that provides our customers with unrivaled
flexibility. We also made good progress during the third quarter on the
Gulf Coast Express Project and began work on the Permian Highway
Pipeline Project. Both of those projects take advantage of the
unparalleled market access afforded by our existing network.”
Dang continued, “Once again we had very good commercial and operating
performance. Our third quarter earnings per common share of $0.31
includes the one-time gain on the sale of the Trans Mountain system. We
achieved distributable cash flow (DCF) of $0.49 per common share in the
quarter, representing 4 percent growth over the third quarter of 2017.
This resulted in nearly $650 million of excess DCF above our declared
dividend.”
As noted above, KMI reported third quarter net income available to
common stockholders of $693 million, compared to net income of $334
million for the third quarter of 2017, and DCF of $1,093 million, up 4
percent from $1,055 million for the comparable period in 2017. The
increase in DCF compared to the third quarter of 2017 was due to greater
contributions across nearly all business segments, partially offset by a
reduction in Kinder Morgan Canada earnings resulting from the Trans
Mountain sale as well as higher sustaining capital expenditures. Net
income available to common stockholders for the third quarter of 2018
also benefited from the gain on the Trans Mountain sale. KMI’s project
backlog for the third quarter stood at $6.5 billion, an approximately
$250 million increase over the second quarter of 2018, with additions of
just under $800 million in new projects, primarily in the Natural Gas
Pipelines segment, partially offset by approximately $550 million in
projects placed in service and other capital adjustments. Excluding the
CO2 segment projects, KMI expects the projects in the backlog
to generate an average capital-to-EBITDA multiple of approximately 5.4
times.
For the first nine months of 2018, KMI reported net income available to
common stockholders of $998 million, compared to $1,072 million for the
first nine months of 2017, and DCF of $3,457 million, up 5 percent from
$3,292 million for the comparable period in 2017. The increase in DCF
was driven by greater contributions from all KMI business units,
partially offset by a reduction in Kinder Morgan Canada earnings
resulting from the sale of the Trans Mountain system and higher
sustaining capital expenditures. Net income available to common
stockholders was reduced by a $488 million unfavorable change in total
Certain Items compared to the first nine months of 2017, as the gain on
the sale of the Trans Mountain system was more than offset by an
impairment taken in the previous quarter.
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. We currently
expect to exceed those DCF and Adjusted EBITDA targets. KMI forecasts to
invest $2.5 billion in growth projects during 2018, up $300 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 and expects to end the year with a ratio of 4.6
times, consistent with the current quarter (this ratio excludes the
public share of the Kinder Morgan Canada Limited (KML) cash proceeds
from the Trans Mountain transaction of approximately $0.9 billion).
The KML distribution of the Trans Mountain sale proceeds is expected to
occur on January 3, 2019, after a special meeting of KML shareholders on
November 29, 2018. KMI consolidates all of the proceeds on its balance
sheet, but only owns an approximately 70 percent interest in KML. KMI
plans to use its approximately $2 billion share of proceeds to pay down
debt.
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 35,459 barrels per day (Bbl/d) at $58.14/Bbl in 2018; 29,272
Bbl/d at $56.41/Bbl in 2019; 15,800 Bbl/d at $56.56/Bbl in 2020; 9,100
Bbl/d at $55.10/Bbl in 2021; and 3,300 Bbl/d at $57.02/Bbl in 2022.
Overview of Business Segments
“The Natural Gas Pipelines segment had another outstanding
quarter. The segment’s financial performance for the third quarter of
2018 was 9 percent higher relative to the third quarter of 2017, said
KMI President Kim Dang. “The segment benefited from continued increased
activity across our Midstream gathering and processing assets, primarily
Hiland, KinderHawk, and South Texas due to increased drilling and
production in the Bakken, Haynesville and Eagle Ford basins. The
transmission assets saw higher revenue on El Paso Natural Gas (EPNG) and
Natural Gas Pipeline Company of America (NGPL) due primarily to
increased Permian-related activity, on Tennessee Gas Pipeline (TGP) due
to projects placed in service, and on Colorado Interstate Gas (CIG) due
to growing DJ basin production.”
Natural gas transport volumes were up 4 billion cubic feet per day
(Bcf/d) or 14 percent compared to the third quarter of 2017, driven by
higher throughput on TGP due to power demand and projects placed in
service; on NGPL due to power demand; on EPNG due to additional Permian
capacity sales; on CIG due to growing DJ basin production; and on the
Texas Intrastates (Kinder Morgan Texas Pipeline/Tejas) due to higher
utilization and incremental contracts with shippers serving Mexico and
the Texas Gulf Coast industrial markets. Natural gas gathering volumes
were up 20 percent from the third quarter of 2017 due primarily to
higher volumes on the KinderHawk system.
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 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
(expected to increase almost seven-fold), exports to Mexico (forecast to
rise by 51 percent), and continued industrial development, particularly
in the petrochemical industry.
“CO
2
segment earnings were up 7 percent versus
the second quarter of 2017 on increased volumes and strong NGL and CO2
prices. Third quarter 2018 combined oil production across all of our
fields was up 2 percent compared to the same period in 2017 on a net to
KMI basis, primarily due to increased volumes at our SACROC (up 4
percent) and Tall Cotton assets (up 28 percent), though Tall Cotton
production was below plan. Third quarter 2018 net NGL sales volumes of
10.4 thousand barrels per day (MBbl/d) were up 8 percent compared to the
same period in 2017. In total for the first nine months of 2018, oil
production on a gross and net-to-KMI basis was up 2 and 3 percent
respectively versus the comparable period in 2017,” Dang said. “The
segment was also helped during the quarter by higher NGL and CO2
prices, as NGL prices were up 48 percent and CO2 prices up 12
percent compared to the same period last year. Our realized weighted
average oil price for the quarter was essentially flat at $57.96 per
barrel compared to $58.29 per barrel for the third quarter of 2017,
given our hedge position as well as the increase in the Midland-Cushing
differential. For the remainder of 2018 and 2019 we have substantially
hedged the Mid-Cush differential.
