Kinder Morgan Announces Results for Fourth Quarter of 2020; Maintains $0.2625 Per Share Dividend
KMI is reporting fourth quarter net income attributable to KMI of
“Despite the pandemic’s continued drag on the economy and on energy demand, our company weathered the fourth quarter well, producing substantial earnings as expected and robust coverage of this quarter’s dividend,” said KMI Executive Chairman
“Our assets continue to provide strong cash flow and our corporate philosophy remains sound: fund our capital needs internally, maintain a healthy balance sheet, and return excess cash to our shareholders through dividend increases and/or share repurchases. As noted in our December financial guidance, the board expects to increase the dividend by 3% for 2021, to
“We are optimistic that the
“I remain extremely proud of our employees, who throughout a trying year kept their focus on their work providing essential energy services for businesses and consumers,” Kean concluded.
“We generated fourth quarter earnings per share of
“One of the major highlights of the quarter was completing construction of the Permian Highway Pipeline, which went into full commercial service on
For the full year 2020, KMI reported net income attributable to KMI of
2021 Outlook
For 2021, KMI’s budget contemplates
As of
Overview of Business Segments
“The Natural Gas Pipelines segment’s financial performance was down for the fourth quarter of 2020 relative to the fourth quarter of 2019,” said Dang. “The segment experienced lower contributions from multiple gathering and processing assets due to sharply reduced natural gas production and from the sale of the
Natural gas transport volumes were down 2% compared to the fourth quarter of 2019, with notable volume declines on Colorado Interstate Gas Pipeline and Wyoming Interstate Pipeline due to the production declines in the Rockies basin, and on
“Continued low refined products demand and lower crude and condensate volumes during the fourth quarter reduced contributions from the Products Pipelines segment,” Dang said. “Crude and condensate pipeline volumes were down 26% and total refined products volumes were down 13% compared to the fourth quarter of 2019. Gasoline volumes were below the comparable period last year by 10% and jet volumes were still very weak (down 47%) but diesel volumes were strong, 7% above the fourth quarter of 2019.
“Terminals segment earnings were essentially flat compared to the fourth quarter of 2019 after adjusting for the impact of the
“CO2 segment earnings were down compared to the fourth quarter of 2019 due to lower CO2 sales volumes and lower crude production, partially offset by lower operating expenditures and higher realized crude prices. Our realized weighted average crude oil price for the quarter was up 11% at
Other News
Corporate
-
In early
January 2021 , KMI repaid the$750 million principal amount of 3.50% senior notes due inMarch 2021 .
Natural Gas Pipelines
-
The Permian Highway Pipeline (PHP) was placed in full commercial service on
January 1, 2021 . The approximately$2 billion pipeline is designed to transport up to 2.1 billion cubic feet per day (Bcf/d) of natural gas through approximately 430 miles of 42-inch pipeline from the Waha area toU.S. Gulf Coast andMexico markets. PHP is fully subscribed under long-term, firm transportation agreements. Kinder Morgan Texas Pipeline (KMTP), EagleClaw Midstream and Altus Midstream each hold an ownership interest of approximately 26.7%, and an affiliate of an anchor shipper has a 20% interest. KMTP operates the pipeline. -
KMI’s Crossover II project was placed in service on
November 6, 2020 . The approximately$260 million expansion project increases the delivery capacity on ourTexas intrastate system by 1.4 Bcf/d. This expansion capacity serves LNG, industrial, electric generation and local distribution company expansions along theTexas Gulf Coast .
-
Kinder Morgan Louisiana Pipeline began construction on its approximately$145 million Acadiana expansion project to provide 945,000 dekatherms per day (Dth/d) of capacity to serve Train 6 at Cheniere’sSabine Pass Liquefaction facility inCameron Parish, Louisiana . The project is anticipated to be placed into commercial service as early as the first quarter of 2022.
-
Construction continues on NGPL’s Gulf Coast Southbound project. In mid-December, NGPL placed compressor stations 300 and 301 into service ahead of schedule. The full project is expected to be placed into service in the first quarter of 2021 and is supported by a long-term take-or-pay contract. The approximately
$203 million project (KMI’s share:$101.5 million ) will increase southbound capacity on NGPL’s Gulf Coast System by approximately 300,000 Dth/d to serve Cheniere’s Corpus Christi Liquefaction facility inSan Patricio County, Texas .
Terminals
-
In the fourth quarter of 2020, KMI closed on the sale of its idled three million barrel petroleum storage facility in
Staten Island, NY . The approximately 250-acre site was sold to affiliates ofNorthPoint Development, LLC (NorthPoint), aKansas City, Missouri -based industrial real estate developer, for gross proceeds of$85 million . As part of the sale, NorthPoint assumed the costs and lead responsibility for site investigation and remediation obligations. -
KMI’s Class A Preferred Shares and Class
C Common Shares inWatco Companies L.L.C (Watco) were redeemed in the fourth quarter of 2020 for total gross proceeds of approximately$125 million . KMI remains invested in Watco, one of the largest short-line rail operators inNorth America , through its Class B Convertible Preferred Shares. -
Major elements of the butane-on-demand blending system at KMI’s
Galena Park Terminal , including the construction of a 30,000-barrel butane sphere and a new inbound C4 pipeline connection, were successfully completed and placed in service in the fourth quarter of 2020. The balance of the work, including tank and piping modifications to extend butane blending capabilities to 25 tanks, two ship docks, and six cross-channel pipelines, is expected to be complete in the first quarter of 2021. The approximately$52 million project is supported by a long-term agreement with an investment-grade midstream company. -
Construction is complete on an expansion of KMI’s market-leading Argo ethanol hub. The project, which spans both the Argo and Chicago Liquids facilities, included the addition of 105,000 barrels of ethanol storage capacity and enhancements to the system’s rail loading, rail unloading and barge loading capabilities. The approximately
$18 million project improved the system’s inbound and outbound modal balances, adding greater product-clearing efficiencies to this industry-critical pricing and liquidity hub. -
Construction is complete on a facility upgrade at the
Battleground Oil Specialty Terminal Company LLC (BOSTCO) terminal, a leading fuel oil storage terminal on the Houston Ship Channel. The approximately$17 million project added piping to allow for segregation of high sulfur and low sulfur fuel oils. KMI owns a 55% interest in and is the operator of BOSTCO.
