Kinder Morgan, Inc.’s (NYSE: KMI) board of directors today approved a cash dividend of $0.2625 per share for the second quarter ($1.05 annualized), payable on August 17, 2020, to common stockholders of record as of the close of business on August 3, 2020. This dividend represents a 5 percent increase over the second quarter 2019.
KMI is reporting a second quarter net loss attributable to KMI of $637 million, compared to net income attributable to KMI of $518 million in the second quarter of 2019; and distributable cash flow (DCF) of $1,001 million, an 11 percent decrease from the second quarter of 2019. The net loss was primarily due to a $1,000 million non-cash impairment of goodwill associated with KMI’s natural gas non-FERC regulated midstream business driven by the recent sharp decline in natural gas production affecting a number of our assets. Without that impairment, net income for the quarter would have been $363 million.
“Despite the significant reduction in energy demand during the second quarter due to the pandemic, our company continued to generate substantial earnings and robust coverage of this quarter’s dividend,” said KMI Executive Chairman Richard D. Kinder. “While the pace of the global economic recovery remains uncertain at this time, we are seeing green shoots in some areas of our business. The board remains committed to increasing the dividend to $1.25 annualized as we projected, under far different circumstances, in 2017. The board will meet in January 2021 as usual and at that time we will have the company’s 2021 budget to help guide our decisions. In making a determination about the dividend payment, we will take into account the economic conditions prevailing and projected at that time, along with our principles of returning value to shareholders while maintaining a healthy balance sheet.”
“Protecting our employees during this historic pandemic while continuing to provide essential services to our fellow citizens remains our top priority, and I am very proud of the way our employees have responded to this challenge,” said KMI Chief Executive Officer Steve Kean. “Our teams quickly adapted to remote working and have not missed a beat in running our assets, serving our customers, generating new business and executing on projects.
“We also continue to look closely at our capital spending, our expenses, and increased operational efficiency. We have now reduced our 2020 expenses and sustaining capital expenditures by approximately $170 million combined versus our original budget without sacrificing safety and compliance. We have reduced our expansion capital outlook for 2020 by approximately $660 million, or almost 30 percent. In addition, the actions we have taken over the last several years to strengthen our balance sheet, including reducing our net debt by $10 billion since the third quarter of 2015, have increased our resiliency for these challenging times. The services we provide continue to be needed to meet our customers’ energy transportation and storage needs. Our business model, which secures much of our cash flows on a take-or-pay basis independent of underlying commodity prices, positions us well even in the current environment,” Kean concluded.
“Sharp declines in crude oil and natural gas production along with reduced demand for refined products due to the economic shutdown in the wake of the pandemic clearly affected our business and will continue to do so in the near term. Largely due to the non-cash impairment noted above, we generated a second quarter loss per common share of $0.28, compared to earnings per common share of $0.23 in the second quarter of 2019. Financial contributions from all of our business segments were down compared to the second quarter of 2019, although transport volumes in our Natural Gas Pipelines segment were up 3 percent year over year, and we saw lower interest expense, cash taxes and sustaining capital expenditures versus the same period last year,” said KMI President Kim Dang.
“Adjusted earnings per share in the second quarter of 2020 were down 23 percent compared to the second quarter of 2019. At $0.44 per common share, DCF per share was down $0.06 from the second quarter of 2019, yet we still achieved $404 million of excess DCF above our declared dividend.
“We continue to overcome challenges and make progress on our Permian Highway Pipeline project, with more than 75 percent of the construction completed. As previously announced, we expect the project to be in service early in 2021,” said Dang. “We are also nearing completion of the Elba Liquefaction project, with the sixth of ten liquefaction units placed in service during the quarter, and the seventh on July 17th. The remaining three units are expected to be placed in service before the end of this summer. Both projects are fully contracted under long term, reservation-based contracts.”
For the first six months of 2020, KMI reported net loss attributable to KMI of $943 million, compared to net income attributable to KMI of $1,074 million for the first six months of 2019, and DCF of $2,262 million, down 9 percent from $2,499 million for the comparable period in 2019. In addition to the effects of the pandemic on energy demand described above, our net loss for the first six months of 2020 includes $1,976 million of pre-tax net losses on impairments and divestitures as compared to a pre-tax net gain of $10 million in the comparable 2019 period.
2020 Outlook
For 2020, KMI’s original budget contemplated DCF of approximately $5.1 billion ($2.24 per common share) and Adjusted EBITDA of approximately $7.6 billion. Because of the pandemic-related reduced energy demand and the sharp decline in commodity prices, the company now expects DCF to be below plan by slightly more than 10 percent and Adjusted EBITDA to be below plan by slightly more than 8 percent. As a result, KMI now expects to end 2020 with a Net Debt-to-Adjusted EBITDA ratio of approximately 4.7 times. Because considerable uncertainty exists with respect to the future pace and extent of a global economic recovery from the effects of the pandemic, Table 8 below provides assumptions and sensitivities for impacts on our business over the remaining six months of 2020 that may be affected by that uncertainty.
Market conditions also negatively impacted a number of planned expansion projects such that they are not needed at this time or no longer meet our internal return thresholds. We therefore expect the budgeted $2.4 billion expansion projects and contributions to joint ventures for 2020 to be lower by approximately $660 million. With this reduction, DCF less expansion capital expenditures is improved by over $100 million compared to budget, helping to keep our balance sheet strong.
KMI expects to use internally generated cash flow to fully fund its 2020 dividend payments, as well as all of its 2020 discretionary spending.
As of June 30, 2020, we had over $3.9 billion of borrowing capacity under our $4 billion credit facility and $526 million in cash and cash equivalents. We believe our cash from operations, current cash on hand and excess borrowing capacity are more than adequate to allow us to manage our day-to-day cash requirements as well as the debt maturing over the next 18 months.
Due to the impracticality of predicting certain amounts required by GAAP such as unrealized gains and losses on derivatives marked to market and potential changes in estimates for certain contingent liabilities, KMI does not provide budgeted net income attributable to KMI and net income, the GAAP financial measures most directly comparable to the non-GAAP financial measures of DCF and Adjusted EBITDA, respectively, or budgeted metrics derived therefrom.
