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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Kinder Morgan Inc | NYSE:KMI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.06 | 0.30% | 19.76 | 19.89 | 19.70 | 19.71 | 10,286,638 | 01:00:00 |
Strong Financial Performance Despite Non-cash Tax Cuts & Jobs Act Charge
Kinder Morgan, Inc. (NYSE: KMI) today announced that its board of directors approved a cash dividend of $0.125 per share for the fourth quarter ($0.50 annualized) payable on February 15, 2018, to common stockholders of record as of the close of business on January 31, 2018. KMI continues to expect to increase its dividend to $0.80 per share for 2018 ($0.20 per share for Q1 2018). KMI also continues to expect to use cash in excess of dividend payments to fully fund growth investments, further strengthening its balance sheet.
“Kinder Morgan thrived in 2017. We had very good financial performance despite facing continued strong headwinds (including an epic rain event), we strengthened the balance sheet beyond our original projections, and we announced our plan to return value to shareholders through an increasing dividend and a $2 billion share repurchase program. Our previously announced 2018 guidance, with $0.80 dividends to be declared for 2018, and the early start to our share repurchases, which we began in December 2017, shows our commitment to that plan. We are highly confident in our ability to maintain robust dividend coverage while delivering a substantial dividend increase to stockholders out of operating cash flows in excess of growth capital. And of course we will continue the important work of strengthening our balance sheet by funding all growth capital through operating cash flows with no need for external funding for growth capital for the third straight year,” said Richard D. Kinder, Executive Chairman.
President and CEO Steve Kean said, “During 2017 we completed the Elba Liquefaction Project joint venture and the IPO of our Canadian pipelines and terminals assets (KML). Those transactions helped us outperform our original target for strengthening our balance sheet, leading to a year-end 2017 Net Debt-to-Adjusted EBITDA ratio of 5.1 times versus our plan of 5.4 times. We are committed to achieving or beating our longer term leverage target of 5.0 times. We also placed almost $1.8 billion of projects in service throughout the year and added a substantial additional natural gas project in Gulf Coast Express. We had good commercial and operating performance, slightly exceeding our plan for the year. We are pleased with the strength and resiliency of the company’s business and with our operational performance.”
“We also had a solid fourth quarter, but because of a non-cash accounting charge resulting from the reduction in corporate income tax rates, we are showing a fourth quarter loss of $0.47 in earnings per common share. While the recently enacted Tax Cuts and Jobs Act of 2017 will ultimately be moderately positive for KMI, the reduced corporate income tax rate causes certain deferred-tax assets to be revalued at 21 percent versus 35 percent. Although there is no impact to the underlying related deductions, which can continue to be used to offset future taxable income, KMI will take an estimated approximately $1.4 billion non-cash accounting charge for the 4th quarter. This charge is our initial estimate and may be refined in the future as permitted by recent guidance from the Securities and Exchange Commission and the Financial Accounting Standards Board. The positive impacts of the law include the reduced corporate income tax rate and the fact that several of our U.S. business units (essentially all but our interstate natural gas pipelines) will be able to deduct 100 percent of their capital expenditures through 2022. The net impact results in postponing the date when KMI becomes a federal cash taxpayer by approximately one year, to beyond 2024,” continued Kean.
For the quarter, we achieved distributable cash flow (DCF) of $0.53 per common share, representing 4 percent growth over the fourth quarter of 2016, resulting in $910 million of excess DCF above our dividend. The discrepancy between a reported net income loss and a DCF gain illustrates why we and those who follow our businesses view the DCF metric as an important measure of our financial performance.”
Kean added, “We continue to drive future growth by completing significant infrastructure development projects that we track as part of our project backlog. Our current project backlog is essentially flat with last quarter at $11.8 billion, with a small decrease primarily due to projects going into service, which was mostly offset by the addition of our Gulf Coast Express joint venture. Excluding the CO2 segment projects, we expect the projects in our backlog to generate an average capital-to-EBITDA multiple of approximately 6.5 times.”
