Attached files
| file | filename |
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| 8-K - KINDER MORGAN ENERGY PARTNERS, L.P. FORM 8-K - KINDER MORGAN ENERGY PARTNERS L P | kmp8k09q4nr.htm |
Exhibit
99.1
|
Larry
Pierce
Media
Relations
(713)
369-9407
|
Mindy
Mills
Investor
Relations
(713)
369-9490
www.kindermorgan.com
|
KMP
DISTRIBUTABLE CASH FLOW UP 62% VERSUS 4Q 2008
KMP
Declares Quarterly Cash Distribution of $1.05 Per Unit
HOUSTON,
Jan. 20, 2010 – Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today reported
fourth quarter distributable cash flow before certain items of $341.8 million,
up 62 percent from $211.0 million for the same period last
year. Distributable cash flow per unit before certain items was $1.17
versus $0.81 per unit for the fourth quarter of 2008. Net income
attributable to KMP before certain items was $366.5 million compared to
$280.7 million for the same period last year. Including certain
items, net income attributable to KMP was $343.8 million versus $266.1
million for the fourth quarter of 2008. Certain items reduced net
income by almost $23 million for the quarter, primarily reflecting legal and
environmental reserves and hedge ineffectiveness, offset somewhat by insurance
reimbursements. KMP declared a cash distribution per common unit of
$1.05 ($4.20 annualized) payable on Feb. 12, 2010, to unitholders of record as
of Jan. 29, 2010.
For
the full year, KMP produced distributable cash flow before certain items of
$1.196 billion, up 12 percent from $1.067 billion in
2008. Distributable cash flow per unit before certain items for 2009
was $4.25 versus $4.15 in 2008. Net income attributable to KMP before
certain items for the full year was $1.325 billion compared to $1.338
billion in 2008. Including certain items, net income attributable to
KMP for 2009 was $1.291 billion compared to $1.305 billion in
2008.
Chairman
and CEO Richard D. Kinder said, “KMP had a very strong fourth quarter and year,
overcoming lingering economic headwinds to generate enough cash flow to fully
cover our annual distribution target of $4.20 per unit and end 2009 with $14
million of excess coverage, consistent with our budget. Our stable,
cash producing assets, combined with reduced internal
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costs
and lower interest rates, helped offset various economic headwinds that impacted
our businesses during 2009, including lower refined products transportation
volumes, decreased steel handling at our bulk terminals, lower crude oil prices
and a difficult business environment for our Texas Intrastate
pipelines.
“It
was very gratifying to achieve our financial target of $4.20 per unit, a 4.5
percent increase over our 2008 cash distributions. Our results were
truly generated by the herculean efforts of our 7,800 employees, and I couldn’t
be more proud of them. Also in 2009, we continued to position KMP for
future growth through our capital investment program, spending about $3.3
billion on new infrastructure projects, organic expansions and
acquisitions. Looking ahead to 2010, KMP expects to pay cash
distributions of $4.40 per unit, a 4.8 percent increase over the $4.20 per unit
we distributed in 2009.”
Overview of Business
Segments
Products
Pipelines produced full year segment earnings before DD&A and certain
items of $635.1 million, up 11 percent from $571.5 million in 2008, and
exceeding its published annual budget of 10 percent growth. “All of
the assets in this segment generated higher earnings in 2009 than in 2008,
driven by strong performances at our Pacific, West Coast Terminals, Central
Florida and Transmix operations,” Kinder said. He noted that reduced
fuel and power costs, lower operating expenses, and ethanol storage and blending
revenues helped overcome the decrease in transport volumes this segment
experienced in 2009, which resulted from ongoing weak economic
conditions.
This
segment reported fourth quarter earnings before DD&A and certain items of
$164.6 million, up 7 percent from $153.2 million for the comparable period
in 2008. In the fourth quarter, growth was driven by higher revenues
on the Pacific, Plantation and CALNEV pipeline systems, along with higher
ethanol revenues at Central Florida. Cochin’s results declined
compared to the fourth quarter last year due to higher Canadian income
taxes.