Overview of Business Segments
“The Natural Gas Pipelines segment’s financial performance was down for the second quarter of 2020 relative to the second quarter of 2019,” said Dang. “The segment experienced lower contributions from multiple gathering and processing assets due to sharply reduced natural gas production, from Tennessee Gas Pipeline Company (TGP) due to mild weather in the Northeast and the impact of the FERC 501-G rate settlement, and from the sale of the Cochin Pipeline in December 2019. These reduced contributions were partially offset by greater contributions from the Elba Liquefaction and the Gulf Coast Express (GCX) projects.”
Natural gas transport volumes were up 3 percent compared to the second quarter of 2019, with the largest increases on GCX, TGP, Colorado Interstate Gas (CIG), and the Texas Intrastates. Increases on GCX were due to its being placed in service, while TGP benefited from increased LNG deliveries, CIG from DJ growth and higher heating demand, and the Texas Intrastates from the continued growth in the Texas Gulf Coast market. Natural gas gathering volumes were down 8 percent from the second quarter of 2019 due primarily to decreased volumes on our KinderHawk, Oklahoma and Hiland Midstream systems.
“The severe decline in refined product demand and lower crude and condensate volumes during the second quarter reduced contributions from the Products Pipelines segment,” Dang said. “Crude and condensate pipeline volumes were down 26 percent compared to the prior period and total refined product volumes were down 31 percent compared to the second quarter of 2019.”
“Terminals segment earnings were lower compared to the second quarter of 2019 predominantly driven by the impacts of the December 2019 sale of Kinder Morgan Canada Limited (KML) and demand reduction attributable to the pandemic. In our liquids business, which accounts for approximately 80 percent of the segment, refined product volumes were down 24 percent compared to the second quarter of 2019, however the negative impact to earnings was more moderate owing to our predominantly fixed, take-or-pay contracting profile. Further, incremental storage demand driven by a contango commodity pricing environment contributed to historically-high effective utilization across our network of nearly 80 million barrels of storage capacity,” said Dang. “In our bulk business, continued strong volumes and earnings at our petroleum coke operations were more than offset by weakness in export coal, soda ash, and steel volumes.”
“The CO2 segment was negatively impacted versus the second quarter of 2019 primarily by lower crude and CO2 volumes, as well as lower NGL prices, partially offset by lower operating expenditures. Our weighted average NGL price for the quarter was down $7.74 per barrel, or 33 percent from the second quarter of 2019. Our realized weighted average crude oil price for the quarter was up 1 percent at $50.31 per barrel compared to $49.95 per barrel for the second quarter of 2019, largely driven by our Midland/Cushing basis hedges,” said Dang. “Second quarter 2020 combined oil production across all of our fields was down 13 percent compared to the same period in 2019 on a net to KMI basis.”
Other News
Corporate
Natural Gas Pipelines
Terminals
CO2
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Our mission is to provide energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of people, communities and businesses. Our vision is delivering energy to improve lives and create a better world. We own an interest in or operate approximately 83,000 miles of pipelines and 147 terminals. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2 and other products, and our terminals store and handle various commodities including gasoline, diesel fuel chemicals, ethanol, metals and petroleum coke. For more information, please visit www.kindermorgan.com.
Please join Kinder Morgan, Inc. at 4:30 p.m. Eastern Time on Wednesday, July 22, at www.kindermorgan.com for a LIVE webcast conference call on the company’s second quarter earnings. A supplemental Investor Update presentation is also available on the same page as the webcast link.
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 (loss) income 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 (loss) 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). (See the accompanying Tables 4 and 7.)
Adjusted Earnings is calculated by adjusting net (loss) income attributable to Kinder Morgan, Inc. for Certain Items. Adjusted Earnings is used by us and 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 (loss) income to Kinder Morgan, Inc. Adjusted Earnings per share uses Adjusted Earnings and applies the same two-class method used in arriving at basic earnings per common share. (See the accompanying Tables 1 and 2.)
DCF is calculated by adjusting net (loss) income attributable to Kinder Morgan, Inc. for Certain Items (Adjusted Earnings), and further by DD&A and amortization of excess cost of equity investments, income tax expense, cash taxes, sustaining capital expenditures and other items. DCF is a significant performance measure useful to management and external users of our financial statements in evaluating our performance and in measuring and estimating the ability of our assets to generate cash earnings after servicing our debt, 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. DCF should not be used as an alternative to net cash provided by operating activities computed under GAAP. We believe the GAAP measure most directly comparable to DCF is net (loss) income to Kinder Morgan, Inc. DCF per common share is DCF divided by average outstanding common shares, including restricted stock awards that participate in common share dividends. (See the accompanying Tables 2 and 3.)
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 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 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, and DD&A, including amortization of excess cost of equity investments, (EBITDA) for Certain Items, KMI’s share of unconsolidated joint venture (JV) DD&A and income tax expense (net of our partners’ share of consolidating JV DD&A and income tax expense), and net income attributable to noncontrolling interests that is further adjusted for KML noncontrolling interests (net of its applicable Certain Items) for the periods presented through KML’s sale on December 16, 2019. 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 (loss) income. (See the accompanying Tables 3 and 4.)
Net Debt, as used in this news release, is a non-GAAP financial measure that management believes are useful to investors and other users of our financial information in evaluating our leverage. Net Debt is calculated by subtracting from debt (i) cash and cash equivalents, (ii) the preferred interest in the general partner of Kinder Morgan Energy Partners L.P. (which was redeemed in January 2020), (iii) debt fair value adjustments and (iv) the foreign exchange impact on Euro-denominated bonds for which we have entered into currency swaps. We believe the most comparable measure to Net Debt is debt net of cash and cash equivalents as reconciled in the notes to the accompanying Preliminary Consolidated Balance Sheets in Table 6.
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.)
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 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 in this news release include, among others, express or implied statements pertaining to: the long-term demand for KMI’s assets and services; the future impact on our business of the global economic consequences of the COVID-19 pandemic, KMI’s expected DCF and Adjusted EBITDA for 2020 and expected Net Debt-to-Adjusted EBITDA ratio at the end of 2020; anticipated dividends; and KMI’s capital projects, including expected completion timing and benefits of those projects. 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 as to when or if any such forward-looking statements will materialize nor their ultimate impact on our operations or financial condition. In addition to the risk factors described herein, other 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, 2019 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (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.