KMI reported a fourth quarter net loss available to common stockholders of $1,045 million, compared to net income available to common stockholders of $170 million for the fourth quarter of 2016, and DCF of $1,190 million, up 4 percent from $1,147 million for the comparable period in 2016. The increase in DCF was driven by greater contributions from the Natural Gas, Terminals and Products Pipelines Business Units, as well as from Kinder Morgan Canada, partially offset by decreased contributions from CO2. Net income available to common stockholders was impacted by a $1,276 million unfavorable change in total Certain Items (as described under “Non-GAAP Financial Measures” below) compared to the fourth quarter of 2016. Fourth quarter 2017 Certain Items were driven largely by the non-cash accounting charge resulting from the 2017 Tax Cuts and Jobs Act as previously discussed.
For the full year, KMI reported net income available to common stockholders of $27 million, versus $552 million for 2016, and DCF of $4,482 million ($2.00 per share) that was down slightly from $4,511 million for the comparable period in 2016. The decrease in DCF was driven by the sale of 50 percent of Southern Natural Gas (SNG) in 2016, negative impacts of Hurricane Harvey, a contribution to KMI’s pension plan, and the KML IPO, partially offset by increased contributions from the Terminals Business Unit, growth projects in the Natural Gas Business Unit, lower interest expense, and lower general and administrative expenses. Excluding the impact of Hurricane Harvey, the SNG sale and the KML IPO, DCF was up over 1 percent from 2016. Net income available to common stockholders was also impacted by a $512 million increase in total Certain Items compared to 2016. Certain Items in 2017 were driven by the revaluation of certain deferred-tax assets described above, partially offset by asset impairment charges taken during 2016.
2018 Outlook
For 2018, KMI’s budget is set to declare dividends of $0.80 per common share, achieve DCF of approximately $4.57 billion ($2.05 per common share) and Adjusted EBITDA of approximately $7.5 billion. KMI also budgeted to invest $2.2 billion in growth projects during 2018 (excluding growth capital expected to be funded by KML), to be funded with internally generated cash flow without the need to access equity markets, and to end the year with a Net Debt-to-Adjusted EBITDA ratio of approximately 5.1 times.
KMI previously announced it will further enhance shareholder value through a $2 billion share buy-back program. KMI’s Board of Directors authorized the program to begin in December 2017, and during that month KMI repurchased approximately 14 million shares for approximately $250 million. In 2018, KMI plans to further utilize this program opportunistically.
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 inherent difficulty and 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 expectations assume average annual prices for West Texas Intermediate (WTI) crude oil of $56.50 per barrel and Henry Hub natural gas of $3 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 31,419 barrels per day (Bbl/d) at $59.58/Bbl in 2018; 17,401 Bbl/d at $54.85/Bbl in 2019; 9,300 Bbl/d at $52.86/Bbl in 2020; and 4,300 Bbl/d at $51.92/Bbl in 2021. For 2018, KMI estimates that every $1 per barrel change in the average West Texas Intermediate crude oil price from the company’s budget of $56.50 would impact budgeted DCF by approximately $7 million and each $0.10 per MMBtu change in the price of natural gas from the company’s budget of $3 per MMBtu would impact budgeted DCF by approximately $1 million.
Overview of Business Segments
“The Natural Gas Pipelines segment’s performance for the fourth quarter of 2017 was 4 percent higher relative to the fourth quarter of 2016. The segment benefited from increased contributions from Tennessee Gas Pipeline (TGP), driven by incremental short-term capacity sales and projects placed in service; from Natural Gas Pipeline of America (NGPL) due to lower interest expense; from the Elba Express pipeline resulting from the completion of expansion projects; from SNG due to completion of an expansion project and lower interest expense; and from Hiland Midstream due to increased gathering volumes and the effect of renegotiated contracts. These benefits were partially offset by lower contributions from certain midstream gathering and processing assets and from Colorado Interstate Gas Company (CIG) as a result of a 2016 rate case settlement,” Kean said.
Natural gas transport volumes were up 8 percent compared to the fourth quarter of 2016, driven by higher throughput on TGP and Elba Express due to projects placed in service, on NGPL due to incremental demand from LNG facilities and to Mexico, and on El Paso Natural Gas (EPNG) due to additional Permian capacity sales. The increases were partially offset by lower throughput on Cheyenne Plains due to mild weather and fuel switching to coal in the Rockies market. Natural gas gathering volumes were down 2 percent from the fourth quarter of 2016 due primarily to lower natural gas volumes on multiple systems gathering from the Eagle Ford Shale and on the KinderHawk system, partially offset by increases in Hiland and Altamont volumes due to increased drilling activities in the basins.