Full
year total refined products revenues were up 1.7 percent and volumes were
down 2.8 percent (2.5 percent adjusted for leap year) versus
2008. Excluding Plantation, revenues were up 3 percent and
volumes were down 4.2 percent (3.9 percent adjusted for leap
year). Including ethanol transported via pipeline, gasoline volumes
for 2009 in this segment were up
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0.4
percent, while diesel was down 9.3 percent and jet fuel declined 5.1
percent. In the fourth quarter, total refined products revenues were
up 6 percent and volumes were down 1.7 percent. Excluding Plantation,
fourth quarter revenues were up 5.1 percent and volumes were down
2.9 percent. Including ethanol transported via pipeline,
gasoline volumes were up 0.1 percent, while diesel declined 6.6 percent and jet
fuel was down 1.6 percent compared to the fourth quarter of
2008. Additionally, this segment’s terminals and pipelines handled
approximately 6.1 million barrels of ethanol in the fourth quarter and 22.0
million barrels for the full year. This represents an increase of 11
percent and 21 percent for the quarter and the full year,
respectively. “While the growing use of ethanol as a part of our
country’s fuel supply tends to reduce our pipeline volumes, our investments in
ethanol storage and blending infrastructure at our terminals has allowed us to
make up for this in our revenues and cash flows,” Kinder noted.
The
Natural
Gas Pipelines business produced full year segment earnings before
DD&A and certain items of $787.5 million, up 5 percent from $746.8 million
in 2008, but below its published annual budget of 11 percent
growth. “Growth in 2009 versus 2008 was driven by the completion of
three large natural gas pipeline projects – Rockies Express, Midcontinent
Express and Kinder Morgan Louisiana – strong performance from the Kinder Morgan
Interstate Gas Transmission system and contributions from our newly acquired
treating operations in the fourth quarter,” Kinder said. “Conversely,
we fell short of our annual target due to in-service delays on the REX and MEP
projects and ongoing weak economic conditions, which created a difficult
business environment for our Texas Intrastate pipelines.”
This
segment reported fourth quarter segment earnings before DD&A and certain
items of $226.0 million, up 14 percent from $198.8 million for the same
period last year. While the remainder of REX-East came online in
November, a subsequent girth weld failure resulted in approximately 60 miles of
the pipeline being shut down. A force majeure remains in effect on
this portion of the pipeline and the impact on earnings in the fourth quarter
was approximately $16 million. This was partially offset by a good
performance from the previously noted and recently acquired natural gas treating
assets.
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Segment
transport volumes were up 14 percent for 2009 and 17 percent in the fourth
quarter versus the previous comparable periods, and sales volumes on the Texas
Intrastates declined 8 percent for the year and 7 percent in the
quarter
The CO2
business generated full year segment earnings before DD&A and certain items
of $796.4 million, up almost 5 percent from $760.2 million in 2008, and
approximately on target with its published annual budget of 5 percent
growth. The annual KMP budget,
which was initially announced in November 2008, assumed an average West Texas
Intermediate (WTI) crude oil price of $68 per barrel for the
year. The average WTI crude oil price per barrel for 2009 was $61.80,
compared to $99.65 for 2008.
“Growth
in this segment in 2009 over 2008 was spearheaded by an 8 percent increase in
oil production at SACROC, a 6 percent increase in CO2 delivery
volumes and a 13 percent increase in NGL sales volumes,” Kinder
said. “This strong performance, along with reduced operating and
capital costs, enabled this segment to overcome the significantly lower oil
prices that impacted unhedged volumes in this segment during 2009.”
The
CO2
segment reported fourth quarter segment earnings before DD&A and
certain items of $227.7 million, up 62 percent from $140.5 million for the
same period in 2008, when crude oil prices were much lower. The
average WTI crude oil price per barrel in the fourth quarter of 2009 was $76.19
compared to $58.74 for the fourth quarter last year. While NGL sales
volumes were very strong in the fourth quarter and SACROC production also rose,
production at Yates decreased slightly as did CO2 delivery
volumes (although the segment did achieve record CO2 production
during the year).
Average
oil production at SACROC for the full year was 30.1 thousand barrels per day
(MBbl/d), up 8 percent from 28.0 MBbl/d in 2008 and above
plan. At the Yates Field, average 2009 oil production was
26.5 MBbl/d, down from 27.6 MBbl/d in 2008 but right on
plan. For the fourth quarter, average oil production at SACROC was
29.9 MBbl/d versus 29.2 MBbl/d for the same period last year. At
Yates, fourth quarter average oil production was 26.4 MBbl/d compared to 26.7
MBbl/d in the same period last year. NGL sales volumes were up 13
percent for the year and 37 percent in the fourth quarter, due in part to the
impact of Hurricane Ike in 2008.