Table 1 |
||||||||||||||||||||||||||
Kinder Morgan, Inc. and Subsidiaries |
||||||||||||||||||||||||||
Preliminary Consolidated Statements of Operations |
||||||||||||||||||||||||||
(In millions, except per share amounts, unaudited) |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Three Months Ended
|
|
%
|
|
Six Months Ended
|
|
%
|
|||||||||||||||||||
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
|||||||||||||||||
Revenues |
$ |
2,560 |
|
|
$ |
3,214 |
|
|
|
|
$ |
5,666 |
|
|
$ |
6,643 |
|
|
|
|||||||
Operating costs, expenses and other |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Costs of sales |
441 |
|
|
777 |
|
|
|
|
1,104 |
|
|
1,725 |
|
|
|
|||||||||||
Operations and maintenance |
606 |
|
|
646 |
|
|
|
|
1,226 |
|
|
1,244 |
|
|
|
|||||||||||
Depreciation, depletion and amortization |
532 |
|
|
579 |
|
|
|
|
1,097 |
|
|
1,172 |
|
|
|
|||||||||||
General and administrative |
155 |
|
|
148 |
|
|
|
|
308 |
|
|
302 |
|
|
|
|||||||||||
Taxes, other than income taxes |
103 |
|
|
103 |
|
|
|
|
195 |
|
|
221 |
|
|
|
|||||||||||
Loss (gain) on impairments and divestitures, net |
1,005 |
|
|
(10 |
) |
|
|
|
1,976 |
|
|
(10 |
) |
|
|
|||||||||||
Other income, net |
— |
|
|
(2 |
) |
|
|
|
(1 |
) |
|
(2 |
) |
|
|
|||||||||||
Total operating costs, expenses and other |
2,842 |
|
|
2,241 |
|
|
|
|
5,905 |
|
|
4,652 |
|
|
|
|||||||||||
Operating (loss) income |
(282 |
) |
|
973 |
|
|
|
|
(239 |
) |
|
1,991 |
|
|
|
|||||||||||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Earnings from equity investments |
176 |
|
|
161 |
|
|
|
|
368 |
|
|
353 |
|
|
|
|||||||||||
Amortization of excess cost of equity investments |
(35 |
) |
|
(19 |
) |
|
|
|
(67 |
) |
|
(40 |
) |
|
|
|||||||||||
Interest, net |
(395 |
) |
|
(452 |
) |
|
|
|
(831 |
) |
|
(912 |
) |
|
|
|||||||||||
Other, net |
16 |
|
|
13 |
|
|
|
|
18 |
|
|
23 |
|
|
|
|||||||||||
(Loss) income before income taxes |
(520 |
) |
|
676 |
|
|
|
|
(751 |
) |
|
1,415 |
|
|
|
|||||||||||
Income tax expense |
(104 |
) |
|
(148 |
) |
|
|
|
(164 |
) |
|
(320 |
) |
|
|
|||||||||||
Net (loss) income |
(624 |
) |
|
528 |
|
|
|
|
(915 |
) |
|
1,095 |
|
|
|
|||||||||||
Net income attributable to NCI |
(13 |
) |
|
(10 |
) |
|
|
|
(28 |
) |
|
(21 |
) |
|
|
|||||||||||
Net (loss) income attributable to Kinder Morgan, Inc. |
$ |
(637 |
) |
|
$ |
518 |
|
|
|
|
(943 |
) |
|
1,074 |
|
|
|
|||||||||
Class P Shares |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Basic and diluted (loss) earnings per common share |
$ |
(0.28 |
) |
|
$ |
0.23 |
|
|
(222 |
) |
% |
|
$ |
(0.42 |
) |
|
$ |
0.47 |
|
|
(189 |
) |
% |
|||
Basic and diluted weighted average common shares outstanding |
2,261 |
|
|
2,262 |
|
|
— |
|
% |
|
2,263 |
|
|
2,262 |
|
|
— |
|
% |
|||||||
Declared dividends per common share |
$ |
0.2625 |
|
|
$ |
0.25 |
|
|
5 |
|
% |
|
$ |
0.525 |
|
|
$ |
0.50 |
|
|
5 |
|
% |
|||
Adjusted Earnings (1) |
$ |
381 |
|
|
$ |
493 |
|
|
(23 |
) |
% |
|
$ |
922 |
|
|
$ |
1,064 |
|
|
(13 |
) |
% |
|||
Adjusted Earnings per common share (1) |
$ |
0.17 |
|
|
$ |
0.22 |
|
|
(23 |
) |
% |
|
$ |
0.40 |
|
|
$ |
0.47 |
|
|
(15 |
) |
% |
Note |
||
(1) |
Adjusted Earnings is Net (loss) income attributable to Kinder Morgan, Inc. adjusted for Certain Items, see Table 2. Adjusted Earnings per common share uses Adjusted Earnings and applies the same two-class method used in arriving at basic (loss) earnings per common share. |
Table 2 |
|||||||||||||||||||||||
Kinder Morgan, Inc. and Subsidiaries |
|||||||||||||||||||||||
Preliminary Net (Loss) Income Attributable to Kinder Morgan, Inc. to Adjusted Earnings to DCF Reconciliation |
|||||||||||||||||||||||
(Unaudited, in millions) |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
%
|
|
Six Months Ended
|
|
%
|
||||||||||||||||
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
||||||||||||||
Net (loss) income attributable to Kinder Morgan, Inc. (GAAP) |
$ |
(637 |
) |
|
$ |
518 |
|
|
|
|
$ |
(943 |
) |
|
$ |
1,074 |
|
|
|
||||
Total Certain Items |
1,018 |
|
|
(25 |
) |
|
|
|
1,865 |
|
|
(10 |
) |
|
|
||||||||
Adjusted Earnings (1) |
381 |
|
|
493 |
|
|
(23 |
) |
% |
|
922 |
|
|
1,064 |
|
|
(13 |
) |
% |
||||
DD&A and amortization of excess cost of equity investments for DCF (2) |
659 |
|
|
691 |
|
|
|
|
1,350 |
|
|
1,399 |
|
|
|
||||||||