Natural gas is critical to the American economy and to meeting the world’s evolving energy and manufacturing 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 more than 30 percent to approximately 105 billion cubic feet per day (Bcf/d) by 2027. Of the natural gas consumed in the U.S., about 40 percent moves on KMI pipelines. While a substantial majority of natural gas is consumed in industrial, commercial and residential heating uses, KMI expects future natural gas infrastructure opportunities will also be driven by greater demand for gas-fired power generation across the country, LNG exports, exports to Mexico, and continued industrial development, particularly in the petrochemical industry. Compared to the fourth quarter of 2016, natural gas deliveries on KMI pipelines to Mexico were up 6 percent, and deliveries to the Sabine Pass LNG facility increased by 33 percent. KMI transports roughly 70 percent of all U.S. natural gas exports destined for Mexico.
“The CO2 segment was impacted by lower commodity prices, as our realized weighted average oil price for the quarter was $59.32 per barrel compared to $62.30 per barrel for the fourth quarter of 2016,” Kean said. “Combined oil production across all of our fields was up 2 percent compared to 2016 on a net to Kinder Morgan basis. Fourth quarter 2017 net NGL sales volumes of 10.1 thousand barrels per day (MBbl/d) were down 3 percent from 2016, due to an operational interruption during the quarter.”
Combined gross oil production volumes averaged 54.1 MBbl/d for the fourth quarter, up 1 percent from 53.5 MBbl/d for the same period last year. SACROC’s fourth quarter gross production was 1 percent above fourth quarter 2016 results and slightly above 2017 budget, and Yates gross production was 5 percent below fourth quarter 2016 results and below plan. Fourth quarter gross production from Katz, Goldsmith and Tall Cotton was 18 percent above the same period in 2016, but below plan. Gross NGL sales volumes were 20.5 MBbl/d during the quarter, 4 percent below fourth quarter 2016. Southwest Colorado and the Cortez Pipeline set annual records in 2017.
“The Terminals segment earnings contributions were up 4 percent compared to the fourth quarter of 2016 despite several divestitures and a negative impact on earnings associated with Hurricane Harvey.
“Growth in the liquids business during the quarter versus the fourth quarter of 2016 was primarily driven by increased contributions from our Jones Act tankers, including the fourth quarter delivery of our final new-build tanker, the American Pride, as well as various expansions across our network, including the Kinder Morgan Export Terminal and the Pit 11 project at our Pasadena Terminal, which combined added 3.5 million barrels of storage to our best-in-class refined products storage hub along the Houston Ship Channel,” Kean said.
A 9 percent increase in the bulk business during the quarter versus the fourth quarter of 2016 was attributable primarily to increased volumes and earnings from our petroleum coke and steel handling activities that more than offset the impact of various non-core asset divestitures.
“The Products Pipelines segment contributions were up 2 percent compared with fourth quarter 2016 performance due largely to increased contributions from SFPP, CalNev, and Kinder Morgan Southeast Terminals,” Kean said.
Total refined products volumes were up 4 percent for the fourth quarter versus the same period in 2016. Crude and condensate pipeline volumes were up 2 percent from the fourth quarter of 2016.
Kinder Morgan Canada contributions were up 22 percent in the fourth quarter of 2017 compared to the fourth quarter of 2016. This was largely due to higher capitalized equity financing costs associated with spending on the Trans Mountain Expansion Project, timing of operating costs, and foreign exchange effects driven by a stronger Canadian dollar in 2017.
Other News
Natural Gas Pipelines
CO2
Terminals
Products Pipelines
Kinder Morgan Canada
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. It owns an interest in or operates approximately 85,000 miles of pipelines and 152 terminals. KMI’s pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2 and other products, and its terminals transload and store petroleum products, ethanol and chemicals, and handle such products as steel, coal and petroleum coke. It is also a leading producer of CO2 that we and others use for enhanced oil recovery projects primarily in the Permian basin. For more information please visit www.kindermorgan.com.