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The
CO2
segment is an area where KMP is exposed to commodity price risk, but that risk
is partially mitigated by a long-term hedging strategy intended to generate more
stable realized prices. The realized weighted average oil price per
barrel, with all hedges allocated to oil, was $49.55 for the year and $53.36 in
the quarter. The realized weighted average NGL price per barrel,
allocating none of the hedges to NGLs, was $37.96 for the year and $48.09 for
the quarter.
The
Terminals
business produced segment earnings before DD&A and certain items of $576.1
million, up 7 percent from $538.9 million in 2008, but below its published
annual budget of 14 percent growth. “Most of the growth in this
segment versus 2008 was organic and attributable to increased liquids capacity
at our large complex on the Houston Ship Channel, good performances at the Van
Wharves and North 40 terminals in Canada, strong petcoke and coal revenues, and
contributions from our Geismar, La., drumming facility which began operations in
the first quarter,” Kinder explained. “Conversely, we fell short of
our annual budget primarily due to weak economic conditions that resulted in a
25 percent decline in bulk tonnage, most of which occurred in our steel handling
business.”
This
segment reported fourth quarter segment earnings before DD&A and certain
items of $154.9 million, up 10 percent from $140.3 million for the
comparable period in 2008. Growth primarily represented increased
liquids throughput. Bulk handling throughput rebounded somewhat in
the third and fourth quarters of 2009 compared to the first two quarters of the
year. Additionally, this segment handled approximately 8.2 million
barrels of ethanol in the fourth quarter and 32.9 million barrels for the full
year. This represents an increase of 17 percent and 7 percent
for the quarter and full year, respectively.
Kinder
Morgan Canada produced full year segment earnings before DD&A and
certain items of $165.7 million, up 18 percent from $140.8 million in 2008, and
exceeding its published annual budget of 9 percent growth. Growth for
the year was attributable to good throughput on the Trans Mountain pipeline
system which was driven by strong ship traffic at the Port of Metro Vancouver,
the completion of the Anchor Loop expansion in the fourth quarter of 2008, the
acquisition of the Express-Platte pipeline system and a jet fuel pipeline from
Kinder Morgan,
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Inc.
in August of 2008 and a stronger Canadian dollar. Mainline throughput
volumes on Trans Mountain were up 18 percent for 2009 versus the previous
year.
For
the fourth quarter, this segment reported earnings before DD&A and certain
items of $40.6 million, up 8 percent from $37.6 million for the same period
in 2008.
Outlook
As
previously announced, KMP expects to declare cash distributions of $4.40 per
unit for 2010, a 4.8 percent increase over the $4.20 per unit it distributed in
2009. The company anticipates that its business segments will
generate almost $3.4 billion in segment earnings before DD&A, an increase of
almost $400 million over 2009. KMP expects to distribute
approximately $1.35 billion for 2010 to our limited
partners. Management anticipates investing approximately $1.5 billion
at KMP in expansions and small acquisitions in 2010 to further grow the
company. Approximately $400 million of the equity required for this
investment program will be funded by Kinder Morgan Management, LLC (NYSE: KMR)
dividends.
KMP’s
expectations assume an average WTI crude oil price of approximately $84 per
barrel in 2010, which approximates the current forward curve for next
year. The overwhelming majority of cash generated by KMP’s assets is
fee based and is not sensitive to commodity prices. In its CO2 segment,
the company hedges the majority of its oil production but does have exposure to
unhedged volumes, a significant portion of which are natural gas
liquids. For 2010, every $1 change in the average WTI crude oil price
per barrel is expected to impact the CO2 segment by
approximately $6 million (or less than 0.2 percent of our combined business
segments’ anticipated segment earnings before DD&A).
The
2010 budget will be discussed in detail during the company’s annual analyst
meeting on Jan. 28, 2010, in Houston, which will also be
webcast. Kinder Morgan remains committed to transparency and will
continue to publish its budget on the company’s web site, www.kindermorgan.com.
KMR
also expects to declare distributions of $4.40 per share for
2010.
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Other
News
Products
Pipelines
|
·
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KMP
completed modifications to its Central Florida pipeline system to more
efficiently move gasoline and ultra low sulfur diesel within the terminal
community at the Port of Tampa. The company modified existing
inter-terminal pipelines to provide BP with access to the port’s
deep-draft berths. The modifications also provide a platform
for other Port of Tampa terminals to tie-in to Kinder Morgan’s pipeline
system.