Income tax expense for DCF (1)(2) |
132 |
|
|
162 |
|
|
|
|
313 |
|
|
357 |
|
|
|
||||||||
Cash taxes (3) |
(5 |
) |
|
(51 |
) |
|
|
|
(8 |
) |
|
(64 |
) |
|
|
||||||||
Sustaining capital expenditures (3) |
(159 |
) |
|
(189 |
) |
|
|
|
(300 |
) |
|
(304 |
) |
|
|
||||||||
Other items (4) |
(7 |
) |
|
22 |
|
|
|
|
(15 |
) |
|
47 |
|
|
|
||||||||
DCF |
$ |
1,001 |
|
|
$ |
1,128 |
|
|
(11 |
) |
% |
|
$ |
2,262 |
|
|
$ |
2,499 |
|
|
(9 |
) |
% |
Table 3 |
|
|||||||||||||||||||||||
Kinder Morgan, Inc. and Subsidiaries |
|
|||||||||||||||||||||||
Preliminary Adjusted Segment EBDA, Adjusted EBITDA and DCF |
|
|||||||||||||||||||||||
(Unaudited, in millions, except per share amounts) |
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
%
|
|
Six Months Ended
|
|
%
|
|
||||||||||||||||
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
|
||||||||||||||
Natural Gas Pipelines |
$ |
1,016 |
|
|
$ |
1,071 |
|
|
(5 |
) |
% |
|
$ |
2,195 |
|
|
$ |
2,272 |
|
|
(3 |
) |
% |
|
Products Pipelines |
227 |
|
|
307 |
|
|
(26 |
) |
% |
|
500 |
|
|
600 |
|
|
(17 |
) |
% |
|
||||
Terminals |
229 |
|
|
290 |
|
|
(21 |
) |
% |
|
486 |
|
|
589 |
|
|
(17 |
) |
% |
|
||||
CO2 |
156 |
|
|
184 |
|
|
(15 |
) |
% |
|
331 |
|
|
373 |
|
|
(11 |
) |
% |
|
||||
Adjusted Segment EBDA (1) |
1,628 |
|
|
1,852 |
|
|
(12 |
) |
% |
|
3,512 |
|
|
3,834 |
|
|
(8 |
) |
% |
|
||||
General and administrative and corporate charges (1) |
(157 |
) |
|
(152 |
) |
|
|
|
(297 |
) |
|
(310 |
) |
|
|
|
||||||||
KMI's share of JV DD&A and income tax expense (1)(5) |
110 |
|
|
119 |
|
|
|
|
229 |
|
|
245 |
|
|
|
|
||||||||
Net income Attributable to NCI (net of KML NCI and Certain Items) (1) |
(13 |
) |
|
(2 |
) |
|
|
|
(28 |
) |
|
(5 |
) |
|
|
|
||||||||
Adjusted EBITDA |
1,568 |
|
|
1,817 |
|
|
(14 |
) |
% |
|
3,416 |
|
|
3,764 |
|
|
(9 |
) |
% |
|
||||
Interest, net (1) |
(396 |
) |
|
(455 |
) |
|
|
|
(831 |
) |
|
(913 |
) |
|
|
|
||||||||
Cash taxes (3) |
(5 |
) |
|
(51 |
) |
|
|
|
(8 |
) |
|
(64 |
) |
|
|
|
||||||||
Sustaining capital expenditures (3) |
(159 |
) |
|
(189 |
) |
|
|
|
(300 |
) |
|
(304 |
) |
|
|
|
||||||||
KML NCI DCF adjustments (6) |
— |
|
|
(16 |
) |
|
|
|
— |
|
|
(31 |
) |
|
|
|
||||||||
Other items (4) |
(7 |
) |
|
22 |
|
|
|
|
(15 |
) |
|
47 |
|
|
|
|
||||||||
DCF |
$ |
1,001 |
|
|
$ |
1,128 |
|
|
(11 |
) |
% |
|
$ |
2,262 |
|
|
$ |
2,499 |
|
|
(9 |
) |
% |
|
Weighted average common shares outstanding for dividends (7) |
2,274 |
|
|
2,275 |
|
|
|
|
2,275 |
|
|
2,275 |
|
|
|
|
||||||||
DCF per common share |
$ |
0.44 |
|
|
$ |
0.50 |
|
|
|
|
$ |
0.99 |
|
|
$ |
1.10 |
|
|
|
|
||||
Declared dividends per common share |
$ |
0.2625 |
|
|
$ |
0.25 |
|
|
|
|
$ |
0.525 |
|
|
$ |
0.50 |
|
|
|
|
Notes |
||
(1) |
Amounts are adjusted for Certain Items. See Tables 4 and 7 for more information. |
|
(2) |
Includes KMI's share of DD&A or income tax expense from JVs, as applicable. 2019 amounts are also net of DD&A or income tax expense Attributable to KML NCI. |
|
(3) |
Includes KMI's share of cash taxes or sustaining capital expenditures from JVs, as applicable. |
|
(4) |
Includes non-cash pension expense and non-cash compensation associated with our restricted stock program. |
|
(5) |
KMI's share of unconsolidated JV DD&A and income tax expense, net of consolidating JV partners' share of DD&A. |
|
(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. |
|
(7) |
Includes restricted stock awards that participate in common share dividends. |
Table 4 |
|||||||||||||||||||||||
Kinder Morgan, Inc. and Subsidiaries |
|||||||||||||||||||||||
Preliminary Net (Loss) Income to Adjusted EBITDA Reconciliation |
|||||||||||||||||||||||
(Unaudited, in millions) |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
%
|
|
Six Months Ended
|
|
%
|
||||||||||||||||
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
||||||||||||||
Net (loss) income (GAAP) |
$ |
(624 |
) |
|
$ |
528 |
|
|
(218 |
) |
% |
|
$ |
(915 |
) |
|
$ |
1,095 |
|
|
(184 |
) |
% |
Certain Items: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value amortization |
(4 |
) |
|
(7 |
) |
|
|
|
(12 |
) |
|
(15 |
) |
|
|
||||||||
Legal, environmental and taxes other than income tax reserves |
— |
|
|
— |
|
|
|
|
(8 |
) |
|
17 |
|
|
|
||||||||
Change in fair value of derivative contracts (1) |
32 |
|
|
(18 |
) |