“Terminals segment earnings were up 1 percent compared to the
third quarter of 2017. Contributions from our liquids business, which
accounts for approximately 81 percent of the segment total, were up 2
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 contract
expirations at certain of our crude-by-rail facilities in Edmonton and
Houston, tank lease expenses at our Edmonton South Terminal following
the sale of Trans Mountain, and continued softness in the New York
Harbor refined products storage market, particularly at our Staten
Island, New York location. Contributions from our bulk business were
down 3 percent compared to the third quarter of 2017 with earnings
impacted by certain asset divestitures and higher fuel and labor costs
at our steel handling operations.”
“The Products Pipelines segment earnings were up 2 percent
compared with third quarter 2017 performance due to contributions from
the Cochin and Double H Pipelines, partially offset by reduced
contributions from SFPP,” Dang said.
Total refined products volumes were up 2 percent for the third quarter
versus the same period in 2017. Ethanol volumes for the quarter were up
9 percent while crude and condensate pipeline volumes were up 13 percent
compared to the third quarter of 2017.
Kinder Morgan Canada contributions were down 36 percent in the
third quarter of 2018 compared to the third quarter of 2017, largely due
to the loss of September 2018 Trans Mountain earnings subsequent to the
sale closing on August 31, 2018.
Other News
Natural Gas Pipelines
-
On Sept. 5, 2018, Kinder Morgan Texas Pipeline (KMTP) and EagleClaw
Midstream Ventures (EagleClaw) announced a final investment decision
to proceed with the Permian Highway Pipeline Project (PHP Project),
having executed definitive joint venture agreements and securing
sufficient long-term binding transportation agreements with shippers.
Subsequently, the partners secured such agreements for all of the
remaining pipeline capacity. 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, and is expected to be in
service in late 2020, pending regulatory approvals. KMTP and EagleClaw
are the initial partners, each with a 50 percent ownership interest in
the project, and Apache Corporation has the option to acquire equity
from the initial partners. KMTP’s and EagleClaw’s ultimate ownership
interest may vary between approximately 27 percent and 50 percent,
depending on the exercise of ownership options held by anchor
shippers. KMTP will build and operate the pipeline.
-
Construction continues on the Gulf Coast Express Pipeline Project (GCX
Project). The first 9 miles of the Midland Lateral were placed in
service in August 2018. Construction work on the remaining 40 miles of
the lateral began in September, with an expected in-service date of
April 2019. The GCX Project remains on schedule for a full in-service
date of October 2019, pending regulatory approvals. The approximately
$1.75 billion GCX Project is designed to transport approximately 2
Bcf/d of natural gas from the Permian Basin to the Agua Dulce, Texas
area, and the project is fully subscribed under long-term, binding
transportation agreements. KMTP will build, operate and own a 50
percent interest in the GCX Project, with DCP Midstream and an
affiliate of Targa Resources each holding a 25 percent equity interest
in the project. Apache Corporation, a shipper on the pipeline, has a
right to purchase up to a 15 percent equity stake in the project from
KMTP.
-
Construction continues on the nearly $2 billion Elba Liquefaction
Project. 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. The first of 10 units is expected to be placed in service
in the first quarter of 2019, with the remaining nine units to come
online throughout 2019. Elba Liquefaction Company, L.L.C. (ELC), a KMI
joint venture with EIG Global Energy Partners as a 49 percent partner,
will own the 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 is adding upstream compression
facilities on the Elba Express pipeline to provide feed gas for
liquefaction. Phase II of this project was placed in service on Sept.
10 and the remainder of the project is expected to be placed in
service in November 2018.
-
TGP has commenced partial service on its Broad Run Expansion Project
and expects to place the full 200,000 Dth/d project in service by the
end of October. 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. Capital expenditures for the combined projects total
approximately $800 million.
-
Construction continues on the approximately $240 million SNG Fairburn
Expansion Project in Georgia (KMI share: $120 million). Work on the
Fairburn Lateral is complete, and construction on the compressor
station is nearing completion. The project, designed to provide
approximately 350,000 Dth/d of incremental long-term firm natural gas
transportation capacity into the Southeast market, is expected to be
placed in service in November 2018. SNG is a joint venture equally
owned by subsidiaries of KMI and Southern Company.
-
In October 2018, NGPL placed in service its approximately $176 million
Gulf Coast Southbound Expansion Project (KMI share: $88 million). The
current cost estimate is a significant reduction from the earlier
estimate of $212 million. The project, which is fully subscribed under
long-term contracts, is designed to transport 460,000 Dth/d of
incremental firm transportation service from NGPL’s interstate
pipeline interconnects in Illinois, Arkansas and Texas to points south
on NGPL’s system to serve growing demand in the Gulf Coast area.
-
NGPL is proceeding with a second phase of its Gulf Coast Southbound
Expansion Project and is preparing its FERC filing for the first
quarter of 2019. The approximately $230 million project (KMI’s share:
$115 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 Oct. 1, 2018, FERC issued an order approving the approximately $56
million Sierrita Gas Pipeline Expansion (KMI share: approximately $20
million). This expansion project will increase the 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. This
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.