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·
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In
the last two months of the year, Kinder Morgan placed into service two new
storage tanks at its Orlando terminal to increase the facility’s total
storage capacity by 200,000 barrels. One of the tanks is for
ethanol and the other will be used to store petroleum
products.
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·
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KMP
invested approximately $15.8 million to install new ethanol and related
infrastructure at this segment’s terminals in California to facilitate
customer requirements to increase the ethanol blend rate to 10 percent,
consistent with recent California environmental
initiatives. All of the company’s California terminals began
blending ethanol at 10 percent effective Jan. 11,
2010.
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Natural
Gas Pipelines
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·
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The
remaining 195 miles of the REX Pipeline to Clarington, Ohio, went into
service Nov. 12, 2009. The 1,679-mile pipeline has a capacity
of 1.8 billion cubic feet (Bcf) per day. On Nov. 14, REX
experienced a girth weld failure downstream of the Chandlersville, Ohio,
compressor station (about 60 miles upstream from the terminus of the
system at Clarington). The force majeure declared east of
Chandlersville remains in effect. The failure has been repaired
and REX is coordinating with PHMSA on a return to service
plan. This segment of pipe is expected to return to service in
January. There are binding firm commitments from creditworthy
shippers for nearly all of the capacity on the pipeline, including a
compression expansion on the Entrega portion of REX. The first
leg of this expansion from Meeker, Colo., to Wamsutter, Wyo., began
service in December of 2009. The second leg of the expansion
from Wamsutter to the Cheyenne Hub in Colorado is expected to be completed
in July of 2010. Including expansions, the current estimate of
total construction costs on the entire REX project is $6.8
billion. REX is one of the largest natural gas pipelines ever
constructed in North America and is a joint venture of KMP, Sempra
Pipelines and Storage and
ConocoPhillips.
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·
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Development
of the new Fayetteville Express Pipeline (FEP) continues. The
project has received its FERC certificate and construction is expected to
begin this quarter. A joint venture with Energy Transfer
Partners, FEP is a 42-inch, 187-mile pipeline that will begin in Conway
County, Ark., and end in Panola County, Miss. FEP has secured
10-year binding commitments totaling 1.85 Bcf per day of
capacity. The pipeline will have an initial capacity of 2 Bcf
per day. Pending regulatory approvals, it is expected to be in
service by late 2010 or early 2011. The joint venture’s cost
estimate for this project remains at
$1.2 billion.
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· |
KMP
purchased the natural gas treating business from Crosstex Energy on Oct.
1, 2009, for approximately $266 million. KMP purchased
approximately 290 amine-treating and dew-point control plants
predominantly located in Texas and Louisiana, with additional facilities
in Mississippi, Oklahoma, Arkansas and
Kansas.
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·
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KMP
closed a transaction effective Nov. 1 to purchase a 40 percent interest in
the GMXR midstream natural gas gathering and compression business
(Endeavor) for approximately $36 million. These assets
provide gathering services to GMXR in its Cotton Valley Sands and
Haynesville/Bossier Shale horizontal developments in East
Texas.
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·
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Approximately
$14 million in capital improvements are being made at the Huntsman Storage
facility in Nebraska. Incremental storage capacity arising from
the expansion project is contracted under a firm service agreement for a
five-year term. Initial service of the new facilities is
expected to commence in February of
2010.
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Terminals
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·
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On
Jan. 15, KMP acquired three unit train ethanol handling terminals from
U.S. Development Group (USD) for approximately $195 million, including
over $80 million in KMP equity issued to the seller. The
transaction includes KMP’s acquisition of terminals in Linden, N.J.,
Baltimore, Md., and Dallas, Texas, and the formation of a joint venture
with USD to coordinate access to these terminals, other assets KMP already
owns and operates, and other projects under development. This
will create a nationwide distribution network of ethanol handling
facilities connected by rail, marine, truck and pipeline which will help
meet the nation’s growing need for biofuels, mandated by the Renewable
Fuels Standard. With the new terminal venture and existing
operations, KMP expects to handle in excess of 218,000 barrels per day of
ethanol in 2010. Combined with other acquisitions and projects
already completed or underway, KMP has invested approximately $500 million
in the renewable fuels handling
business.
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·
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The
Pasadena and Galena Park terminals on the Houston Ship channel brought
450,000 barrels of new tankage into service in the fourth quarter
supported by multi-year agreements with customers. This is in
addition to the 750,000 barrels that were brought online in the third
quarter at these facilities.