|
|
|
(4 |
) |
|
(8 |
) |
|
|
||||||||
(Gain) loss on impairments and divestitures, net (2) |
— |
|
|
(7 |
) |
|
|
|
371 |
|
|
(5 |
) |
|
|
||||||||
Loss on impairment of goodwill (3) |
1,000 |
|
|
— |
|
|
|
|
1,600 |
|
|
— |
|
|
|
||||||||
Income tax Certain Items |
(10 |
) |
|
5 |
|
|
|
|
(106 |
) |
|
7 |
|
|
|
||||||||
NCI associated with Certain Items |
— |
|
|
(1 |
) |
|
|
|
— |
|
|
(1 |
) |
|
|
||||||||
Other |
— |
|
|
3 |
|
|
|
|
24 |
|
|
(5 |
) |
|
|
||||||||
Total Certain Items |
1,018 |
|
|
(25 |
) |
|
|
|
1,865 |
|
|
(10 |
) |
|
|
||||||||
DD&A and amortization of excess cost of equity investments |
567 |
|
|
598 |
|
|
|
|
1,164 |
|
|
1,212 |
|
|
|
||||||||
Income tax expense (4) |
114 |
|
|
143 |
|
|
|
|
270 |
|
|
313 |
|
|
|
||||||||
KMI's share of JV DD&A and income tax expense (4)(5) |
110 |
|
|
119 |
|
|
|
|
229 |
|
|
245 |
|
|
|
||||||||
Interest, net (4) |
396 |
|
|
455 |
|
|
|
|
831 |
|
|
913 |
|
|
|
||||||||
Net income attributable to NCI (net of KML NCI (4)) |
(13 |
) |
|
(1 |
) |
|
|
|
(28 |
) |
|
(4 |
) |
|
|
||||||||
Adjusted EBITDA |
$ |
1,568 |
|
|
$ |
1,817 |
|
|
(14 |
) |
% |
|
$ |
3,416 |
|
|
$ |
3,764 |
|
|
(9 |
) |
% |
Notes |
|
|
|
|
|
|
||
(1) |
Gains or losses are reflected in our DCF when realized. |
|||||||
(2) |
Six months ended June 30, 2020 amount includes a pre-tax non-cash impairment loss of $350 million related to oil and gas producing assets in our CO2 business segment driven by low oil prices and $21 million for asset impairments in our Products Pipelines business segment, which are reported within “Loss (gain) on impairments and divestitures, net” on the accompanying Preliminary Consolidated Statement of Operations. (See Table 1.) |
|||||||
(3) |
Three and six months ended June 30, 2020 amounts include a non-cash impairment of goodwill associated with our Natural Gas Pipelines Non-regulated reporting unit. Six months ended June 30, 2020 also includes a non-cash impairment of goodwill associated with our CO2 reporting unit. |
|||||||
(4) |
Amounts are adjusted for Certain Items. See Table 7 for more information. |
|||||||
(5) |
KMI's share of unconsolidated JV DD&A and income tax expense, net of consolidating JV partners' share of DD&A. |
Table 5 |
||||||||||||||||||||
Volume and CO2 Segment Hedges Highlights |
||||||||||||||||||||
(Historical pro forma for acquired and divested assets, JV volumes at KMI share) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||||||
Natural Gas Pipelines |
|
|
|
|
|
|
|
|||||||||||||
Transport volumes (BBtu/d) |
35,733 |
|
|
34,790 |
|
|
37,414 |
|
|
35,413 |
|
|||||||||
Sales volumes (BBtu/d) |
2,112 |
|
|
2,323 |
|
|
2,303 |
|
|
2,327 |
|
|||||||||
Gathering volumes (BBtu/d) |
3,043 |
|
|
3,323 |
|
|
3,202 |
|
|
3,312 |
|
|||||||||
NGLs (MBbl/d) (1) |
29 |
|
|
32 |
|
|
30 |
|
|
32 |
|
|||||||||
Products Pipelines (MBbl/d) |
|
|
|
|
|
|
|
|||||||||||||
Gasoline (2) |
762 |
|
|
1,090 |
|
|
862 |
|
|
1,035 |
|
|||||||||
Diesel fuel |
371 |
|
|
379 |
|
|
365 |
|
|
358 |
|
|||||||||
Jet fuel |
98 |
|
|
303 |
|
|
196 |
|
|
298 |
|
|||||||||
Total refined product volumes |
1,231 |
|
|
1,772 |
|
|
1,423 |
|
|
1,691 |
|
|||||||||
Crude and condensate |
479 |
|
|
651 |
|
|
590 |
|
|
647 |
|
|||||||||
Total delivery volumes (MBbl/d) |
1,710 |
|
|
2,423 |
|
|
2,013 |
|
|
2,338 |
|
|||||||||
Terminals (1) |
|
|
|
|
|
|
|
|||||||||||||
Liquids leasable capacity (MMBbl) |
79.4 |
|
|
79.3 |
|
|
79.4 |
|
|
79.3 |
|
|||||||||
Liquids utilization % |
95.5 |
% |
|
93.4 |
% |
|
95.5 |
% |
|
93.4 |
% |
|||||||||
Bulk transload tonnage (MMtons) |
11.1 |
|
|
14.2 |
|
|
24.0 |
|
|
27.9 |
|
|||||||||
CO2 |
|
|
|
|
|
|
|
|||||||||||||
SACROC oil production |
22.03 |
|
|
24.44 |
|
|
22.61 |
|
|
24.44 |
|
|||||||||
Yates oil production |
6.62 |
|
|
7.26 |
|
|
6.83 |
|
|
7.26 |
|
|||||||||
Katz and Goldsmith oil production |
2.48 |
|
|
3.85 |
|
|
2.92 |
|
|
3.98 |
|
|||||||||
Tall Cotton oil production |
1.82 |
|
|
2.37 |
|
|
2.12 |
|
|
2.49 |
|
|||||||||
Total oil production - net (MBbl/d) (3) |
32.95 |
|
|
37.92 |
|
|
34.48 |
|
|
38.17 |
|
|||||||||
NGL sales volumes - net (MBbl/d) (3) |
9.39 |
|
|
10.36 |
|
|
9.61 |
|
|
10.23 |
|
|||||||||
CO2 production - net (Bcf/d) |
0.42 |
|
|
0.61 |
|
|
0.49 |
|
|
0.62 |
|
|||||||||
Realized weighted average oil price per Bbl |