CO2
- The CO2 segment remained focused on production optimization, project execution and continuous operational improvement. As a result of these actions, the CO2 segment’s 2020 Free Cash Flow exceeded budget expectations.
Please join
Non-GAAP Financial Measures
The non-generally accepted accounting principles (non-GAAP) financial measures of Adjusted Earnings and distributable cash flow (DCF), both in the aggregate and per share for each; segment earnings before depreciation, depletion, amortization (DD&A), amortization of excess cost of equity investments and Certain Items (Adjusted Segment EBDA); net income before interest expense, income taxes, DD&A, amortization of excess cost of equity investments and Certain Items (Adjusted EBITDA); Net Debt; Net Debt-to-Adjusted EBITDA; and Free Cash Flow in relation to our CO2 segment are presented herein.
Our non-GAAP financial measures described below should not be considered alternatives to GAAP net income (loss) or other GAAP measures and have important limitations as analytical tools. Our computations of these non-GAAP financial measures may differ from similarly titled measures used by others. You should not consider these non-GAAP financial measures in isolation or as substitutes for an analysis of our results as reported under GAAP. Management compensates for the limitations of these non-GAAP financial 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.
Certain Items, as adjustments used to calculate our non-GAAP financial measures, are items that are required by GAAP to be reflected in net income (loss), 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). We also include adjustments related to joint ventures (see “Amounts from Joint Ventures” below and the accompanying Tables 4 and 7.)
Adjusted Earnings is calculated by adjusting net income attributable to
DCF is calculated by adjusting net income attributable to
Adjusted Segment EBDA is calculated by adjusting segment earnings before DD&A and amortization of excess cost of equity investments (Segment EBDA) for Certain Items attributable to the segment. Adjusted Segment EBDA is used by management in its analysis of segment performance and management of our business. General and administrative expenses and certain corporate charges 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 Adjusted Segment EBDA is a useful performance metric because it provides management and external users of our financial statements additional insight into the ability of our segments to generate 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 Adjusted Segment EBDA is Segment EBDA. (See the accompanying Tables 3 and 7.)
Adjusted EBITDA is calculated by adjusting net income before interest expense, income taxes, DD&A, and amortization of excess cost of equity investments (EBITDA) for Certain Items. We also include amounts from joint ventures for income taxes and DD&A (see “Amounts from Joint Ventures” below). Adjusted EBITDA is used by management and external users, in conjunction with our Net Debt (as described further below), 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. (See the accompanying Tables 3 and 4.)
Amounts from Joint Ventures - Certain Items, DCF and Adjusted EBITDA reflect amounts from unconsolidated joint ventures (JVs) and consolidated JVs utilizing the same recognition and measurement methods used to record “Earnings from equity investments” and “Noncontrolling interests (NCI),” respectively. The calculations of DCF and Adjusted EBITDA related to our unconsolidated and consolidated JVs include the same items (DD&A and income tax expense, and for DCF only, also cash taxes and sustaining capital expenditures) with respect to the JVs as those included in the calculations of DCF and Adjusted EBITDA for our wholly-owned consolidated subsidiaries. (See Table 7, Additional JV Information.) Although these amounts related to our unconsolidated JVs are included in the calculations of DCF and Adjusted EBITDA, such inclusion should not be understood to imply that we have control over the operations and resulting revenues, expenses or cash flows of such unconsolidated JVs. DCF and Adjusted EBITDA are further adjusted for certain KML activities attributable to our noncontrolling interests in KML for the periods presented through KML’s sale on
Net Debt is calculated by subtracting from debt (1) cash and cash equivalents, (2) the preferred interest in the general partner of
Free Cash Flow, as used in relation to our CO2 segment, is calculated by reducing Segment EBDA (GAAP) by Certain Items and capital expenditures (sustaining and expansion). Management uses Free Cash Flow as an additional performance measure for our CO2 segment. We believe the GAAP measure most directly comparable to Free Cash Flow is Segment EBDA (GAAP). (See the accompanying Table 7.)