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Debt
and Equity Issuance
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·
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KMP
sold approximately $1.2 billion of equity in 2009 versus its full-year
budget of $1 billion. Additionally, KMP issued $2 billion
in senior notes in 2009.
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Kinder Morgan Management,
LLC
Shareholders
of Kinder Morgan Management, LLC (NYSE: KMR) will also receive a $1.05
distribution ($4.20 annualized) payable on Feb. 12, 2010, to shareholders of
record as of Jan. 29, 2010. The distribution to KMR shareholders will
be paid in the form of additional KMR
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shares. The
distribution is calculated by dividing the cash distribution to KMP unitholders
by KMR’s average closing price for the 10 trading days prior to KMR’s
ex-dividend date.
Kinder
Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline transportation
and energy storage company in North America. KMP owns an interest in
or operates approximately 28,000 miles of pipelines and
180 terminals. Its pipelines transport natural gas, gasoline,
crude oil, CO2 and other
products, and its terminals store petroleum products and chemicals and handle
bulk materials like coal and petroleum coke. KMP is also the leading
provider of CO2 for
enhanced oil recovery projects in North America. One of the largest
publicly traded pipeline limited partnerships in America, KMP has an enterprise
value of over $29 billion. The general partner of KMP is owned by
Kinder Morgan, Inc., a private company. For more information please
visit www.kindermorgan.com.
Please
join KMP at 4:30 p.m. Eastern Time on Wednesday, Jan. 20, at www.kindermorgan.com
for a LIVE webcast conference call on the company’s fourth quarter and full year
earnings.
The
non-generally accepted accounting principles, or non-GAAP, financial measures of
distributable cash flow before certain items, both in the aggregate and per
unit, and segment earnings before depreciation, depletion, amortization and
amortization of excess cost of equity investments, or DD&A, and certain
items, are presented in this news release. Our non-GAAP financial
measures should not be considered as alternatives to GAAP measures such as net
income or any other GAAP measure of liquidity or financial
performance. Distributable cash flow before certain items is a
significant metric used by us and by external users of our financial statements,
such as investors, research analysts, commercial banks and others, to compare
basic cash flows generated by us to the cash distributions we expect to pay our
unitholders on an ongoing basis. Management uses this metric to
evaluate our overall performance. It also allows management to simply
calculate the coverage ratio of estimated ongoing cash flows to expected cash
distributions. Distributable cash flow before certain items is also
an important non-GAAP financial measure for our unitholders because it serves as
an indicator of our success in providing a cash return on
investment. This financial measure indicates to investors whether or
not we typically are generating cash flow at a level that can sustain or support
an increase in the quarterly distributions we are paying pursuant to our
partnership agreement. Our partnership agreement requires us to
distribute all available cash. Distributable cash flow before certain
items and similar measures used by other publicly traded partnerships are also
quantitative measures used in the investment community because the value of a
unit of such an entity is generally determined by the unit's yield (which in
turn is based on the amount of cash distributions the entity pays to a
unitholder). The economic substance behind our use of
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distributable
cash flow before certain items is to measure and estimate the ability of our
assets to generate cash flows sufficient to make distributions to our
investors.
We
define distributable cash flow before certain items to be limited partners'
pretax income before certain items and DD&A, less cash taxes paid and
sustaining capital expenditures for KMP, plus DD&A less sustaining capital
expenditures for Rockies Express and Midcontinent Express, our equity method
investees, less equity earnings plus cash distributions received for Express and
Endeavor, two additional equity investees. Distributable cash flow
before certain items per unit is distributable cash flow before certain items
divided by average outstanding units. "Certain items" 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, goodwill impairments, allocated
compensation for which we will never be responsible, and results from assets
prior to our ownership that are required to be reflected in our results due to
accounting rules regarding entities under common control, 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 legal settlements, hurricane
impacts and casualty losses. Management uses this measure and
believes it is important to users of our financial statements because it
believes the measure more effectively reflects our business' ongoing cash
generation capacity than a similar measure with the certain items
included. For similar reasons, management uses segment earnings
before DD&A and certain items in its analysis of segment performance and
managing our business. We believe segment earnings before DD&A
and certain items is a significant performance metric because it enables us and
external users of our financial statements to better understand the ability of
our segments to generate cash on an ongoing basis. We believe it is
useful to investors because it is a measure that management believes is
important and that our chief operating decision makers use for purposes of
making decisions about allocating resources to our segments and assessing the
segments' respective performance.