Please join Kinder Morgan, Inc. at 4:30 p.m. Eastern Time on Wednesday, January 17, at www.kindermorgan.com for a LIVE webcast conference call on the company’s fourth quarter earnings.
Non-GAAP Financial Measures
The non-generally accepted accounting principles (non-GAAP) financial measures of distributable cash flow (DCF), both in the aggregate and per share, segment earnings before depreciation, depletion, amortization and amortization of excess cost of equity investments (DD&A) and Certain Items (Segment EBDA before Certain Items), net income before interest expense, taxes, DD&A and Certain Items (Adjusted EBITDA), Adjusted Earnings and Adjusted Earnings per common share are presented herein.
Certain Items as used to calculate our Non-GAAP measures, are items that are required by GAAP to be reflected in net income, but typically either (1) do not have a cash impact (for example, asset impairments), or (2) by their nature are separately identifiable from our normal business operations and in our view are likely to occur only sporadically (for example certain legal settlements, enactment of new tax legislation and casualty losses).
DCF is calculated by adjusting net income available to common stockholders before Certain Items for DD&A, total book and cash taxes, sustaining capital expenditures and other items. DCF is a significant performance measure useful to management and by external users of our financial statements in evaluating our performance and to measure and estimate the ability of our assets to generate cash earnings after servicing our debt and preferred stock dividends, paying cash taxes and expending sustaining capital, that could be used for discretionary purposes such as common stock dividends, stock repurchases, retirement of debt, or expansion capital expenditures. We believe the GAAP measure most directly comparable to DCF is net income available to common stockholders. A reconciliation of net income available to common stockholders to DCF is provided herein. DCF per share is DCF divided by average outstanding shares, including restricted stock awards that participate in dividends.
Segment EBDA before Certain Items is used by management in its analysis of segment performance and management of our business. General and administrative expenses are generally not under the control of our segment operating managers, and therefore, are not included when we measure business segment operating performance. We believe Segment EBDA before Certain Items is a significant performance metric because it provides us and external users of our financial statements additional insight into the ability of our segments to generate segment cash earnings on an ongoing basis. We believe it is useful to investors because it is a measure that management uses to allocate resources to our segments and assess each segment’s performance. We believe the GAAP measure most directly comparable to Segment EBDA before Certain Items is segment earnings before DD&A and amortization of excess cost of equity investments (Segment EBDA). Segment EBDA before Certain Items is calculated by adjusting Segment EBDA for the Certain Items attributable to a segment, which are specifically identified in the footnotes to the accompanying tables.
Adjusted EBITDA is calculated by adjusting net income before interest expense, taxes, and DD&A (EBITDA) for Certain Items, noncontrolling interests before Certain Items, and KMI’s share of certain equity investees’ DD&A (net of consolidating joint venture partners’ share of DD&A) and book taxes, which are specifically identified in the footnotes to the accompanying tables.. Adjusted EBITDA is used by management and external users, in conjunction with our net debt, to evaluate certain leverage metrics. Therefore, we believe Adjusted EBITDA is useful to investors. We believe the GAAP measure most directly comparable to Adjusted EBITDA is net income.
Adjusted Earnings is net income available to common stockholders before Certain Items. Adjusted Earnings is used by certain external users of our financial statements to assess the earnings of our business excluding Certain Items as another reflection of our business’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 Adjusted 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 from 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, 2016 (under the headings “Risk Factors” and “Information Regarding Forward-Looking Statements” and elsewhere) and its subsequent reports, which are available through the SEC’s EDGAR system at www.sec.gov and on our website at ir.kindermorgan.com. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, KMI undertakes no obligation to update any forward-looking statement because of new information, future events or other factors. Because of these risks and uncertainties, readers should not place undue reliance on these forward-looking statements.