Our guidance for 2021 includes a forecast of net income attributable to KMI, which we previously have not provided due to the impracticability of predicting certain components of net income required by GAAP. As a result of changes to GAAP rules and guidance and our 2019 sale of
Important Information Relating to Forward-Looking Statements
This news release includes forward-looking statements within the meaning of the
Table 1 |
|||||||||||||||||||||
|
|||||||||||||||||||||
Preliminary Consolidated Statements of Income |
|||||||||||||||||||||
(In millions, except per share amounts, unaudited) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended
|
|
%
|
|
Year Ended
|
|
%
|
||||||||||||||
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
||||||||||||
Revenues |
$ |
3,115 |
|
|
$ |
3,352 |
|
|
|
|
$ |
11,700 |
|
|
$ |
13,209 |
|
|
|
||
Operating costs, expenses and other |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs of sales |
|
786 |
|
|
|
776 |
|
|
|
|
|
2,545 |
|
|
|
3,263 |
|
|
|
||
Operations and maintenance |
|
606 |
|
|
|
679 |
|
|
|
|
|
2,475 |
|
|
|
2,591 |
|
|
|
||
Depreciation, depletion and amortization |
|
528 |
|
|
|
661 |
|
|
|
|
|
2,164 |
|
|
|
2,411 |
|
|
|
||
General and administrative |
|
187 |
|
|
|
134 |
|
|
|
|
|
648 |
|
|
|
590 |
|
|
|
||
Taxes, other than income taxes |
|
83 |
|
|
|
102 |
|
|
|
|
|
378 |
|
|
|
426 |
|
|
|
||
(Gain) loss on divestitures and impairments, net |
|
(55 |
) |
|
|
(929 |
) |
|
|
|
|
1,932 |
|
|
|
(942 |
) |
|
|
||
Other income, net |
|
— |
|
|
|
(2 |
) |
|
|
|
|
(2 |
) |
|
|
(3 |
) |
|
|
||
Total operating costs, expenses and other |
|
2,135 |
|
|
|
1,421 |
|
|
|
|
|
10,140 |
|
|
|
8,336 |
|
|
|
||
Operating income |
|
980 |
|
|
|
1,931 |
|
|
|
|
|
1,560 |
|
|
|
4,873 |
|
|
|
||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) from equity investments |
|
218 |
|
|
|
(425 |
) |
|
|
|
|
780 |
|
|
|
101 |
|
|
|
||
Amortization of excess cost of equity investments |
|
(41 |
) |
|
|
(22 |
) |
|
|
|
|
(140 |
) |
|
|
(83 |
) |
|
|
||
Interest, net |
|
(381 |
) |
|
|
(442 |
) |
|
|
|
|
(1,595 |
) |
|
|
(1,801 |
) |
|
|
||
Other, net |
|
24 |
|
|
|
40 |
|
|
|
|
|
56 |
|
|
|
75 |
|
|
|
||
Income before income taxes |
|
800 |
|
|
|
1,082 |
|
|
|
|
|
661 |
|
|
|
3,165 |
|
|
|
||
Income tax expense |
|
(177 |
) |
|
|
(455 |
) |
|
|
|
|
(481 |
) |
|
|
(926 |
) |
|
|
||
Net income |
|
623 |
|
|
|
627 |
|
|
|
|
|
180 |
|
|
|
2,239 |
|
|
|
||
Net income attributable to NCI |
|
(16 |
) |
|
|
(17 |
) |
|
|
|
|
(61 |
) |
|
|
(49 |
) |
|
|
||
Net income attributable to |
$ |
607 |
|
|
$ |
610 |
|
|
|
|
|
119 |
|
|
|
2,190 |
|
|
|
||
Class |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted earnings per share |
$ |
0.27 |
|
|
$ |
0.27 |
|
|
— |
% |
|
$ |
0.05 |
|
|
$ |
0.96 |
|
|
(95 |
)% |
Basic and diluted weighted average shares outstanding |
|
2,264 |
|
|
|
2,265 |
|
|
— |
% |
|
|
2,263 |
|
|
|
2,264 |
|
|
— |
% |
Declared dividends per share |
$ |
0.2625 |
|
|
$ |
0.25 |
|
|
5 |
% |
|
$ |
1.05 |
|
|
$ |
1.00 |
|
|
5 |
% |
Adjusted Earnings (1) |
$ |
604 |
|
|
$ |
589 |
|
|
3 |
% |
|
$ |
2,011 |
|
|
$ |
2,161 |
|
|
(7 |
)% |
Adjusted Earnings per share (1) |
$ |
0.27 |
|
|
$ |
0.26 |
|
|
4 |
% |
|
$ |
0.88 |
|
|
$ |
0.95 |
|
|
(7 |
)% |
Note |
||
(1) |
Adjusted Earnings is Net income attributable to |
Table 2 |
|||||||||||||||||||||
|
|||||||||||||||||||||
Preliminary Net Income attributable to |
|||||||||||||||||||||
(In millions, unaudited) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended
|
|
%
|
|
Year Ended
|
|
%
|
||||||||||||||
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
||||||||||||
Net income attributable to |
$ |
607 |
|
|
$ |
610 |
|
|
|
|
$ |
119 |
|
|
$ |
2,190 |
|
|
|
||
Total Certain Items |
|
(3 |
) |
|
|
(21 |
) |
|
|
|
|
1,892 |
|
|
|
(29 |
) |
|
|
||
Adjusted Earnings (1) |
|
604 |
|
|
|
589 |
|
|
3 |
% |
|
|
2,011 |
|
|
|
2,161 |
|
|