We
believe the GAAP measure most directly comparable to distributable cash flow
before certain items is net income. Our calculation of distributable
cash flow before certain items, which begins with net income after subtracting
certain items that are specifically identified in the accompanying tables, is
set forth in those tables. Net income before certain items is
presented primarily because we use it in this calculation. Segment
earnings before DD&A is the GAAP measure most directly comparable to segment
earnings before DD&A and certain items. Segment earnings before
DD&A and certain items is calculated by removing the certain items
attributable to a segment, which are specifically identified in the footnotes to
the accompanying tables, from segment earnings before DD&A. In
addition, segment earnings before DD&A computed in accordance with GAAP is
included on the first page of the tables presenting our financial
results.
Our
non-GAAP measures described above should not be considered as an alternative to
GAAP net income, segment earnings before DD&A or any other GAAP
measure. Distributable cash flow before certain items and segment
earnings before DD&A and certain items are not financial measures in
accordance with GAAP and have important limitations as analytical
tools. You should not consider either of these non-GAAP measures in
isolation or as a substitute for an analysis of our results as reported under
GAAP. Because distributable cash flow before certain items excludes
some but not all items that affect net income and because distributable cash
flow measures are defined differently by different companies in our industry,
our distributable cash
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flow
before certain items may not be comparable to distributable cash flow measures
of other companies. Segment earnings before DD&A and certain
items has similar limitations. 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.
This
news release includes forward-looking statements. Although Kinder
Morgan believes that its expectations are based on reasonable assumptions, it
can give no assurance that such assumptions will
materialize. Important factors that could cause actual results to
differ materially from those in the forward-looking statements herein are
enumerated in Kinder Morgan’s Forms 10-K and 10-Q as filed with the Securities
and Exchange Commission.
#
# #
Kinder
Morgan Energy Partners, L.P. and Subsidiaries
Preliminary
Consolidated Statement of Income
(Unaudited)
(In
millions except per unit amounts)
|
Three
Months Ended
December
31,
|
Twelve
Months Ended
December
31,
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|||||||||||||||
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2009
|
2008
|
2009
|
2008
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|
Revenues
|
$ | 1,910.9 | $ | 2,291.5 | $ | 7,003.4 | $ | 11,740.3 | ||||||||
|
Costs,
expenses and other
|
||||||||||||||||
|
Operating
expenses
|
1,143.1 | 1,645.1 | 4,181.2 | 8,998.9 | ||||||||||||
|
Depreciation,
depletion and amortization
|
234.6 | 212.2 | 850.8 | 702.7 | ||||||||||||
|
General
and administrative
|
91.5 | 75.2 | 330.3 | 297.9 | ||||||||||||
|
Taxes,
other than income taxes
|
38.2 | 39.7 | 137.0 | 186.7 | ||||||||||||
|
Other
expense (income)
|
(16.7 | ) | 1.3 | (34.8 | ) | 2.6 | ||||||||||
| 1,490.7 | 1,973.5 | 5,464.5 | 10,188.8 | |||||||||||||