-
In August 2018, Gulf LNG Liquefaction Company LLC, Gulf LNG Energy LLC
and Gulf LNG Pipeline, LLC (GLNG) received from FERC a Notice of
Schedule for Environmental Review. According to the schedule, the
final Environmental Impact Statement (EIS) will be completed in April
2019 and the final decision for issuance of the FERC certificate will
occur in July 2019. In September, GLNG filed a complaint against Eni
USA to confirm the arbitration panel’s Final Award dated Jun. 29,
2018, and filed a separate complaint against Eni S.p.A., parent
company of Eni USA, to enforce a Guarantee Agreement executed by Eni
S.p.A. related to the contract at issue in the arbitration.
CO
2
-
To meet strong demand for CO2 in the Permian Basin, two CO2
wells were successfully drilled and completed in the Cow Canyon
development area of KMI’s McElmo Dome. The approximately $15 million
investment beat expectations with the wells contributing over 50
MMcf/d of CO2, a 35 percent increase in production in this
area of McElmo Dome.
-
The productive life of the SACROC field continues to be extended, as
evidenced by its strong third quarter production, which was up 4
percent versus the same prior year period. This continued production
is due to KMI’s on-going success in exploiting the transition zone.
-
Oil production at KMI’s Tall Cotton facility has increased by 38
percent year-to-date relative to the same period in 2017 following the
completion of 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.
Terminals
-
Construction of all major facilities at the Base Line Terminal in
Edmonton, Alberta, Canada, is materially complete, with the final
tanks placed in service in the third and early fourth quarters of this
year, slightly ahead of schedule. The 12-tank, 4.8 million barrel
facility is fully contracted with long-term, firm take-or-pay
agreements with creditworthy customers. The 50-50 joint venture crude
oil merchant storage terminal developed by KML and Keyera Corp. is
expected to be completed under budget, with Kinder Morgan investing
approximately C$373 million.
-
Permitting efforts continue on the distillate storage expansion
project at KML’s Vancouver Wharves terminal in North Vancouver,
British Columbia. The C$43 million capital project, which calls for
the construction of two new distillate tanks with combined storage
capacity of 200,000 barrels and enhancements to the railcar unloading
capabilities, is supported by a 20-year initial term, take-or-pay
contract with an affiliate of a large, international integrated energy
company. The project is expected to be placed in service in the first
quarter of 2021.
-
In the third quarter of 2018, Greens Port CBR, LLC (GCBR), a 50-50
joint venture between affiliates of KMI and Watco Companies LLC
(Watco), commissioned the first phase of enhancements to its
unit-train facility at Watco’s Greens Port Industrial Park on the
Houston Ship Channel, allowing for the loading of refined products for
export to Mexico and other destinations. GCBR also loaded its first
unit-train of refined products in mid-September. Upon completion in
the second quarter of 2019, GCBR will connect with 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.
Products Pipelines
-
On Oct. 2, 2018, KMI launched a binding open season for the Roanoke
Expansion project. This project will provide for approximately 21,000
barrels per day (bpd) of incremental refined petroleum products
capacity on the Plantation Pipe Line System from the Baton Rouge,
Louisiana and Collins, Mississippi origin points to the Roanoke,
Virginia area. The expansion will primarily consist of additional pump
capacity and operational storage on the Plantation system. Pending a
successful open season and the receipt of regulatory approvals, the
project will be in service by April 1, 2020.
-
KMI has determined that it will not proceed with its previously
proposed Utica Marcellus Texas Pipeline (UMTP) natural gas liquids
project, instead maintaining that segment of an existing TGP pipeline
in natural gas service while developing an attractive project to
reverse its flow. TGP is now actively pursuing commercial arrangements
for natural gas service from Appalachia to the Gulf of Mexico on that
segment of its pipeline.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. We own an interest in or
operate approximately 84,000 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, October 17, at
www.kindermorgan.com
for a LIVE webcast conference call on the company’s third 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, net income attributable to noncontrolling interests
further adjusted for KML noncontrolling interests, 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)
|
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|
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|
|
|
|
|
|
|
|
|
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
|
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|
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|
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2018
|
|
2017
|
|
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|
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2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
3,517
|
|
|
$
|
3,281
|
|
|
|
|
|
|
$
|
10,363
|
|
|
$
|
10,073
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
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Costs, expenses and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of sales
|
|
|
1,135
|
|
|
1,007
|
|
|
|
|
|
|
3,222
|
|
|
3,138
|
|
|
|
|
Operations and maintenance
|
|
|
646
|
|
|
609
|
|
|
|
|
|
|
1,882
|
|
|
1,698
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
569
|
|
|
562
|
|
|
|
|
|
|
1,710
|
|
|
1,697
|
|
|
|
|
General and administrative
|
|
|
154
|
|
|
168
|
|
|
|
|
|
|
491
|
|
|
509
|
|
|
|
|
Taxes, other than income taxes
|
|
|
86
|
|
|
102
|
|
|
|
|
|
|
259
|
|
|
297
|
|
|
|
|
(Gain) loss on divestitures and impairments, net
|
|
|
(588
|
)
|
|
7
|
|
|
|
|
|
|
65
|
|
|
13
|
|
|
|
|
Other income, net
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
(2
|
)
|
|
—
|
|
|
|
|
|
|
|
2,002
|
|
|
2,455
|
|
|
|
|
|
|
7,627
|
|
|
7,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,515
|
|
|
826
|
|
|
|
|
|
|
2,736
|
|
|
2,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from equity investments
|
|
|
160
|
|
|
167
|
|
|
|
|
|
|
708
|
|
|
477
|
|
|
|
|
Loss on impairment of equity investment
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
(270
|
)
|
|
—
|
|
|
|
|
Amortization of excess cost of equity investments
|
|
|
(21
|
)
|
|
(15
|
)
|
|
|
|
|
|
(77
|
)
|
|
(45
|
)
|
|
|
|
Interest, net
|
|
|
(473
|
)
|
|
(459
|
)
|
|
|
|
|
|
(1,456
|
)
|
|
(1,387
|
)
|
|
|
|
Other, net
|
|
|
20
|
|
|
28
|
|
|
|
|
|
|
90
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
1,201
|
|
|
547
|
|
|
|
|
|
|
1,731
|
|
|
1,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(196
|
)
|
|
(160
|
)
|
|
|
|
|
|
(314
|
)
|
|
(622
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
1,005
|
|
|
387
|
|
|
|
|
|
|
1,417
|
|
|
1,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests
|
|
|
(273
|
)
|
|
(14
|
)
|
|
|
|
|
|
(302
|
)
|
|
(26
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Kinder Morgan, Inc.