(7 |
)% |
DD&A and amortization of excess cost of equity investments for DCF (2) |
|
659 |
|
|
|
774 |
|
|
|
|
|
2,671 |
|
|
|
2,867 |
|
|
|
||
Income tax expense for DCF (1)(2) |
|
186 |
|
|
|
193 |
|
|
|
|
|
670 |
|
|
|
714 |
|
|
|
||
Cash taxes (3) |
|
(11 |
) |
|
|
(14 |
) |
|
|
|
|
(68 |
) |
|
|
(90 |
) |
|
|
||
Sustaining capital expenditures (3) |
|
(181 |
) |
|
|
(211 |
) |
|
|
|
|
(658 |
) |
|
|
(688 |
) |
|
|
||
Other items (4) |
|
(7 |
) |
|
|
23 |
|
|
|
|
|
(29 |
) |
|
|
29 |
|
|
|
||
DCF |
$ |
1,250 |
|
|
$ |
1,354 |
|
|
(8 |
)% |
|
$ |
4,597 |
|
|
$ |
4,993 |
|
|
(8 |
)% |
Table 3 |
|||||||||||||||||||||
|
|||||||||||||||||||||
Preliminary Adjusted Segment EBDA, Adjusted EBITDA and DCF |
|||||||||||||||||||||
(In millions, except per share amounts, unaudited) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended
|
|
%
|
|
Year Ended
|
|
%
|
||||||||||||||
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
||||||||||||
Natural Gas Pipelines |
$ |
1,189 |
|
|
$ |
1,248 |
|
|
(5 |
)% |
|
$ |
4,466 |
|
|
$ |
4,610 |
|
|
(3 |
)% |
Products Pipelines |
|
258 |
|
|
|
322 |
|
|
(20 |
)% |
|
|
1,027 |
|
|
|
1,258 |
|
|
(18 |
)% |
Terminals |
|
258 |
|
|
|
290 |
|
|
(11 |
)% |
|
|
990 |
|
|
|
1,174 |
|
|
(16 |
)% |
CO2 |
|
167 |
|
|
|
185 |
|
|
(10 |
)% |
|
|
652 |
|
|
|
707 |
|
|
(8 |
)% |
Adjusted Segment EBDA (1) |
|
1,872 |
|
|
|
2,045 |
|
|
(8 |
)% |
|
|
7,135 |
|
|
|
7,749 |
|
|
(8 |
)% |
General and administrative and corporate charges (1) |
|
(125 |
) |
|
|
(131 |
) |
|
|
|
|
(561 |
) |
|
|
(598 |
) |
|
|
||
JV DD&A and income tax expense (1)(5) |
|
106 |
|
|
|
119 |
|
|
|
|
|
449 |
|
|
|
487 |
|
|
|
||
Net income attributable to NCI (net of KML NCI and Certain Items) (1) |
|
(16 |
) |
|
|
(13 |
) |
|
|
|
|
(61 |
) |
|
|
(20 |
) |
|
|
||
Adjusted EBITDA |
|
1,837 |
|
|
|
2,020 |
|
|
(9 |
)% |
|
|
6,962 |
|
|
|
7,618 |
|
|
(9 |
)% |
Interest, net (1) |
|
(388 |
) |
|
|
(451 |
) |
|
|
|
|
(1,610 |
) |
|
|
(1,816 |
) |
|
|
||
Cash taxes (3) |
|
(11 |
) |
|
|
(14 |
) |
|
|
|
|
(68 |
) |
|
|
(90 |
) |
|
|
||
Sustaining capital expenditures (3) |
|
(181 |
) |
|
|
(211 |
) |
|
|
|
|
(658 |
) |
|
|
(688 |
) |
|
|
||
KML NCI DCF adjustments (6) |
|
— |
|
|
|
(13 |
) |
|
|
|
|
— |
|
|
|
(60 |
) |
|
|
||
Other items (4) |
|
(7 |
) |
|
|
23 |
|
|
|
|
|
(29 |
) |
|
|
29 |
|
|
|
||
DCF |
$ |
1,250 |
|
|
$ |
1,354 |
|
|
(8 |
)% |
|
$ |
4,597 |
|
|
$ |
4,993 |
|
|
(8 |
)% |
Weighted average shares outstanding for dividends (7) |
|
2,277 |
|
|
|
2,277 |
|
|
|
|
|
2,276 |
|
|
|
2,276 |
|
|
|
||
DCF per share |
$ |
0.55 |
|
|
$ |
0.59 |
|
|
|
|
$ |
2.02 |
|
|
$ |
2.19 |
|
|
|
||
Declared dividends per share |
$ |
0.2625 |
|
|
$ |
0.25 |
|
|
|
|
$ |
1.05 |
|
|
$ |
1.00 |
|
|
|
Notes |
||
(1) |
Amounts are adjusted for Certain Items. See Tables 4 and 7 for more information. |
|
(2) |
Includes DD&A or income tax expense, as applicable, from JVs. 2019 amounts are also net of DD&A or income tax expense attributable to KML NCI. See Table 7 for more information. |
|
(3) |
Includes cash taxes or sustaining capital expenditures, as applicable, from JVs. See Table 7 for more information. |
|
(4) |
Includes pension contributions and non-cash pension expense, and non-cash compensation associated with our restricted stock program. |
|
(5) |
Represents JV DD&A and income tax expense. See Table 7 for more information. |
|
(6) |
2019 amounts represent the combined net income, DD&A and income tax expense adjusted for Certain Items, as applicable, attributable to KML NCI. See Table 7 for more information. |
|
(7) |
Includes restricted stock awards that participate in dividends. |
Table 4 |
|||||||||||||||||||||
|
|||||||||||||||||||||
Preliminary Net Income to Adjusted EBITDA Reconciliation |
|||||||||||||||||||||
(In millions, unaudited) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended
|
|
%
|
|
Year Ended
|
|
%
|
||||||||||||||