Kinder Morgan, Inc. and Subsidiaries Preliminary Consolidated Statements of Income (Unaudited) (In millions, except per share amounts) Three Months EndedYear Ended
December 31,December 31,
2017 2016 2017 2016 Revenues $ 3,632 $ 3,389 $ 13,705 $ 13,058 Costs, expenses and other Costs of sales 1,207 1,024 4,345 3,429 Operations and maintenance 774 579 2,472 2,372 Depreciation, depletion and amortization 564 557 2,261 2,209 General and administrative 175 119 673 669 Taxes, other than income taxes 101 97 398 421 Loss on impairments and divestitures, net — 80 13 387 Other income, net (1 ) (1 ) (1 ) (1 ) 2,820 2,455 10,161 9,486 Operating income 812 934 3,544 3,572 Other income (expense) Earnings from equity investments 101 154 578 497 Loss on impairments and divestitures of equity investments, net (150 ) (266 ) (150 ) (610 ) Amortization of excess cost of equity investments (16 ) (14 ) (61 ) (59 ) Interest, net (445 ) (422 ) (1,832 ) (1,806 ) Other, net 22 2 82 44 Income before income taxes 324 388 2,161 1,638 Income tax expense (1,316 ) (173 ) (1,938 ) (917 ) Net (loss) income (992 ) 215 223 721 Net income attributable to noncontrolling interests (14 ) (6 ) (40 ) (13 ) Net (loss) income attributable to Kinder Morgan, Inc. (1,006 ) 209 183 708 Preferred stock dividends (39 ) (39 ) (156 ) (156 ) Net (loss) income available to common stockholders $ (1,045 ) $ 170 $ 27 $ 552 Class P Shares Basic and diluted (loss) earnings per common share $ (0.47 ) $ 0.08 $ 0.01 $ 0.25 Basic and diluted weighted average common shares outstanding 2,229 2,230 2,230 2,230 Declared dividend per common share $ 0.125 $ 0.125 $ 0.500 $ 0.500 Adjusted earnings per common share (1) $ 0.21 $ 0.18 $ 0.66 $ 0.66 Segment EBDA%change
%change
Natural Gas Pipelines $ 641 $ 708 (9 )% $ 3,487 $ 3,211 9 % CO2 211 219 (4 )% 847 827 2 % Terminals 299 222 35 % 1,224 1,078 14 % Products Pipelines 318 306 4 % 1,231 1,067 15 % Kinder Morgan Canada 50 41 22 % 186 181 3 % Total Segment EBDA $ 1,519 $ 1,496 2 % $ 6,975 $ 6,364 10 %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 Year Ended December 31, December 31, 2017 2016%change
2017 2016%change
Segment EBDA before certain items (1) Natural Gas Pipelines $ 1,027 $ 986 4 % $ 3,879 $ 4,036 (4 )% CO2 228 238 (4 )% 887 919 (3 )% Terminals 317 305 4 % 1,214 1,169 4 % Product Pipelines 314 307 2 % 1,193 1,180 1 % Kinder Morgan Canada 50 41 22 % 186 181 3 % Subtotal 1,936 1,877 3 % 7,359 7,485 (2 )% DD&A and amortization of excess investments (580 ) (571 ) (2,322 ) (2,268 ) General and administrative and corporate charges (1) (2) (163 ) (152 ) (645 ) (665 ) Interest, net (1) (463 ) (475 ) (1,871 ) (1,999 ) Subtotal 730 679 2,521 2,553 Book taxes (1) (207 ) (225 ) (853 ) (899 ) Certain items Acquisition and divestiture related costs (1 ) (1 ) (8 ) (13 ) Fair value amortization 11 37 53 143 Contract and debt early termination (3) — — 19 53 Legal and environmental reserves (4) (6 ) 71 37 16 Change in fair market value of derivative contracts (5) (13 ) (52 ) (40 ) (75 ) Losses on impairments and divestitures, net (157 ) (343 ) (170 ) (848 ) Project write-offs (6) — (1 ) — (171 ) Hurricane damage (18 ) — (27 ) — Other (3 ) (2 ) (5 ) (20 ) Subtotal certain items before tax (187 ) (291 ) (141 ) (915 ) Book tax certain items (7) 53 52 77 (18 ) Impact of 2017 Tax Cuts and Jobs Act (1,381 ) — (1,381 ) — Total certain items (1,515 ) (239 ) (1,445 ) (933 ) Net (loss) income (992 ) 215 223 721 Net income attributable to noncontrolling interests (14 ) (6 ) (40 ) (13 ) Preferred stock dividends (39 ) (39 ) (156 ) (156 ) Net (loss) income available to common stockholders $ (1,045 ) $ 170 $ 27 $ 552 Net (loss) income available to common stockholders $ (1,045 ) $ 170 $ 27 $ 552 Total certain items 1,515 239 1,445 933 Noncontrolling interests certain item (8) (1 ) 1 — (8 ) Adjusted earnings 469 410 1,472 1,477 DD&A and amortization of excess investments (9) 666 656 2,684 2,617 Total book taxes (10) 232 248 957 993 Cash taxes (11) (18 ) (18 ) (72 ) (79 ) Other items (12) 13 12 29 43 Sustaining capital expenditures (13) (172 ) (161 ) (588 ) (540 ) DCF $ 1,190 $ 1,147 $ 4,482 $ 4,511 Weighted average common shares outstanding for dividends (14) 2,239 2,239 2,240 2,238 DCF per common share $ 0.53 $ 0.51 $ 2.00 $ 2.02 Declared dividend per common share $ 0.125 $ 0.125 $ 0.500 $ 0.500 Adjusted EBITDA (15) $ 1,896 $ 1,829 $ 7,198 $ 7,242Notes ($ million)
(1) Excludes certain items: 4Q 2017 - Natural Gas Pipelines $(386), CO2 $(17), Terminals $(18), Products Pipelines $4, general and administrative and corporate charges $(7), interest expense $18, book tax $(1,109). 4Q 2016 - Natural Gas Pipelines $(278), CO2 $(19), Terminals $(83), Products Pipelines $(1), general and administrative and corporate charges $37, interest expense $53, book tax $52. YTD 2017 - Natural Gas Pipelines $(392), CO2 $(40), Terminals $10, Products Pipelines $38, general and administrative and corporate charges $(15), interest expense $39, book tax $(1,085). YTD 2016 - Natural Gas Pipelines $(825), CO2 $(92), Terminals $(91), Products Pipelines $(113), general and administrative and corporate charges $13, interest expense $193, book tax $(18). (2) Includes corporate charges: 4Q 2017 - $4 4Q 2016 - $5 YTD 2017 - $22 YTD 2016 - $17 General and administrative expense is also net of management fee revenues from an equity investee: 4Q 2017 - $(9) 4Q 2016 - $(9) YTD 2017 - $(35) YTD 2016 - $(34) (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, partially offset by an equity investee loss on early termination of debt. (4) Legal reserve adjustments related to certain litigation and environmental matters. (5) Gains or losses are reflected in our DCF when realized. (6) YTD 2016 includes $106 million of project write-offs associated with our Northeast Energy Direct Market project and $65 million of write-offs associated with our Palmetto project. (7) YTD 2017 includes a $36 million federal return-to-provision tax benefit as a result of the recognition of an enhanced oil recovery credit instead of deduction. YTD 2016 includes a $276 million book tax expense certain item due to the non-deductibility, for tax purposes, of approximately $800 million of goodwill included in the loss calculation related to the sale of a 50% interest in SNG, resulting in a gain for tax purposes. (8) Represents noncontrolling interest share of certain items. (9) Includes KMI's share of certain equity investees' DD&A, net of the noncontrolling interests' portion of KML DD&A and consolidating joint venture partners' share of DD&A: 4Q 2017 - $86 4Q 2016 - $85 YTD 2017 - $362 YTD 2016 - $349 (10) Excludes book tax certain items. Also, includes KMI's share of taxable equity investees' book taxes, net of the noncontrolling interests' portion of KML book taxes: 4Q 2017 - $25 4Q 2016 - $23 YTD 2017 - $104 YTD 2016 - $94 (11) Includes KMI's share of taxable equity investees' cash taxes: 4Q 2017 - $(15) 4Q 2016 - $(17) YTD 2017 - $(69) YTD 2016 - $(76) (12) All periods include non-cash compensation associated with our restricted stock program. 