|
Operating
income
|
420.2 | 318.0 | 1,538.9 | 1,551.5 | ||||||||||||
|
Other
income (expense)
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||||||||||||||||
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Earnings
from equity investments
|
49.8 | 42.3 | 189.7 | 160.8 | ||||||||||||
|
Amortization
of excess cost of equity investments
|
(1.5 | ) | (1.4 | ) | (5.8 | ) | (5.7 | ) | ||||||||
|
Interest,
net
|
(112.8 | ) | (94.4 | ) | (409.0 | ) | (388.2 | ) | ||||||||
|
Other,
net
|
5.7 | (11.3 | ) | 49.5 | 19.2 | |||||||||||
|
Income
from continuing operations before income taxes
|
361.4 | 253.2 | 1,363.3 | 1,337.6 | ||||||||||||
|
Income
taxes
|
(12.9 | ) | 15.4 | (55.7 | ) | (20.4 | ) | |||||||||
|
Income
from continuing operations
|
348.5 | 268.6 | 1,307.6 | 1,317.2 | ||||||||||||
|
Income
from discontinued operations
|
- | - | - | 1.3 | ||||||||||||
|
Net
income
|
348.5 | 268.6 | 1,307.6 | 1,318.5 | ||||||||||||
|
Net
income attributable to Noncontrolling Interests
|
(4.7 | ) | (2.5 | ) | (16.6 | ) | (13.7 | ) | ||||||||
|
Net
income attributable to KMP
|
$ | 343.8 | $ | 266.1 | $ | 1,291.0 | $ | 1,304.8 | ||||||||
|
Calculation of Limited
Partners’ interest in Net Income attributable to
KMP
|
||||||||||||||||
|
Income
from continuing operations attributable to KMP
|
$ | 343.8 | $ | 266.1 | $ | 1,291.0 | $ | 1,303.5 | ||||||||
|
Less:
General Partners’ interest
|
(243.3 | ) | (216.9 | ) | (936.0 | ) | (805.8 | ) | ||||||||
|
Limited
Partners’
interest
|
100.5 | 49.2 | 355.0 | 497.7 | ||||||||||||
|
Add:
Limited Partners’ interest in discontinued operations
|
- | - | - | 1.3 | ||||||||||||
|
Limited
Partners’ interest in net income
|
$ | 100.5 | $ | 49.2 | $ | 355.0 | $ | 499.0 | ||||||||
|
Limited Partners’ net
income per unit
|
||||||||||||||||
|
Income
from continuing operations
|
$ | 0.34 | $ | 0.19 | $ | 1.26 | $ | 1.94 | ||||||||
|
Income
from discontinued operations
|
$ | - | $ | - | $ | - | $ | - | ||||||||
|
Net
income
|
$ | 0.34 | $ | 0.19 | $ | 1.26 | $ | 1.94 | ||||||||
|
Weighted
average units outstanding
|
292.0 | 262.0 | 281.5 | 257.2 | ||||||||||||
|
Declared
distribution / unit
|
$ | 1.05 | $ | 1.05 | $ | 4.20 | $ | 4.02 | ||||||||
|
Three
Months Ended
December
31,
|
Twelve
Months Ended
December
31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Segment
earnings before DD&A and amortization of excess
investments
|
||||||||||||||||
|
Products
Pipelines
|
$ | 139.2 | $ | 137.5 | $ | 607.5 | $ | 546.2 | ||||||||
|
Natural
Gas Pipelines
|
229.0 | 204.9 | 789.7 | 760.6 | ||||||||||||
|
CO2
|
219.6 | 140.2 | 782.9 | 759.9 | ||||||||||||
|
Terminals
|
166.9 | 137.5 | 599.7 | 523.8 | ||||||||||||
|
Kinder
Morgan Canada
|
40.6 | 38.0 | 154.5 | 141.2 | ||||||||||||
| $ | 795.3 | $ | 658.1 | $ | 2,934.3 | $ | 2,731.7 | |||||||||
Kinder
Morgan Energy Partners, L.P. and Subsidiaries
Preliminary
Earnings Contribution by Business Segment
(Unaudited)
(in
millions except per unit amounts)
|
Three
Months Ended
December
31,
|
Twelve
Months Ended
December
31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Segment
earnings before DD&A and amortization of excess investments
(1)
|
||||||||||||||||
|
Products
Pipelines
|
$ | 164.6 | $ | 153.2 | $ | 635.1 | $ | 571.5 | ||||||||
|
Natural
Gas Pipelines
|
226.0 | 198.8 | 787.5 | 746.8 | ||||||||||||
|
CO2
|
227.7 | 140.5 | 796.4 | 760.2 | ||||||||||||