$ |
50.31 |
|
|
$ |
49.95 |
|
|
$ |
52.56 |
|
|
$ |
49.31 |
|
|||||
Realized weighted average NGL price per Bbl |
$ |
15.84 |
|
|
$ |
23.58 |
|
|
$ |
17.84 |
|
|
$ |
24.75 |
|
|||||
CO2 Segment Hedges |
Remaining
|
|
2021 |
|
2022 |
|
2023 |
|
2024 |
|||||||||||
Crude Oil (4) |
|
|
|
|
|
|
|
|
|
|||||||||||
Price ($/barrel) |
$ |
55.84 |
|
$ |
53.48 |
|
|
$ |
53.28 |
|
|
$ |
50.14 |
|
|
$ |
43.03 |
|
||
Volume (barrels per day) |
30,948 |
|
17,400 |
|
|
8,400 |
|
|
5,150 |
|
|
850 |
||||||||
NGLs |
|
|
|
|
|
|
|
|
|
|||||||||||
Price ($/barrel) |
$ |
27.62 |
|
$ |
24.39 |
|
|
|
|
|
|
|
||||||||
Volume (barrels per day) |
6,065 |
|
575 |
|
|
|
|
|
|
|
||||||||||
Midland-to-Cushing Basis Spread |
|
|
|
|
|
|
|
|
|
|||||||||||
Price ($/barrel) |
$ |
0.14 |
|
|
|
|
|
|
|
|
||||||||||
Volume (barrels per day) |
31,100 |
|
|
|
|
|
|
|
|
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 |
|||||||
Kinder Morgan, Inc. and Subsidiaries |
|||||||
Preliminary Consolidated Balance Sheets |
|||||||
(Unaudited, in millions) |
|||||||
|
|
|
|
||||
|
June 30, |
|
December 31, |
||||
|
2020 |
|
2019 |
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
526 |
|
|
$ |
185 |
|
Other current assets |
1,964 |
|
|
3,053 |
|
||
Property, plant and equipment, net |
36,027 |
|
|
36,419 |
|
||
Investments |
7,892 |
|
|
7,759 |
|
||
Goodwill |
19,851 |
|
|
21,451 |
|
||
Deferred charges and other assets |
5,524 |
|
|
5,290 |
|
||
Total assets |
$ |
71,784 |
|
|
$ |
74,157 |
|
Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity |
|
|
|
||||
Short-term debt |
$ |
3,006 |
|
|
$ |
2,377 |
|
Preferred interest in general partner of KMP |
— |
|
|
100 |
|
||
Other current liabilities |
2,196 |
|
|
2,623 |
|
||
Long-term debt |
29,976 |
|
|
30,883 |
|
||
Debt fair value adjustments |
1,465 |
|
|
1,032 |
|
||
Other |
2,249 |
|
|
2,253 |
|
||
Total liabilities |
38,892 |
|
|
39,268 |
|
||
Redeemable Noncontrolling Interest |
768 |
|
|
803 |
|
||
Other shareholders' equity |
31,952 |
|
|
34,075 |
|
||
Accumulated other comprehensive loss |
(199 |
) |
|
(333 |
) |
||
KMI equity |
31,753 |
|
|
33,742 |
|
||
Noncontrolling interests |
371 |
|
|
344 |
|
||
Total shareholders' equity |
32,124 |
|
|
34,086 |
|
||
Total liabilities, redeemable noncontrolling interest and shareholders' equity |
$ |
71,784 |
|
|
$ |
74,157 |
|
|
|
|
|
||||
Net Debt (1) |
$ |
32,409 |
|
|
$ |
33,031 |
|
|
|
|
|
||||
|
Adjusted EBITDA Twelve Months Ended |
||||||
|
June 30, |
|
December 31, |
||||
Reconciliation of Net Income to Adjusted EBITDA |
2020 |
|
2019 |
||||
Net income (GAAP) |
$ |
230 |
|
|
$ |
2,239 |
|
Total Certain Items |
1,846 |
|
|
(29 |
) |
||
Net income attributable to NCI (net of KML NCI) (2) |
(41 |
) |
|
(16 |
) |
||
DD&A and amortization of excess cost of equity investments |
2,445 |
|
|
2,494 |
|
||
Income tax expense (3) |
584 |
|
|
627 |
|
||
KMI's share of JV DD&A and income tax expense (3) |
472 |
|
|
487 |
|
||
Interest, net (3) |
1,734 |
|
|
1,816 |
|
||
Adjusted EBITDA |
$ |
7,270 |
|
|
$ |
7,618 |
|
|
|
|
|
||||
Net Debt to Adjusted EBITDA |
4.5 |
|
|
4.3 |
|
Notes |
||
(1) |
Amounts exclude: (i) the preferred interest in general partner of KMP (which was redeemed in January 2020); (ii) debt fair value adjustments; and (iii) the foreign exchange impact on our Euro denominated debt of $47 million and $44 million as of June 30, 2020 and December 31, 2019, respectively, as we have entered into swaps to convert that debt to U.S.$. |
|
(2) |
2020 and 2019 amounts are net of KML NCI, for periods through its December 15, 2019 sale, of $16 million and $33 million, respectively. |
|
(3) |
Amounts are adjusted for Certain Items. |
Table 7 |
||||||||||||||||
Kinder Morgan, Inc. and Subsidiaries |
||||||||||||||||
Preliminary Supplemental Information |
||||||||||||||||
(Unaudited, in millions) |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||||||
Segment EBDA |
|
|
|
|
||||||||||||
Natural Gas Pipelines (GAAP) |
$ |
(3 |
) |
|
$ |
1,088 |
|
|
$ |
1,193 |
|
|
$ |
2,291 |
|
|
Certain Items |
|
1,019 |
|
|
|
(17 |
) |
|
|
1,002 |
|
|
|
(19 |
) |
|
Natural Gas Pipelines Adjusted Segment EBDA |
|
1,016 |
|
|
|
1,071 |
|
|
|
2,195 |
|
|
|
2,272 |
|
|
Products Pipelines (GAAP) |
|
227 |
|
|
|
307 |
|
|
|
496 |
|
|
|
583 |
|
|
Certain Items |