2017 also includes a pension contribution. (13) Includes KMI's share of certain equity investees' sustaining capital expenditures (the same equity investees for which DD&A is added back): 4Q 2017 - $(33) 4Q 2016 - $(24) YTD 2017 - $(107) YTD 2016 - $(90) (14) Includes restricted stock awards that participate in common share dividends. (15) Net (loss) income is reconciled to Adjusted EBITDA as follows, with any difference due to rounding: Three Months Ended Year Ended December 31, December 31, 2017 2016 2017 2016 Net (loss) income $ (992 ) $ 215 $ 223 $ 721 Total certain items 1,515 239 1,445 933 Net income attributable to noncontrolling interests before certain items (16) (1 ) (5 ) (12 ) (21 ) DD&A and amortization of excess investments (9) (17) 674 657 2,704 2,617 Book taxes (10) (17) 237 248 967 993 Interest, net (1) 463 475 1,871 1,999 Adjusted EBITDA $ 1,896 $ 1,829 $ 7,198 $ 7,242 (16) Excludes KML noncontrolling interests: 4Q 2017 - $13 YTD 2017 - $27 (17) Includes the noncontrolling interests' portion of KML: 4Q 2017 - DD&A $8; Book taxes $5 YTD 2017 - DD&A $20; Book taxes $10 Volume Highlights (historical pro forma for acquired and divested assets) Three Months Ended Year Ended December 31, December 31, 2017 2016 2017 2016 Natural Gas Pipelines Transport Volumes (BBtu/d) (1) 30,033 27,897 29,108 28,095 Sales Volumes (BBtu/d) (2) 2,375 2,288 2,341 2,335 Gas Gathering Volumes (BBtu/d) (3) 2,704 2,749 2,653 2,970 Crude/Condensate Gathering Volumes (MBbl/d) (4) 286 265 273 292 CO2 Southwest Colorado Production - Gross (Bcf/d) (5) 1.28 1.27 1.29 1.20 Southwest Colorado Production - Net (Bcf/d) (5) 0.59 0.65 0.61 0.61 Sacroc Oil Production - Gross (MBbl/d) (6) 28.35 28.13 27.88 29.32 Sacroc Oil Production - Net (MBbl/d) (7) 23.61 23.43 23.22 24.43 Yates Oil Production - Gross (MBbl/d) (6) 17.00 17.91 17.34 18.37 Yates Oil Production - Net (MBbl/d) (7) 7.44 7.96 7.67 8.17 Katz, Goldsmith, and Tall Cotton Oil Production - Gross (MBbl/d) (6) 8.76 7.45 8.10 7.01 Katz, Goldsmith, and Tall Cotton Oil Production - Net (MBbl/d) (7) 7.43 6.27 6.86 5.90 NGL Sales Volumes (MBbl/d) (8) 10.12 10.46 9.94 10.31 Realized Weighted Average Oil Price per Bbl (9) $ 59.32 $ 62.30 $ 58.40 $ 61.52 Realized Weighted Average NGL Price per Bbl $ 28.81 $ 22.25 $ 25.15 $ 17.91 Terminals Liquids Leasable Capacity (MMBbl) 87.9 84.7 87.9 84.7 Liquids Utilization % 93.6 % 94.7 % 93.6 % 94.7 % Bulk Transload Tonnage (MMtons) (10) 15.0 13.7 59.5 54.8 Ethanol (MMBbl) 16.8 17.8 68.1 66.7 Products Pipelines Pacific, Calnev, and CFPL (MBbl/d) Gasoline (11) 807 781 811 795 Diesel 308 280 298 292 Jet Fuel 263 251 264 255 Sub-Total Refined Product Volumes - excl. Plantation 1,378 1,312 1,374 1,342 Plantation (MBbl/d) (12) Gasoline 221 234 227 230 Diesel 56 48 53 50 Jet Fuel 33 34 33 34 Sub-Total Refined Product Volumes - Plantation 310 315 312 313 Total (MBbl/d) Gasoline (11) 1,028 1,015 1,038 1,025 Diesel 364 328 351 342 Jet Fuel 296 284 297 288 Total Refined Product Volumes 1,689 1,627 1,686 1,655 NGLs (MBbl/d) (13) 113 117 112 109 Crude and Condensate (MBbl/d) (14) 339 333 327 324 Total Delivery Volumes (MBbl/d) 2,141 2,078 2,125 2,088 Ethanol (MBbl/d) (15) 119 113 117 115 Trans Mountain (MMBbl/d - mainline throughput) 303 295 308 316Notes