|
|
|
732
|
|
|
373
|
|
|
|
|
|
|
1,115
|
|
|
1,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
(39
|
)
|
|
(39
|
)
|
|
|
|
|
|
(117
|
)
|
|
(117
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders
|
|
|
$
|
693
|
|
|
$
|
334
|
|
|
|
|
|
|
$
|
998
|
|
|
$
|
1,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class P Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per common share
|
|
|
$
|
0.31
|
|
|
$
|
0.15
|
|
|
|
|
|
|
$
|
0.45
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average common shares outstanding
|
|
|
2,205
|
|
|
2,231
|
|
|
|
|
|
|
2,205
|
|
|
2,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Declared dividend per common share
|
|
|
$
|
0.20
|
|
|
$
|
0.125
|
|
|
|
|
|
|
$
|
0.60
|
|
|
$
|
0.375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per common share (1)
|
|
|
$
|
0.21
|
|
|
$
|
0.15
|
|
|
|
|
|
|
$
|
0.64
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBDA
|
|
|
|
|
|
|
|
%
change
|
|
|
|
|
|
|
|
%
change
|
Natural Gas Pipelines
|
|
|
$
|
976
|
|
|
$
|
884
|
|
|
|
10
|
%
|
|
|
$
|
2,425
|
|
|
$
|
2,846
|
|
|
|
(15
|
)%
|
CO2
|
|
|
205
|
|
|
197
|
|
|
|
4
|
%
|
|
|
561
|
|
|
636
|
|
|
|
(12
|
)%
|
Terminals
|
|
|
301
|
|
|
314
|
|
|
|
(4
|
)%
|
|
|
870
|
|
|
925
|
|
|
|
(6
|
)%
|
Products Pipelines
|
|
|
279
|
|
|
302
|
|
|
|
(8
|
)%
|
|
|
857
|
|
|
913
|
|
|
|
(6
|
)%
|
Kinder Morgan Canada
|
|
|
654
|
|
|
50
|
|
|
|
1,208
|
%
|
|
|
746
|
|
|
136
|
|
|
|
449
|
%
|
Total Segment EBDA
|
|
|
$
|
2,415
|
|
|
$
|
1,747
|
|
|
|
38
|
%
|
|
|
$
|
5,459
|
|
|
$
|
5,456
|
|
|
|
—
|
%
|
|
Note
|
(1)
|
|
|
Adjusted earnings per common share uses adjusted earnings and
applies the same two-class method used in arriving at diluted
earnings per common share. See the following page, Preliminary
Earnings Contribution by Business Segment, for a reconciliation of
net 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
September 30,
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
%
change
|
|
|
2018
|
|
2017
|
|
|
%
change
|
Segment EBDA before certain items (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Pipelines
|
|
|
$
|
1,009
|
|
|
$
|
928
|
|
|
|
9
|
%
|
|
|
$
|
3,092
|
|
|
$
|
2,852
|
|
|
|
8
|
%
|
CO2
|
|
|
233
|
|
|
217
|
|
|
|
7
|
%
|
|
|
691
|
|
|
659
|
|
|
|
5
|
%
|
Terminals
|
|
|
299
|
|
|
296
|
|
|
|
1
|
%
|
|
|
903
|
|
|
897
|
|
|
|
1
|
%
|
Products Pipelines
|
|
|
309
|
|
|
302
|
|
|
|
2
|
%
|
|
|
917
|
|
|
879
|
|
|
|
4
|
%
|
Kinder Morgan Canada
|
|
|
32
|
|
|
50
|
|
|
|
(36
|
)%
|
|
|
124
|
|
|
136
|
|
|
|
(9
|
)%
|
Subtotal
|
|
|
1,882
|
|
|
1,793
|
|
|
|
5
|
%
|
|
|
5,727
|
|
|
5,423
|
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DD&A and amortization of excess investments
|
|
|
(590
|
)
|
|
(577
|
)
|
|
|
|
|
|
(1,787
|
)
|
|
(1,742
|
)
|
|
|
|
General and administrative and corporate charges (1) (2)
|
|
|
(143
|
)
|
|
(159
|
)
|
|
|
|
|
|
(467
|
)
|
|
(482
|
)
|
|
|
|
Interest, net (1)
|
|
|
(473
|
)
|
|
(463
|
)
|
|
|
|
|
|
(1,422
|
)
|
|
(1,408
|
)
|
|
|
|
Subtotal
|
|
|
676
|
|
|
594
|
|
|
|
|
|
|
2,051
|
|
|
1,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book taxes (1)
|
|
|
(151
|
)
|
|
(213
|
)
|
|
|
|
|
|
(463
|
)
|
|
(646
|
)
|
|
|
|
Certain items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value amortization