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
||||||||||||
Net income (GAAP) |
$ |
623 |
|
|
$ |
627 |
|
|
(1 |
)% |
|
$ |
180 |
|
|
$ |
2,239 |
|
|
(92 |
)% |
Certain Items: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value amortization |
|
(4 |
) |
|
|
(7 |
) |
|
|
|
|
(21 |
) |
|
|
(29 |
) |
|
|
||
Legal, environmental and taxes other than income tax reserves |
|
(12 |
) |
|
|
18 |
|
|
|
|
|
26 |
|
|
|
46 |
|
|
|
||
Change in fair value of derivative contracts (1) |
|
5 |
|
|
|
(2 |
) |
|
|
|
|
(5 |
) |
|
|
(24 |
) |
|
|
||
(Gain) loss on divestitures and impairments, net (2) |
|
(55 |
) |
|
|
(275 |
) |
|
|
|
|
327 |
|
|
|
(280 |
) |
|
|
||
Loss on impairment of goodwill (3) |
|
— |
|
|
|
— |
|
|
|
|
|
1,600 |
|
|
|
— |
|
|
|
||
Restricted stock accelerated vesting and severance |
|
52 |
|
|
|
— |
|
|
|
|
|
52 |
|
|
|
— |
|
|
|
||
COVID-19 costs |
|
4 |
|
|
|
— |
|
|
|
|
|
15 |
|
|
|
— |
|
|
|
||
Income tax Certain Items |
|
7 |
|
|
|
284 |
|
|
|
|
|
(107 |
) |
|
|
299 |
|
|
|
||
NCI associated with Certain Items |
|
— |
|
|
|
(3 |
) |
|
|
|
|
— |
|
|
|
(4 |
) |
|
|
||
Other |
|
— |
|
|
|
(36 |
) |
|
|
|
|
5 |
|
|
|
(37 |
) |
|
|
||
Total Certain Items (4) |
|
(3 |
) |
|
|
(21 |
) |
|
|
|
|
1,892 |
|
|
|
(29 |
) |
|
|
||
DD&A and amortization of excess cost of equity investments |
|
569 |
|
|
|
683 |
|
|
|
|
|
2,304 |
|
|
|
2,494 |
|
|
|
||
Income tax expense (5) |
|
170 |
|
|
|
171 |
|
|
|
|
|
588 |
|
|
|
627 |
|
|
|
||
JV DD&A and income tax expense (5)(6) |
|
106 |
|
|
|
119 |
|
|
|
|
|
449 |
|
|
|
487 |
|
|
|
||
Interest, net (5) |
|
388 |
|
|
|
451 |
|
|
|
|
|
1,610 |
|
|
|
1,816 |
|
|
|
||
Net income attributable to NCI (net of KML NCI (5)) |
|
(16 |
) |
|
|
(10 |
) |
|
|
|
|
(61 |
) |
|
|
(16 |
) |
|
|
||
Adjusted EBITDA |
$ |
1,837 |
|
|
$ |
2,020 |
|
|
(9 |
)% |
|
$ |
6,962 |
|
|
$ |
7,618 |
|
|
(9 |
)% |
Notes |
|
|
|
|
|
|
||
(1) |
Gains or losses are reflected in our DCF when realized. |
|||||||
(2) |
Year ended |
|||||||
(3) |
Year ended |
|||||||
(4) |
Three months ended |
|||||||
(5) |
Amounts are adjusted for Certain Items. See Table 7 for more information. |
|||||||
(6) |
Represents JV DD&A and income tax expense. See Table 7 for more information. |
Table 5 |
|||||||||||||||
Volume and CO2 Segment Hedges Highlights |
|||||||||||||||
(Historical pro forma for acquired and divested assets, JV volumes at KMI share) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Natural Gas Pipelines |
|
|
|
|
|
|
|
||||||||
Transport volumes (BBtu/d) |
38,664 |
|
|
39,272 |
|
|
37,487 |
|
|
36,793 |
|
||||
Sales volumes (BBtu/d) |
2,421 |
|
|
2,374 |
|
|
2,353 |
|
|
2,420 |
|
||||
Gathering volumes (BBtu/d) |
2,829 |
|
|
3,521 |
|
|
3,039 |
|
|
3,382 |
|
||||
NGLs (MBbl/d) (1) |
27 |
|
|
31 |
|
|
27 |
|
|
32 |
|
||||
Products Pipelines (MBbl/d) |
|
|
|
|
|
|
|
||||||||
Gasoline (2) |
922 |
|
|
1,029 |
|
|
897 |
|
|
1,041 |
|
||||
Diesel fuel |
389 |
|
|
363 |
|
|
375 |
|
|
368 |
|
||||
Jet fuel |
165 |
|
|
311 |
|
|
179 |
|
|
306 |
|
||||
Total refined product volumes |
1,476 |
|
|
1,703 |
|
|
1,451 |
|
|
1,715 |
|
||||
Crude and condensate |
498 |
|
|
671 |
|
|
552 |
|
|
651 |
|
||||
Total delivery volumes (MBbl/d) |
1,974 |
|
|
2,374 |
|
|
2,003 |
|
|
2,366 |
|
||||
Terminals (1) |
|
|
|
|
|
|
|
||||||||
Liquids leasable capacity (MMBbl) |
79.7 |
|
|
79.7 |
|
|
79.7 |
|
|
79.7 |
|
||||
Liquids utilization % |
95.3 |
% |
|
93.2 |
% |
|
95.3 |
% |
|
93.2 |
% |
||||
Bulk transload tonnage (MMtons) |
12.6 |
|
|
13.3 |
|
|
48.0 |
|
|
55.3 |
|
||||
CO2 |
|
|
|
|
|
|
|
||||||||
SACROC oil production |
20.93 |
|
|
23.50 |
|
|
21.83 |
|
|
23.90 |
|
||||
|
6.37 |
|
|
7.48 |
|
|
6.61 |
|
|
7.19 |
|
||||
Katz and Goldsmith oil production |
2.57 |
|
|
3.60 |
|
|
2.75 |
|
|
3.79 |
|
||||
Tall Cotton oil production |
1.16 |
|
|
2.25 |
|
|
1.69 |
|
|
2.33 |
|
||||
Total oil production - net (MBbl/d) (3) |
31.03 |
|
|
36.83 |