(1) Includes Texas Intrastates, Copano South Texas, KMNTP, Monterrey, TransColorado, MEP, KMLA, FEP, TGP, EPNG, CIG, WIC, Cheyenne Plains, SNG, Elba Express, Ruby, Sierrita, NGPL, and Citrus pipeline volumes. Joint Venture throughput reported at KMI share. (2) Includes Texas Intrastates and KMNTP. (3) Includes Copano Oklahoma, Copano South Texas, Eagle Ford Gathering, Copano, North Texas, Altamont, KinderHawk, Camino Real, Endeavor, Bighorn, Webb/Duval Gatherers, Fort Union, EagleHawk, Red Cedar, and Hiland Midstream throughput. Joint Venture throughput reported at KMI share. (4) Includes Hiland Midstream, EagleHawk, and Camino Real. Joint Venture throughput reported at KMI share. (5) Includes McElmo Dome and Doe Canyon sales volumes. (6) Represents 100% production from the field. (7) Represents KMI's net share of the production from the field. (8) Net to KMI. (9) Includes all KMI crude oil properties. (10) Includes KMI's share of Joint Venture tonnage. (11) Gasoline volumes include ethanol pipeline volumes. (12) Plantation reported at KMI share. (13) Includes Cochin and Cypress (KMI share). (14) Includes KMCC, Double Eagle (KMI share), and Double H. (15) Total ethanol handled including pipeline volumes included in gasoline volumes above. Kinder Morgan, Inc. and Subsidiaries Preliminary Consolidated Balance Sheets (Unaudited) (In millions) December 31, 2017 2016 ASSETS Cash and cash equivalents $ 264 $ 684 Other current assets 2,451 2,545 Property, plant and equipment, net 40,155 38,705 Investments 7,298 7,027 Goodwill 22,162 22,152 Deferred charges and other assets 6,725 9,192 TOTAL ASSETS $ 79,055 $ 80,305 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Short-term debt $ 2,828 $ 2,696 Other current liabilities 3,353 3,228 Long-term debt 33,988 36,105 Preferred interest in general partner of KMP 100 100 Debt fair value adjustments 927 1,149 Other 2,735 2,225 Total liabilities 43,931 45,503 Shareholders’ Equity KMI equity 33,636 34,431 Noncontrolling interests 1,488 371 Total shareholders' equity 35,124 34,802 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 79,055 $ 80,305 Net Debt (1) $ 36,409 $ 38,160 Net Debt including 50% of KML preferred shares (2) 36,624 38,160 Adjusted EBITDA Twelve Months Ended December 31, Reconciliation of Net Income to Adjusted EBITDA 2017 2016 Net income $ 223 $ 721 Total certain items 1,445 933 Net income attributable to noncontrolling interests before certain items (3) (12 ) (21 ) DD&A and amortization of excess investments (4) 2,704 2,617 Income tax expense before certain items (5) 967 993 Interest, net before certain items 1,871 1,999 Adjusted EBITDA $ 7,198 $ 7,242 Net Debt including 50% of KML preferred shares to Adjusted EBITDA 5.1 5.3Notes
(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 $143 million and $(43) million as of December 31, 2017 and 2016, respectively, as we have entered into swaps to convert that debt to U.S.$. (2) December 31, 2017 amount includes $215 million representing 50% of KML preferred shares which is included in noncontrolling interests. (3) 2017 excludes KML noncontrolling interests of $27 million. (4) 2017 and 2016 include KMI's share of certain equity investees' DD&A of $382 million and $349 million, respectively. (5) 2017 and 2016 include KMI's share of taxable equity investees' book taxes of $114 million and $94 million, respectively.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180117006324/en/
Kinder Morgan, Inc.Dave Conover, 713-369-9407Media Relationsdave_conover@kindermorgan.comorInvestor Relations800-348-7320km_ir@kindermorgan.comwww.kindermorgan.com
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