|
|
|
7
|
|
|
8
|
|
|
|
|
|
|
27
|
|
|
42
|
|
|
|
|
Contract early termination (3)
|
|
|
—
|
|
|
(7
|
)
|
|
|
|
|
|
(1
|
)
|
|
19
|
|
|
|
|
Legal and environmental reserves
|
|
|
(16
|
)
|
|
11
|
|
|
|
|
|
|
(53
|
)
|
|
43
|
|
|
|
|
Change in fair market value of derivative contracts (4)
|
|
|
(47
|
)
|
|
(32
|
)
|
|
|
|
|
|
(190
|
)
|
|
(27
|
)
|
|
|
|
Gains (losses) on divestitures and impairments, net (5)
|
|
|
582
|
|
|
(7
|
)
|
|
|
|
|
|
(208
|
)
|
|
(13
|
)
|
|
|
|
Hurricane damage recoveries, net
|
|
|
1
|
|
|
(9
|
)
|
|
|
|
|
|
25
|
|
|
(9
|
)
|
|
|
|
Refund and reserve adjustment of taxes, other than income taxes
|
|
|
12
|
|
|
—
|
|
|
|
|
|
|
51
|
|
|
—
|
|
|
|
|
Other
|
|
|
(6
|
)
|
|
(11
|
)
|
|
|
|
|
|
(7
|
)
|
|
(9
|
)
|
|
|
|
Noncontrolling interests' portion of certain items
|
|
|
(256
|
)
|
|
—
|
|
|
|
|
|
|
(248
|
)
|
|
(1
|
)
|
|
|
|
Subtotal certain items before tax
|
|
|
277
|
|
|
(47
|
)
|
|
|
|
|
|
(604
|
)
|
|
45
|
|
|
|
|
Book tax certain items
|
|
|
(45
|
)
|
|
53
|
|
|
|
|
|
|
149
|
|
|
24
|
|
|
|
|
Impact of 2017 Tax Cuts and Jobs Act
|
|
|
(8
|
)
|
|
—
|
|
|
|
|
|
|
36
|
|
|
—
|
|
|
|
|
Total certain items
|
|
|
224
|
|
|
6
|
|
|
|
|
|
|
(419
|
)
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests before certain
items (1)
|
|
|
(17
|
)
|
|
(14
|
)
|
|
|
|
|
|
(54
|
)
|
|
(25
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
(39
|
)
|
|
(39
|
)
|
|
|
|
|
|
(117
|
)
|
|
(117
|
)
|
|
|
|
Net income available to common stockholders
|
|
|
$
|
693
|
|
|
$
|
334
|
|
|
|
|
|
|
$
|
998
|
|
|
$
|
1,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders
|
|
|
$
|
693
|
|
|
$
|
334
|
|
|
|
|
|
|
$
|
998
|
|
|
$
|
1,072
|
|
|
|
|
Total certain items
|
|
|
(224
|
)
|
|
(6
|
)
|
|
|
|
|
|
419
|
|
|
(69
|
)
|
|
|
|
Adjusted earnings
|
|
|
469
|
|
|
328
|
|
|
|
|
|
|
1,417
|
|
|
1,003
|
|
|
|
|
DD&A and amortization of excess investments (6)
|
|
|
682
|
|
|
661
|
|
|
|
|
|
|
2,056
|
|
|
2,018
|
|
|
|
|
Total book taxes (7)
|
|
|
169
|
|
|
241
|
|
|
|
|
|
|
512
|
|
|
725
|
|
|
|
|
Cash taxes (8)
|
|
|
(14
|
)
|
|
(9
|
)
|
|
|
|
|
|
(60
|
)
|
|
(54
|
)
|
|
|
|
Other items (9)
|
|
|
(19
|
)
|
|
(10
|
)
|
|
|
|
|
|
3
|
|
|
16
|
|
|
|
|
Sustaining capital expenditures (10)
|
|
|
(194
|
)
|
|
(156
|
)
|
|
|
|
|
|
(471
|
)
|
|
(416
|
)
|
|
|
|
DCF
|
|
|
$
|
1,093
|
|
|
$
|
1,055
|
|
|
|
|
|
|
$
|
3,457
|
|
|
$
|
3,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for dividends (11)
|
|
|
2,218
|
|
|
2,241
|
|
|
|
|
|
|
2,217
|
|
|
2,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DCF per common share
|
|
|
$
|
0.49
|
|
|
$
|
0.47
|
|
|
|
|
|
|
$
|
1.56
|
|
|
$
|
1.47
|
|
|
|
|
Declared dividend per common share
|
|
|
$
|
0.20
|
|
|
$
|
0.125
|
|
|
|
|
|
|
$
|
0.60
|
|
|
$
|
0.375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (12)
|
|
|
$
|
1,857
|
|
|
$
|
1,754
|
|
|
|
6
|
%
|
|
|
$
|
5,606
|
|
|
$
|
5,302
|
|
|
|
6
|
%
|
|
|
Notes ($ million)
|
|
|
|
|
|
(1)
|
|
|
Excludes certain items:
|
|
|
|
3Q 2018 - Natural Gas Pipelines $(33), CO2 $(28), Terminals $2,
Products Pipelines $(30), Kinder Morgan Canada $622, general and
administrative and corporate
|
|
|
|
charges $(8), book tax $(45), noncontrolling interests $(256).