|
|
32.88 |
|
|
37.21 |
|
||||
NGL sales volumes - net (MBbl/d) (3) |
9.67 |
|
|
9.79 |
|
|
9.49 |
|
|
10.10 |
|
||||
CO2 sales volumes - net (Bcf/d) |
0.39 |
|
|
0.60 |
|
|
0.44 |
|
|
0.61 |
|
||||
Realized weighted average oil price ($ per Bbl) |
$ |
55.41 |
|
|
$ |
49.90 |
|
|
$ |
53.78 |
|
|
$ |
49.49 |
|
Realized weighted average NGL price ($ per Bbl) |
$ |
18.45 |
|
|
$ |
23.34 |
|
|
$ |
17.95 |
|
|
$ |
23.49 |
|
CO2 Segment Hedges |
2021 |
|
2022 |
|
2023 |
|
2024 |
||||||||
Crude Oil (4) |
|
|
|
|
|
|
|
||||||||
Price ($ per Bbl) |
$ |
50.37 |
|
|
$ |
50.98 |
|
|
$ |
49.78 |
|
|
$ |
43.50 |
|
Volume (MBbl/d) |
25.70 |
|
|
10.80 |
|
|
5.45 |
|
|
1.55 |
|
||||
NGLs |
|
|
|
|
|
|
|
||||||||
Price ($ per Bbl) |
$ |
29.26 |
|
|
|
|
|
|
|
||||||
Volume (MBbl/d) |
4.24 |
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||
Price ($ per Bbl) |
$ |
0.26 |
|
|
|
|
|
|
|
||||||
Volume (MBbl/d) |
24.55 |
|
|
|
|
|
|
|
Notes |
||
(1) |
Volumes for assets sold are excluded for all periods presented. |
|
(2) |
Gasoline volumes include ethanol pipeline volumes. |
|
(3) |
Net of royalties and outside working interests. |
|
(4) |
Includes West Texas Intermediate hedges. |
Table 6 |
|||||||
|
|||||||
Preliminary Consolidated Balance Sheets |
|||||||
(In millions, unaudited) |
|||||||
|
|
|
|
||||
|
|
|
|
||||
|
2020 |
|
2019 |
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
1,184 |
|
|
$ |
185 |
|
Other current assets |
|
2,019 |
|
|
|
3,053 |
|
Property, plant and equipment, net |
|
35,836 |
|
|
|
36,419 |
|
Investments |
|
7,917 |
|
|
|
7,759 |
|
|
|
19,851 |
|
|
|
21,451 |
|
Deferred charges and other assets |
|
5,166 |
|
|
|
5,290 |
|
Total assets |
$ |
71,973 |
|
|
$ |
74,157 |
|
Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity |
|
|
|
||||
Short-term debt |
$ |
2,558 |
|
|
$ |
2,377 |
|
Preferred interest in general partner of KMP |
|
— |
|
|
|
100 |
|
Other current liabilities |
|
2,516 |
|
|
|
2,623 |
|
Long-term debt |
|
30,838 |
|
|
|
30,883 |
|
Debt fair value adjustments |
|
1,293 |
|
|
|
1,032 |
|
Other |
|
2,202 |
|
|
|
2,253 |
|
Total liabilities |
|
39,407 |
|
|
|
39,268 |
|
Redeemable Noncontrolling Interest |
|
728 |
|
|
|
803 |
|
Other shareholders' equity |
|
31,843 |
|
|
|
34,075 |
|
Accumulated other comprehensive loss |
|
(407 |
) |
|
|
(333 |
) |
KMI equity |
|
31,436 |
|
|
|
33,742 |
|
Noncontrolling interests |
|
402 |
|
|
|
344 |
|
Total shareholders' equity |
|
31,838 |
|
|
|
34,086 |
|
Total liabilities, redeemable noncontrolling interest and shareholders' equity |
$ |
71,973 |
|
|
$ |
74,157 |
|
|
|
|
|
||||
Net Debt (1) |
$ |
32,042 |
|
|
$ |
33,031 |
|
|
|
|
|
||||
|
Adjusted EBITDA Twelve Months Ended |
||||||
|
|
|
|
||||
Reconciliation of Net Income to Adjusted EBITDA |
2020 |
|
2019 |
||||
Net income (GAAP) |
$ |
180 |
|
|
$ |
2,239 |
|
Total Certain Items |
|
1,892 |
|
|
|
(29 |
) |
Net income attributable to NCI (net of KML NCI) (2) |
|
(61 |
) |
|
|
(16 |
) |
DD&A and amortization of excess cost of equity investments |
|
2,304 |
|
|
|
2,494 |
|
Income tax expense (3) |
|
588 |
|
|
|
627 |
|
JV DD&A and income tax expense (3)(4) |
|
449 |
|
|
|
487 |
|
Interest, net (3) |
|
1,610 |
|
|
|
1,816 |
|
Adjusted EBITDA |
$ |
6,962 |
|
|
$ |
7,618 |
|
|
|
|
|
||||
Net Debt-to-Adjusted EBITDA |
|
4.6 |
|
|
|
4.3 |
|
Notes |
||
(1) |
Amounts exclude: (i) the preferred interest in general partner of KMP (which was redeemed in |
|
(2) |
2019 amount is net of KML NCI, for the period through its |
|
(3) |
Amounts are adjusted for Certain Items. See Table 4 for more information. |
|
(4) |
Represents JV DD&A and income tax expense. See Table 7 for more information. |
Table 7 |
|||||||||||||||
|
|||||||||||||||
Preliminary Supplemental Information |
|||||||||||||||
(In millions, unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Segment EBDA |
|
|
|
|
|
|
|
||||||||
Natural Gas Pipelines (GAAP) |