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
17 |
|
|
Products Pipelines Adjusted Segment EBDA |
|
227 |
|
|
|
307 |
|
|
|
500 |
|
|
|
600 |
|
|
Terminals (GAAP) |
|
229 |
|
|
|
290 |
|
|
|
486 |
|
|
|
589 |
|
|
Certain Items |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Terminals Adjusted Segment EBDA |
|
229 |
|
|
|
290 |
|
|
|
486 |
|
|
|
589 |
|
|
CO2 (GAAP) |
|
146 |
|
|
|
196 |
|
|
|
(609 |
) |
|
|
394 |
|
|
Certain Items |
|
10 |
|
|
|
(12 |
) |
|
|
940 |
|
|
|
(21 |
) |
|
CO2 Adjusted Segment EBDA |
|
156 |
|
|
|
184 |
|
|
|
331 |
|
|
|
373 |
|
|
Kinder Morgan Canada (GAAP) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
Certain Items |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
Kinder Morgan Canada Adjusted Segment EBDA |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total Segment EBDA (GAAP) |
|
599 |
|
|
|
1,881 |
|
|
|
1,566 |
|
|
|
3,855 |
|
|
Total Segment EBDA Certain Items |
|
1,029 |
|
|
|
(29 |
) |
|
|
1,946 |
|
|
|
(21 |
) |
|
Total Adjusted Segment EBDA |
$ |
1,628 |
|
|
$ |
1,852 |
|
|
$ |
3,512 |
|
|
$ |
3,834 |
|
|
Depreciation, depletion and amortization (GAAP) |
$ |
(532 |
) |
|
$ |
(579 |
) |
|
$ |
(1,097 |
) |
|
$ |
(1,172 |
) |
|
Amortization of excess cost of equity investments (GAAP) |
|
(35 |
) |
|
|
(19 |
) |
|
|
(67 |
) |
|
|
(40 |
) |
|
DD&A and amortization of excess cost of equity investments |
|
(567 |
) |
|
|
(598 |
) |
|
|
(1,164 |
) |
|
|
(1,212 |
) |
|
KMI's share of JV DD&A |
|
(92 |
) |
|
|
(98 |
) |
|
|
(186 |
) |
|
|
(197 |
) |
|
DD&A attributable to KML NCI |
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
10 |
|
|
DD&A and amortization of excess cost of equity investments for DCF |
$ |
(659 |
) |
|
$ |
(691 |
) |
|
$ |
(1,350 |
) |
|
$ |
(1,399 |
) |
|
General and administrative (GAAP) |
$ |
(155 |
) |
|
$ |
(148 |
) |
|
$ |
(308 |
) |
|
$ |
(302 |
) |
|
Corporate charges |
|
(2 |
) |
|
|
(7 |
) |
|
|
(14 |
) |
|
|
(14 |
) |
|
Certain Items |
|
— |
|
|
|
3 |
|
|
|
25 |
|
|
|
6 |
|
|
General and administrative and corporate charges (1) |
$ |
(157 |
) |
|
$ |
(152 |
) |
|
$ |
(297 |
) |
|
$ |
(310 |
) |
|
Interest, net (GAAP) |
$ |
(395 |
) |
|
$ |
(452 |
) |
|
$ |
(831 |
) |
|
$ |
(912 |
) |
|
Certain Items |
|
(1 |
) |
|
|
(3 |
) |
|
|
— |
|
|
|
(1 |
) |
|
Interest, net (1) |
$ |
(396 |
) |
|
$ |
(455 |
) |
|
$ |
(831 |
) |
|
$ |
(913 |
) |
|
Income tax expense (GAAP) |
$ |
(104 |
) |
|
$ |
(148 |
) |
|
$ |
(164 |
) |
|
$ |
(320 |
) |
|
Certain Items |
|
(10 |
) |
|
|
5 |
|
|
|
(106 |
) |
|
|
7 |
|
|
Income tax expense (1) |
|
(114 |
) |
|
|
(143 |
) |
|
|
(270 |
) |
|
|
(313 |
) |
|
KMI's share of taxable JV income tax expense (1) |
|
(18 |
) |
|
|
(21 |
) |
|
|
(43 |
) |
|
|
(48 |
) |
|
Income tax expense attributable to KML NCI (1) |
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
4 |
|
|
Income tax expense for DCF (1) |
$ |
(132 |
) |
|
$ |
(162 |
) |
|
$ |
(313 |
) |
|
$ |
(357 |
) |
|
Net income attributable to KML NCI |
$ |
— |
|
|
$ |
(8 |
) |
|
$ |
— |
|
|
$ |
(16 |
) |
|
KML NCI associated with Certain Items |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
KML NCI (1) |
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
(17 |
) |
|
DD&A attributable to KML NCI |
|
— |
|
|
|
(5 |
) |
|
|
— |
|
|
|
(10 |
) |
|
Income tax expense attributable to KML NCI (1) |
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(4 |
) |
|
KML NCI DCF adjustments (1) |
$ |
— |
|
|
$ |
(16 |
) |
|
$ |
— |
|
|
$ |
(31 |
) |
|
Net income attributable to NCI (GAAP) |
$ |
(13 |
) |
|
$ |
(10 |
) |
|
$ |
(28 |
) |
|
$ |
(21 |
) |
|
Less: KML NCI (1) |
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
(17 |
) |
|
Net income attributable to NCI (net of KML NCI (1)) |
|
(13 |
) |
|
|
(1 |
) |
|
|
(28 |
) |
|
|
(4 |
) |
|
NCI associated with Certain Items |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
Net income attributable to NCI (net of KML NCI and Certain Items) |
$ |
(13 |
) |
|
$ |
(2 |
) |
|
$ |
(28 |
) |
|
$ |
(5 |
) |
|
Additional JV information |
|
|
|
|
|
|
|
|||||||||
KMI's share of JV DD&A |
$ |
(92 |
) |
|
$ |
(98 |
) |
|
$ |
(186 |
) |
|
$ |
(197 |
) |
|
KMI's share of JV income tax expense (1) |
|
(18 |
) |
|
|
(21 |
) |
|
|
(43 |
) |
|
|
(48 |
) |
|
KMI's share of JV DD&A and income tax expense (1) |
$ |
(110 |
) |
|
$ |
(119 |