|
|
|
|
3Q 2017 - Natural Gas Pipelines $(44), CO2 $(20), Terminals $18,
general and administrative and corporate charges $(5), interest
expense $4, book tax $53.
|
|
|
|
YTD 2018 - Natural Gas Pipelines $(667), CO2 $(130), Terminals
$(33), Products Pipelines $(60), Kinder Morgan Canada $622, general
and administrative and corporate
|
|
|
|
charges $(18), interest expense $(34), book tax $149, noncontrolling
interests $(248).
|
|
|
|
YTD 2017 - Natural Gas Pipelines $(6), CO2 $(23), Terminals $28,
Products Pipelines $34, general and administrative and corporate
charges $(8), interest expense
|
|
|
|
$21, book tax $24, noncontrolling interests $(1).
|
|
|
|
|
(2)
|
|
|
Includes corporate (benefit) charges:
|
|
|
|
3Q 2018 - $(3)
|
|
|
|
3Q 2017 - $4
|
|
|
|
YTD 2018 - $(6)
|
|
|
|
YTD 2017 - $7
|
|
|
|
General and administrative expense is also net of management fee
revenues from an equity investee:
|
|
|
|
3Q 2017 - $(8)
|
|
|
|
YTD 2017 - $(26)
|
|
|
|
|
(3)
|
|
|
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.
|
|
|
|
|
(4)
|
|
|
Gains or losses are reflected in our DCF when realized.
|
|
|
|
|
(5)
|
|
|
3Q 2018 and YTD 2018 amounts include a $622 million gain on the sale
of TMPL, TMEP, and related assets. YTD 2018 amount also includes (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.
|
|
|
|
|
(6)
|
|
|
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:
|
|
|
|
3Q 2018 - $92
|
|
|
|
3Q 2017 - $84
|
|
|
|
YTD 2018 - $269
|
|
|
|
YTD 2017 - $276
|
|
|
|
|
(7)
|
|
|
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:
|
|
|
|
3Q 2018 - $18
|
|
|
|
3Q 2017 - $28
|
|
|
|
YTD 2018 - $49
|
|
|
|
YTD 2017 - $79
|
|
|
|
|
(8)
|
|
|
Includes KMI's share of taxable equity investees' cash taxes:
|
|
|
|
3Q 2018 - $(12)
|
|
|
|
3Q 2017 - $(9)
|
|
|
|
YTD 2018 - $(50)
|
|
|
|
YTD 2017 - $(54)
|
|
|
|
|
(9)
|
|
|
Includes pension contributions and non-cash compensation associated
with our restricted stock program.
|
|
|
|
|
(10)
|
|
|
Includes KMI's share of certain equity investees' sustaining capital
expenditures (the same equity investees for which DD&A is added
back):
|
|
|
|
3Q 2018 - $(37)
|
|
|
|
3Q 2017 - $(29)
|
|
|
|
YTD 2018 - $(77)
|
|
|
|
YTD 2017 - $(74)
|
|
|
|
|
(11)
|
|
|
Includes restricted stock awards that participate in common share
dividends.
|
|
|
|
|
(12)
|
|
|
Net income is reconciled to Adjusted EBITDA as follows, with any
difference due to rounding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Net income
|
|
|
1,005
|
|
|
387
|
|
|
|
|
|
|
1,417
|
|
|
1,215
|
|
|
|
|
|
|
|
Total certain items
|
|
|
(224
|
)
|
|
(6
|
)
|
|
|
|
|
|
419
|
|
|
(69
|
)
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests (13)
|
|
|
(259
|
)
|
|
(3
|
)
|
|
|
|
|
|
(257
|
)
|
|
(12
|
)
|
|
|
|
|
|
|
DD&A and amortization of excess investments (6) (14)
|
|
|
689
|
|
|
669
|
|
|
|
|
|
|
2,080
|
|
|
2,030
|
|
|
|
|
|
|
|
Book taxes (7) (14)
|
|
|
173
|
|
|
244
|
|
|
|
|
|
|
525
|
|
|
730
|
|
|
|
|
|
|
|
Interest, net (1)
|
|
|
473
|
|
|
463
|
|
|
|
|
|
|
1,422
|
|
|
1,408
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
1,857
|
|
|
$
|
1,754
|
|
|
|
|
|
|
$
|
5,606
|
|
|
$
|
5,302
|
|
|
|
|
|
(13)
|
|
|
Excludes KML noncontrolling interests before certain items:
|
|
|
|
3Q 2018 - $15
|
|
|
|
3Q 2017 - $11
|
|
|
|
YTD 2018 - $45
|
|
|
|
YTD 2017 - $14
|
|
|
|
|
(14)
|
|
|
Includes the noncontrolling interests' portion of KML before certain
items:
|
|
|
|
3Q 2018 - DD&A $7; Book taxes $4
|
|
|
|
3Q 2017 - DD&A $9; Book taxes $3
|
|
|
|
YTD 2018 - DD&A $25; Book taxes $13
|
|
|
|
YTD 2017 - DD&A $12; Book taxes $5
|
|
Volume Highlights
