Kinder Morgan 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 157 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.
Focused on stable fee-based assets that are core to North American energy infrastructure with market-leading positions in each segment of our business
Leverage our asset footprint to seek attractive capital investment opportunities, both expansion and acquisition
For more information on Kinder Morgan please refer to our investor presentations, and our SEC filings
Kinder Morgan is focused on cash flow and makes its money typically by charging fees for use of the capacity of its pipelines, terminals and other assets.
We focus on cash flow instead of net income because we believe cash is the best gauge of underlying asset performance. Kinder Morgan’s Distributable Cash Flow (DCF) has historically been an accurate proxy for sustainable cash flow. The main difference between net income and DCF is net income is reduced by GAAP depreciation and DCF is reduced by sustaining capital.
Some believe GAAP depreciation is a good measure for the annual costs needed to maintain assets. We believe a vastly more precise determination of expenses and capital required to maintain safe, reliable, compliant assets can be derived using a project by project, asset by asset bottom-up approach incorporating asset-specific characteristics and current technologies.
There are multiple reasons why sustaining capital is more precise than GAAP depreciation. First, sustaining capital varies greatly by the specific asset characteristics (age of pipe, pipeline diameter, amount of compression, size of compressor units, utilization of the system, number of high-consequence areas on the system, geography, historical maintenance of the pipe, and others). Second, technological advancements have significantly improved and are expected to continue to lower maintenance costs. Third, GAAP depreciation is based on the book value of assets. There can be a meaningful disconnect between book value and actual value of an asset depending on several factors including if an asset has been owned for a long period of time or if it was recently acquired.
It is also important to note that a material amount of the dollars we spend maintaining our assets is recorded as operating expenses, not maintenance capital. “Pipeline integrity” and “third party damage prevention” are two significant maintenance categories for pipelines, and the vast majority of these expenditures are recorded as operating expenses. This includes remediation work involving inspection digs and repair work which might include recoating, sleeving, or the replacement of a pipeline joint. Under GAAP accounting, a substantial amount of pipe must be replaced in order for the work to be capitalized.
Operating expenses and sustaining capital are both deducted in determining DCF. However, GAAP depreciation does not take in to account expenses already incurred to maintain and extend the lives of our assets, despite the fact these expenses are already deducted from operating income.
Kinder Morgan, Inc. filed its IPO and began trading on the New York Stock Exchange (NYSE) on February 10, 2011 under ticker symbol “KMI”
Kinder Morgan Canada Limited began trading on the Toronto Stock Exchange (TSX) after filing its IPO on May 30, 2017 under ticker symbol “KML”
Kinder Morgan Energy Partners, L.P. traded on the New York Stock Exchange (NYSE) from February 18, 1997 until November 26, 2014 under ticker symbol “KMP” (predecessor IPO July 30, 1992 under ticker symbol “ENP”)
Kinder Morgan Management, LLC traded from its IPO on May 14, 2001 until November 26, 2014 on the New York Stock Exchange (NYSE) under ticker symbol “KMR”
El Paso Pipeline Partners, L.P. traded from its IPO on November 15, 2007 until November 26, 2014 on the New York Stock Exchange (NYSE) under ticker symbol “EPB”
KMP (no longer publicly traded) had two 2-for-1 unit splits in its history, one declared on 09/2/1997 and another declared on 07/19/2001
KML effected a 1-for-3 (three shares consolidating to one share) reverse stock split on January 4, 2019
KMI is structured as a C-Corp, and pays a regular cash dividend to its shareholders
KMI dividends may qualify as return of capital for tax purposes. For more dividend tax information, please click here
KMI shareholders receive an annual 1099 pertaining to their dividend income (NO K-1 or UBTI)
Kinder Morgan Inc. does NOT generate a K-1; instead, investors would receive a 1099.
If you own KMI shares through a broker, please contact your brokerage firm for your 1099. If you own KMI shares directly, please contact Computershare to request your 1099
KMI is classified as a corporation for U.S. federal income tax purposes. A distribution of cash by KMI to a stockholder who is a U.S. holder will generally be included in such U.S. holder’s income as ordinary dividend income to the extent of KMI’s current and accumulated ‘‘earnings and profits’’ as determined under U.S. federal income tax laws and regulations (also known as a “qualified dividend” for KMI). A portion of the cash distributed to KMI shareholders by KMI may exceed KMI’s current and accumulated earnings and profits. Distributions of cash in excess of KMI’s current and accumulated earnings and profits will be treated first as a non-taxable return of capital reducing a U.S. holder’s adjusted tax basis in such U.S. holder’s shares of KMI common stock and, to the extent the distribution exceeds such stockholder’s adjusted tax basis, as capital gain from the sale or exchange of such shares of KMI common stock.
For more dividend tax information, please click here
No, Kinder Morgan does not offer a DRIP; however, you can purchase your shares through computershare our transfer agent and establish a DRIP with their service.
Kinder Morgan does not offer a direct investment program and KMI must be bought through a broker or through our transfer agent Computershare.
Computershare: (800) 847-4351
Our fiscal year follows the calendar year; the first quarter ends March 31, second quarter ends June 30, third quarter ends September 30, and fourth quarter ends December 31.
1001 Louisiana Street, Suite 1000 Houston, Texas 77002
You can call KMI Investor Relations at (713) 369-9490 or (800) 324-2900, or email the team at km_ir@kindermorgan.com
KMI investor kit
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The transfer agent for Kinder Morgan is Computershare, who can be contacted at Computershare Website or by calling (800) 847-4351