) |
|
$ |
(229 |
) |
|
$ |
(245 |
) |
|
KMI's share of taxable JV cash taxes |
$ |
(6 |
) |
|
$ |
(34 |
) |
|
$ |
(10 |
) |
|
$ |
(34 |
) |
|
KMI's share of JV sustaining capital expenditures |
$ |
(26 |
) |
|
$ |
(31 |
) |
|
$ |
(52 |
) |
|
$ |
(50 |
) |
|
CO2 Segment EBDA (GAAP) to CO2 Segment Free Cash Flow Reconciliation |
|
|
|
|
|
|
|
|||||||||
CO2 Segment EBDA (GAAP) |
$ |
146 |
|
|
$ |
196 |
|
|
$ |
(609 |
) |
|
$ |
394 |
|
|
Certain Items: |
|
|
|
|
|
|
|
|||||||||
Change in fair value of derivative contracts |
|
10 |
|
|
|
(12 |
) |
|
|
(10 |
) |
|
|
(21 |
) |
|
Loss on impairments |
|
— |
|
|
|
— |
|
|
|
950 |
|
|
|
— |
|
|
CO2 Segment Certain Items |
|
10 |
|
|
|
(12 |
) |
|
|
940 |
|
|
|
(21 |
) |
|
Capital expenditures (2) |
|
(53 |
) |
|
|
(85 |
) |
|
|
(123 |
) |
|
|
(170 |
) |
|
CO2 Segment Free Cash Flow (1) |
$ |
103 |
|
|
$ |
99 |
|
|
$ |
208 |
|
|
$ |
203 |
|
Notes |
||
(1) |
Amounts are adjusted for Certain Items. |
|
(2) |
Includes sustaining and expansion capital expenditures for our CO2 segment. |
Table 8 |
||||||||||||||||||
Kinder Morgan, Inc. and Subsidiaries |
||||||||||||||||||
2020 Outlook Assumptions and Sensitivity |
||||||||||||||||||
Forecast as of July 20, 2020 |
||||||||||||||||||
(Unaudited) |
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||
Remaining 6 Months
|
Sensitivity Range |
Potential Impact to 2020 Adjusted EBITDA and DCF
|
||||||||||||||||
|
|
Natural
|
Products
|
Terminals |
CO2 |
Total |
||||||||||||
Natural Gas Gathering and Processing Volumes |
|
|
|
|
|
|||||||||||||
3,030 Bbtu/d |
+/- 5% |
$ |
14 |
|
|
|
$ |
14 |
||||||||||
Refined Products Volumes (gasoline, diesel and jet fuel) |
|
|
|
|
|
|
||||||||||||
1,619 MBbl/d for Products Pipelines |
||||||||||||||||||
(the following apply to both the Products Pipelines and Terminals segments) (1) |
+/- 5% |
|
$ |
17 |
$ |
5 |
|
$ |
22 |
|||||||||
Qtr 3: 12% reduction from budgeted quarter amount |
|
|
|
|
|
|
||||||||||||
Qtr 4: 5% - 6% reduction from budgeted quarter amount |
|
|
|
|
|
|
||||||||||||
Crude Oil & Condensate Pipeline Volumes |
|
|
|
|
|
|
||||||||||||
597 MBbl/d |
+/- 5% |
|
$ |
7 |
|
|
$ |
7 |
||||||||||
Crude Oil Production Volumes |
|
|
|
|
|
|
||||||||||||
44 MBbl/d, gross (31 MBbl/d, net) |
+/- 5% |
|
|
|
$ |
11 |
$ |
11 |
||||||||||
Crude Oil Price |
|
|
|
|
|
|
||||||||||||
$35/bbl |
+/- $1/bbl WTI |
$ |
0.1 |
$ |
0.6 |
|
$ |
0.2 |
$ |
0.9 |
||||||||
NGL to Crude Oil Price Ratio |
|
|
|
|
|
|
||||||||||||
Natural Gas Pipelines 50% and CO2 35% |
+/- 1% |
$ |
— |
|
|
$ |
0.2 |
$ |
0.2 |
|||||||||
|
|
|
|
|
Potential Impact to
|
|||||||||||||
1-Month/3-Month LIBOR Interest Rates (2) |
|
|
|
|
Total |
|||||||||||||
0.24% / 0.35% |
+/- 10-bp |
|
|
|
$ |
1.9 |
Purpose of Outlook Assumptions and Sensitivity: |
|
|
|
|
|
The above table provides key assumptions used in our 2020 forecast for the remaining 6 months of 2020 to incorporate the estimated impact of COVID-19 and commodity price declines. It also provides estimated financial impacts to 2020 Adjusted EBITDA and DCF for potential changes in those assumptions. These sensitivities are general estimates of anticipated impacts on our business segments and overall business of changes relative to our assumptions; the impact of actual changes may vary significantly depending on the affected asset, product and contract. |
Notes |
||
(1) |
Potential impact to 2020 Adjusted EBITDA and DCF for Terminals includes sensitivity to changes in petroleum coke volume. |
|
(2) |
Sensitivity considers a combination of the 1-month and 3-month LIBOR rates. As of June 30, 2020, we had approximately $8.0 billion of fixed-to-floating interest rate swaps on our long-term debt. In March 2020, we fixed the LIBOR component on $2.5 billion of our floating rate swaps through the end of 2020 only. As a result, approximately 17% of the principal amount of our debt balance as of June 30, 2020 was subject to variable interest rates—either as short-term or long-term variable rate debt obligations or as fixed-rate debt converted to variable rates through the use of interest rate swaps. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200722005785/en/
Dave Conover
Media Relations
(713) 420-6397
[email protected]
Investor Relations
(800) 348-7320
[email protected]
www.kindermorgan.com