(historical pro forma for acquired and divested assets)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Pipelines
|
|
|
|
|
|
|
|
|
|
|
Transport Volumes (BBtu/d) (1)
|
|
|
32,867
|
|
|
28,879
|
|
|
|
32,234
|
|
|
28,796
|
|
Sales Volumes (BBtu/d) (2)
|
|
|
2,615
|
|
|
2,181
|
|
|
|
2,517
|
|
|
2,329
|
|
Gas Gathering Volumes (BBtu/d) (3)
|
|
|
3,025
|
|
|
2,516
|
|
|
|
2,877
|
|
|
2,629
|
|
Crude/Condensate Gathering Volumes (MBbl/d) (4)
|
|
|
313
|
|
|
271
|
|
|
|
302
|
|
|
268
|
|
|
|
|
|
|
|
|
|
|
|
|
CO2
|
|
|
|
|
|
|
|
|
|
|
Southwest Colorado Production - Gross (Bcf/d) (5)
|
|
|
1.20
|
|
|
1.23
|
|
|
|
1.20
|
|
|
1.29
|
|
Southwest Colorado Production - Net (Bcf/d) (5)
|
|
|
0.55
|
|
|
0.57
|
|
|
|
0.55
|
|
|
0.62
|
|
Sacroc Oil Production - Gross (MBbl/d) (6)
|
|
|
28.68
|
|
|
27.46
|
|
|
|
29.13
|
|
|
27.73
|
|
Sacroc Oil Production - Net (MBbl/d) (7)
|
|
|
23.89
|
|
|
22.87
|
|
|
|
24.26
|
|
|
23.09
|
|
Yates Oil Production - Gross (MBbl/d) (6)
|
|
|
16.54
|
|
|
17.08
|
|
|
|
16.86
|
|
|
17.45
|
|
Yates Oil Production - Net (MBbl/d) (7)
|
|
|
7.49
|
|
|
7.55
|
|
|
|
7.55
|
|
|
7.75
|
|
Katz, Goldsmith, and Tall Cotton Oil Production - Gross (MBbl/d) (6)
|
|
|
7.98
|
|
|
8.36
|
|
|
|
8.23
|
|
|
7.88
|
|
Katz, Goldsmith, and Tall Cotton Oil Production - Net (MBbl/d) (7)
|
|
|
6.83
|
|
|
7.09
|
|
|
|
7.01
|
|
|
6.67
|
|
NGL Sales Volumes (MBbl/d) (8)
|
|
|
10.44
|
|
|
9.64
|
|
|
|
10.22
|
|
|
9.88
|
|
Realized Weighted Average Oil Price per Bbl (9)
|
|
|
$
|
57.96
|
|
|
$
|
58.29
|
|
|
|
$
|
58.59
|
|
|
$
|
58.08
|
|
Realized Weighted Average NGL Price per Bbl
|
|
|
$
|
36.46
|
|
|
$
|
24.70
|
|
|
|
$
|
33.30
|
|
|
$
|
23.89
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminals
|
|
|
|
|
|
|
|
|
|
|
Liquids Leasable Capacity (MMBbl)
|
|
|
89.9
|
|
|
85.6
|
|
|
|
89.9
|
|
|
85.6
|
|
Liquids Utilization %
|
|
|
91.8
|
%
|
|
93.9
|
%
|
|
|
91.8
|
%
|
|
93.9
|
%
|
Bulk Transload Tonnage (MMtons) (10)
|
|
|
16.3
|
|
|
15.5
|
|
|
|
47.6
|
|
|
44.4
|
|
Ethanol (MMBbl)
|
|
|
16.0
|
|
|
17.8
|
|
|
|
47.1
|
|
|
51.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Products Pipelines
|
|
|
|
|
|
|
|
|
|
|
Pacific, Calnev, and CFPL (MBbl/d)
|
|
|
|
|
|
|
|
|
|
|
Gasoline (11)
|
|
|
849
|
|
|
844
|
|
|
|
825
|
|
|
813
|
|
Diesel
|
|
|
324
|
|
|
309
|
|
|
|
308
|
|
|
295
|
|
Jet Fuel
|
|
|
277
|
|
|
268
|
|
|
|
271
|
|
|
265
|
|
Sub-Total Refined Product Volumes - excl. Plantation
|
|
|
1,450
|
|
|
1,421
|
|
|
|
1,404
|
|
|
1,373
|
|
Plantation (MBbl/d) (12)
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
|
217
|
|
|
227
|
|
|
|
218
|
|
|
229
|
|
Diesel
|
|
|
61
|
|
|
55
|
|
|
|
62
|
|
|
52
|
|
Jet Fuel
|
|
|
35
|
|
|
30
|
|
|
|
31
|
|
|
32
|
|
Sub-Total Refined Product Volumes - Plantation
|
|
|
313
|
|
|
312
|
|
|
|
311
|
|
|
313
|
|
Total (MBbl/d)
|
|
|
|
|
|
|
|
|
|
|
Gasoline (11)
|
|
|
1,066
|
|
|
1,071
|
|
|
|
1,043
|
|
|
1,042
|
|
Diesel
|
|
|
385
|
|
|
364
|
|
|
|
370
|
|
|
347
|
|
Jet Fuel
|
|
|
312
|
|
|
298
|
|
|
|
302
|
|
|
297
|
|
Total Refined Product Volumes
|
|
|
1,763
|
|
|
1,733
|
|
|
|
1,715
|
|
|
1,686
|
|
NGLs (MBbl/d) (13)
|
|
|
117
|
|
|
108
|
|
|
|
118
|
|
|
112
|
|
Crude and Condensate (MBbl/d) (14)
|
|
|
327
|
|
|
289
|
|
|
|
335
|
|
|
323
|
|
Total Delivery Volumes (MBbl/d)
|
|
|
2,207
|
|
|
2,130
|
|
|
|
2,168
|
|
|
2,121
|
|
Ethanol (MBbl/d) (15)
|
|
|
132
|
|
|
121
|
|
|
|
127
|
|
|
116
|
|
|
|
|
|
|
|
|
|
|
|
|
Trans Mountain (MMBbl/d - mainline throughput) (16)
|
|
|
292
|
|
|
319
|
|
|
|
291
|
|
|
309
|
|
|
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, 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.