$ |
1,199 |
|
|
$ |
1,278 |
|
|
$ |
3,483 |
|
|
$ |
4,661 |
|
Certain Items |
|
(10 |
) |
|
|
(30 |
) |
|
|
983 |
|
|
|
(51 |
) |
Natural Gas Pipelines Adjusted Segment EBDA |
|
1,189 |
|
|
|
1,248 |
|
|
|
4,466 |
|
|
|
4,610 |
|
Products Pipelines (GAAP) |
|
258 |
|
|
|
317 |
|
|
|
977 |
|
|
|
1,225 |
|
Certain Items |
|
— |
|
|
|
5 |
|
|
|
50 |
|
|
|
33 |
|
Products Pipelines Adjusted Segment EBDA |
|
258 |
|
|
|
322 |
|
|
|
1,027 |
|
|
|
1,258 |
|
Terminals (GAAP) |
|
313 |
|
|
|
622 |
|
|
|
1,045 |
|
|
|
1,506 |
|
Certain Items |
|
(55 |
) |
|
|
(332 |
) |
|
|
(55 |
) |
|
|
(332 |
) |
Terminals Adjusted Segment EBDA |
|
258 |
|
|
|
290 |
|
|
|
990 |
|
|
|
1,174 |
|
CO2 (GAAP) |
|
161 |
|
|
|
123 |
|
|
|
(292 |
) |
|
|
681 |
|
Certain Items |
|
6 |
|
|
|
62 |
|
|
|
944 |
|
|
|
26 |
|
CO2 Adjusted Segment EBDA |
|
167 |
|
|
|
185 |
|
|
|
652 |
|
|
|
707 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Certain Items |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
Kinder Morgan Canada Adjusted Segment EBDA |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total Segment EBDA (GAAP) |
|
1,931 |
|
|
|
2,340 |
|
|
|
5,213 |
|
|
|
8,071 |
|
Total Segment EBDA Certain Items |
|
(59 |
) |
|
|
(295 |
) |
|
|
1,922 |
|
|
|
(322 |
) |
Total Adjusted Segment EBDA |
$ |
1,872 |
|
|
$ |
2,045 |
|
|
$ |
7,135 |
|
|
$ |
7,749 |
|
Depreciation, depletion and amortization (GAAP) |
$ |
(528 |
) |
|
$ |
(661 |
) |
|
$ |
(2,164 |
) |
|
$ |
(2,411 |
) |
Amortization of excess cost of equity investments (GAAP) |
|
(41 |
) |
|
|
(22 |
) |
|
|
(140 |
) |
|
|
(83 |
) |
DD&A and amortization of excess cost of equity investments |
|
(569 |
) |
|
|
(683 |
) |
|
|
(2,304 |
) |
|
|
(2,494 |
) |
JV DD&A |
|
(90 |
) |
|
|
(95 |
) |
|
|
(367 |
) |
|
|
(392 |
) |
DD&A attributable to KML NCI |
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
19 |
|
DD&A and amortization of excess cost of equity investments for DCF |
$ |
(659 |
) |
|
$ |
(774 |
) |
|
$ |
(2,671 |
) |
|
$ |
(2,867 |
) |
General and administrative (GAAP) |
$ |
(187 |
) |
|
$ |
(134 |
) |
|
$ |
(648 |
) |
|
$ |
(590 |
) |
Corporate benefit (charges) |
|
6 |
|
|
|
1 |
|
|
|
(5 |
) |
|
|
(21 |
) |
Certain Items |
|
56 |
|
|
|
2 |
|
|
|
92 |
|
|
|
13 |
|
General and administrative and corporate charges (1) |
$ |
(125 |
) |
|
$ |
(131 |
) |
|
$ |
(561 |
) |
|
$ |
(598 |
) |
Interest, net (GAAP) |
$ |
(381 |
) |
|
$ |
(442 |
) |
|
$ |
(1,595 |
) |
|
$ |
(1,801 |
) |
Certain Items |
|
(7 |
) |
|
|
(9 |
) |
|
|
(15 |
) |
|
|
(15 |
) |
Interest, net (1) |
$ |
(388 |
) |
|
$ |
(451 |
) |
|
$ |
(1,610 |
) |
|
$ |
(1,816 |
) |
Income tax expense (GAAP) |
$ |
(177 |
) |
|
$ |
(455 |
) |
|
$ |
(481 |
) |
|
$ |
(926 |
) |
Certain Items |
|
7 |
|
|
|
284 |
|
|
|
(107 |
) |
|
|
299 |
|
Income tax expense (1) |
|
(170 |
) |
|
|
(171 |
) |
|
|
(588 |
) |
|
|
(627 |
) |
Unconsolidated JV income tax expense (1)(2) |
|
(16 |
) |
|
|
(24 |
) |
|
|
(82 |
) |
|
|
(95 |
) |
Income tax expense attributable to KML NCI (1) |
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
8 |
|
Income tax expense for DCF (1) |
$ |
(186 |
) |
|
$ |
(193 |
) |
|
$ |
(670 |
) |
|
$ |
(714 |
) |
KML activities prior to |
|
|
|
|
|
|
|
||||||||
Net income attributable to KML NCI |
$ |
— |
|
|
$ |
(4 |
) |
|
$ |
— |
|
|
$ |
(29 |
) |
KML NCI associated with Certain Items |
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(4 |
) |
KML NCI (1) |
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
|
(33 |
) |
DD&A attributable to KML NCI |
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
|
(19 |
) |
Income tax expense attributable to KML NCI (1) |
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(8 |
) |
KML NCI DCF adjustments (1) |
$ |
— |
|
|
$ |
(13 |
) |
|
$ |
— |
|
|
$ |
(60 |
) |
Net income attributable to NCI (GAAP) |
$ |
(16 |
) |
|
$ |
(17 |
) |
|
$ |
(61 |
) |
|
$ |
(49 |
) |
Less: KML NCI (1) |