|
(16)
|
|
|
Throughput reported until date of sale, August 31, 2018.
|
|
Kinder Morgan, Inc. and Subsidiaries
Preliminary Consolidated Balance Sheets
(Unaudited)
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
December 31,
|
|
|
|
2018
|
|
|
|
2017
|
ASSETS
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
3,459
|
|
|
|
|
$
|
264
|
|
Other current assets
|
|
|
2,307
|
|
|
|
|
2,451
|
|
Property, plant and equipment, net
|
|
|
37,795
|
|
|
|
|
40,155
|
|
Investments
|
|
|
7,432
|
|
|
|
|
7,298
|
|
Goodwill
|
|
|
21,965
|
|
|
|
|
22,162
|
|
Deferred charges and other assets
|
|
|
6,105
|
|
|
|
|
6,725
|
|
TOTAL ASSETS
|
|
|
$
|
79,063
|
|
|
|
|
$
|
79,055
|
|
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
$
|
2,337
|
|
|
|
|
$
|
2,828
|
|
Other current liabilities
|
|
|
3,152
|
|
|
|
|
3,353
|
|
Long-term debt
|
|
|
34,625
|
|
|
|
|
33,988
|
|
Preferred interest in general partner of KMP
|
|
|
100
|
|
|
|
|
100
|
|
Debt fair value adjustments
|
|
|
543
|
|
|
|
|
927
|
|
Other
|
|
|
2,407
|
|
|
|
|
2,735
|
|
Total liabilities
|
|
|
43,164
|
|
|
|
|
43,931
|
|
|
|
|
|
|
|
|
|
Redeemable Noncontrolling Interest
|
|
|
633
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity
|
|
|
|
|
|
|
|
Other shareholders' equity
|
|
|
33,982
|
|
|
|
|
34,177
|
|
Accumulated other comprehensive loss
|
|
|
(495
|
)
|
|
|
|
(541
|
)
|
KMI equity
|
|
|
33,487
|
|
|
|
|
33,636
|
|
Noncontrolling interests
|
|
|
1,779
|
|
|
|
|
1,488
|
|
Total shareholders' equity
|
|
|
35,266
|
|
|
|
|
35,124
|
|
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
SHAREHOLDERS' EQUITY
|
|
|
$
|
79,063
|
|
|
|
|
$
|
79,055
|
|
|
|
|
|
|
|
|
|
Net Debt (1)
|
|
|
$
|
33,410
|
|
|
|
|
$
|
36,409
|
|
Adjusted Net Debt (2)
|
|
|
34,544
|
|
|
|
|
36,624
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Twelve Months Ended
|
|
|
|
September 30,
|
|
|
|
December 31,
|
Reconciliation of Net Income to Adjusted EBITDA
|
|
|
2018
|
|
|
|
2017
|
Net income
|
|
|
$
|
425
|
|
|
|
|
$
|
223
|
|
Total certain items
|
|
|
1,933
|
|
|
|
|
1,445
|
|
Net income attributable to noncontrolling interests (3)
|
|
|
(258
|
)
|
|
|
|
(12
|
)
|
DD&A and amortization of excess investments (4)
|
|
|
2,755
|
|
|
|
|
2,704
|
|
Income tax expense before certain items (5)
|
|
|
762
|
|
|
|
|
967
|
|
Interest, net before certain items
|
|
|
1,885
|
|
|
|
|
1,871
|
|
Adjusted EBITDA
|
|
|
$
|
7,502
|
|
|
|
|
$
|
7,198
|
|
|
|
|
|
|
|
|
|
Net Debt to Adjusted EBITDA
|
|
|
4.5
|
|
|
|
|
5.1
|
|
Adjusted Net Debt to Adjusted EBITDA
|
|
|
4.6
|
|
|
|
|
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 $93 million and $143
million as of September 30, 2018 and December 31, 2017,
respectively, as we have entered into swaps to convert that debt to
U.S.$.
|
(2)
|
|
|
Amounts include 50% of KML preferred shares, which is included in
noncontrolling interests, of $215 million as of both September 30,
2018 and December 31, 2017. Also, the cash component as of September
30, 2018 has been reduced by $919 million, representing the portion
of cash KML intends to distribute to KML restricted voting
shareholders early in 2019 as a return of capital subject to KML
shareholder approval.
|
(3)
|
|
|
2018 and 2017 amounts exclude KML noncontrolling interests before
certain items of $58 million and $27 million, respectively.
|
(4)
|
|
|
2018 and 2017 amounts include KMI's share of certain equity
investees' DD&A of $388 million and $382 million, respectively.
|
(5)
|
|
|
2018 and 2017 amounts include KMI's share of taxable equity
investees' book taxes before certain items of $93 million and $114
million, respectively.
|