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
|
(33 |
) |
Net income attributable to NCI (net of KML NCI (1)) |
|
(16 |
) |
|
|
(10 |
) |
|
|
(61 |
) |
|
|
(16 |
) |
NCI associated with Certain Items |
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(4 |
) |
Net income attributable to NCI (net of KML NCI and Certain Items) |
$ |
(16 |
) |
|
$ |
(13 |
) |
|
$ |
(61 |
) |
|
$ |
(20 |
) |
Additional JV information |
|
|
|
|
|
|
|
||||||||
Unconsolidated JV DD&A |
$ |
(101 |
) |
|
$ |
(103 |
) |
|
$ |
(407 |
) |
|
$ |
(411 |
) |
Less: Consolidated JV partners' DD&A |
|
(11 |
) |
|
|
(8 |
) |
|
|
(40 |
) |
|
|
(19 |
) |
JV DD&A |
|
(90 |
) |
|
|
(95 |
) |
|
|
(367 |
) |
|
|
(392 |
) |
Unconsolidated JV income tax expense (1)(2) |
|
(16 |
) |
|
|
(24 |
) |
|
|
(82 |
) |
|
|
(95 |
) |
JV DD&A and income tax expense (1) |
$ |
(106 |
) |
|
$ |
(119 |
) |
|
$ |
(449 |
) |
|
$ |
(487 |
) |
Unconsolidated JV cash taxes (2) |
$ |
(11 |
) |
|
$ |
(11 |
) |
|
$ |
(62 |
) |
|
$ |
(61 |
) |
Unconsolidated JV sustaining capital expenditures |
$ |
(36 |
) |
|
$ |
(29 |
) |
|
$ |
(120 |
) |
|
$ |
(114 |
) |
Less: Consolidated JV partners' sustaining capital expenditures |
|
(2 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
(6 |
) |
JV sustaining capital expenditures |
$ |
(34 |
) |
|
$ |
(28 |
) |
|
$ |
(114 |
) |
|
$ |
(108 |
) |
CO2 Segment EBDA (GAAP) to CO2 Segment Free Cash Flow Reconciliation |
|
|
|
|
|
|
|
||||||||
CO2 Segment EBDA (GAAP) |
$ |
161 |
|
|
$ |
123 |
|
|
$ |
(292 |
) |
|
$ |
681 |
|
Certain Items: |
|
|
|
|
|
|
|
||||||||
Change in fair value of derivative contracts |
|
6 |
|
|
|
(13 |
) |
|
|
(6 |
) |
|
|
(49 |
) |
Loss on impairments |
|
— |
|
|
|
75 |
|
|
|
950 |
|
|
|
75 |
|
CO2 Segment Certain Items |
|
6 |
|
|
|
62 |
|
|
|
944 |
|
|
|
26 |
|
Capital expenditures (3) |
|
(32 |
) |
|
|
(88 |
) |
|
|
(186 |
) |
|
|
(349 |
) |
CO2 Segment Free Cash Flow (1) |
$ |
135 |
|
|
$ |
97 |
|
|
$ |
466 |
|
|
$ |
358 |
|
Notes |
||
(1) |
Amounts are adjusted for Certain Items. |
|
(2) |
Amounts are associated with our Citrus, NGPL and Plantation equity investments. |
|
(3) |
Includes sustaining and expansion capital expenditures for our CO2 segment. |
Table 8 |
|||
|
|||
Reconciliation of Budgeted Net Income Attributable to |
|||
(In billions, unaudited) |
|||
|
|
||
|
Budgeted |
||
|
2021 |
||
Net income attributable to |
$ |
2.1 |
|
Total Certain Items (1) |
|
— |
|
DD&A and amortization of excess cost of equity investments for DCF (2) |
|
2.5 |
|
Income tax expense for DCF (2)(3) |
|
0.7 |
|
Cash taxes (4) |
|
(0.1 |
) |
Sustaining capital expenditures (4) |
|
(0.8 |
) |
Other items (1) |
|
— |
|
DCF |
$ |
4.4 |
|
Table 9 |
||
|
||
Reconciliation of Budgeted Net Income Attributable to |
||
(In billions, unaudited) |
||
|
|
|
|
Budgeted |
|
|
2021 |
|
Net income attributable to |
$ |
2.1 |
Total Certain Items (1) |
|
— |
DD&A and amortization of excess cost of equity investments |
|
2.2 |
Income tax expense (3) |
|
0.6 |
JV DD&A and income tax expense (5) |
|
0.4 |
Interest, net (3) |
|
1.5 |
Adjusted EBITDA |
$ |
6.8 |
Notes |
||
(1) |
Aggregate adjustments for Total Certain Items and Other items (such as non-cash pension expense and non-cash compensation associated with our restricted stock program) are currently estimated to be less than |
|
(2) |
Includes DD&A or income tax expense, as applicable, from unconsolidated JVs, reduced by consolidated JV partners' DD&A. |
|
(3) |
Amounts are adjusted for Certain Items. |
|
(4) |
Includes cash taxes or sustaining capital expenditures, as applicable, from unconsolidated JVs reduced by consolidated JV partners' sustaining capital expenditures. |
|
(5) |
Represents unconsolidated JV DD&A and income tax expense, reduced by consolidated JV partners' DD&A. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210120005606/en/
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