|
Terminals
|
154.9 | 140.3 | 576.1 | 538.9 | ||||||||||||
|
Kinder
Morgan Canada
|
40.6 | 37.6 | 165.7 | 140.8 | ||||||||||||
|
Total
|
$ | 813.8 | $ | 670.4 | $ | 2,960.8 | $ | 2,758.2 | ||||||||
|
Segment
DD&A and amortization of excess investments
|
||||||||||||||||
|
Products
Pipelines
|
$ | 24.9 | $ | 23.5 | $ | 97.5 | $ | 92.7 | ||||||||
|
Natural
Gas Pipelines
|
31.1 | 17.7 | 93.8 | 68.9 | ||||||||||||
|
CO2
|
133.5 | 126.9 | 489.9 | 387.8 | ||||||||||||
|
Terminals
|
36.0 | 31.7 | 136.9 | 122.6 | ||||||||||||
|
Kinder
Morgan Canada
|
10.6 | 6.9 | 38.5 | 29.5 | ||||||||||||
|
Total
|
$ | 236.1 | $ | 206.7 | $ | 856.6 | $ | 701.5 | ||||||||
|
Segment
earnings contribution
|
||||||||||||||||
|
Products
Pipelines (1)
|
$ | 139.7 | $ | 129.7 | $ | 537.6 | $ | 478.8 | ||||||||
|
Natural
Gas Pipelines (1)
|
194.9 | 181.1 | 693.7 | 677.9 | ||||||||||||
|
CO2
(1)
|
94.2 | 13.6 | 306.5 | 372.4 | ||||||||||||
|
Terminals
(1)
|
118.9 | 108.6 | 439.2 | 416.3 | ||||||||||||
|
Kinder
Morgan Canada (1)
|
30.0 | 30.7 | 127.2 | 111.3 | ||||||||||||
|
General
and administrative (1) (2)
|
(89.0 | ) | (74.2 | ) | (332.2 | ) | (302.2 | ) | ||||||||
|
Interest,
net (1) (3)
|
(117.2 | ) | (106.1 | ) | (429.7 | ) | (402.5 | ) | ||||||||
|
Certain
items
|
||||||||||||||||
|
Interest
expense (1)
|
(0.4 | ) | 6.6 | (1.6 | ) | 5.1 | ||||||||||
|
Kinder
Morgan Canada non-cash adjustments (4)
|
- | (6.5 | ) | (11.2 | ) | (6.5 | ) | |||||||||
|
Allocated
non-cash long-term compensation
|
(1.4 | ) | (1.4 | ) | (5.7 | ) | (5.6 | ) | ||||||||
|
Acquisition
costs
|
(1.7 | ) | (1.3 | ) | (2.3 | ) | (1.3 | ) | ||||||||
|
Gain
on sale (5)
|
- | - | - | 14.3 | ||||||||||||
|
Environmental
reserves
|
(8.5 | ) | (9.2 | ) | (12.4 | ) | (9.2 | ) | ||||||||
|
Legal
reserves and settlements
|
(18.0 | ) | (1.8 | ) | (17.5 | ) | (11.3 | ) | ||||||||
|
Mark
to market of certain hedges (6)
|
(9.2 | ) | 6.5 | (19.1 | ) | 5.6 | ||||||||||
|
Hurricanes
and fires (7)
|
17.0 | (2.8 | ) | 32.0 | (18.3 | ) | ||||||||||
|
Other
(8)
|
(0.8 | ) | (4.9 | ) | 3.1 | (6.3 | ) | |||||||||
|
Sub-total
certain items
|
(23.0 | ) | (14.8 | ) | (34.7 | ) | (33.5 | ) | ||||||||
|
Net
income
|
$ | 348.5 | $ | 268.6 | $ | 1,307.6 | $ | 1,318.5 | ||||||||
|
Less: General
Partners’ interest in net income
|
(243.3 | ) | (216.9 | ) | (936.0 | ) | (805.8 | ) | ||||||||
|
Less:
Noncontrolling Interests in net income
|
(4.7 | ) | (2.5 | ) | (16.6 | ) | (13.7 | ) | ||||||||
|
Limited
Partners’ net income
|
$ | 100.5 | $ | 49.2 | $ | 355.0 | $ | 499.0 | ||||||||
|
Net
income attributable to KMP before certain items
|
$ | 366.5 | $ | 280.7 | $ | 1,325.3 | $ | 1,337.9 | ||||||||
|
Less: General
Partners’ interest in net income before certain items
|
(243.6 | ) | (217.0 | ) | (936.4 | ) | (806.1 | ) | ||||||||
|
Limited
Partners’ net income before certain items
|
122.9 | 63.7 | 388.9 | 531.8 | ||||||||||||
|
Depreciation,
depletion and amortization (9)
|
265.5 | 216.2 | 931.2 | 734.6 | ||||||||||||
|
Book
(cash) taxes - net
|
11.2 | (8.4 | ) | 41.9 | (18.8 | ) | ||||||||||
|
Express
& Endeavor contribution
|
2.4 | 0.0 | 6.2 | - | ||||||||||||
|
Sustaining
capital expenditures (10)
|
(60.2 | ) | (60.5 | ) | (172.2 | ) | (180.6 | ) | ||||||||
|
DCF
before certain items
|
$ | 341.8 | $ | 211.0 | $ | 1,196.0 | $ | 1,067.0 | ||||||||
|
Net
income / unit before certain items
|
$ | 0.42 | $ | 0.24 | $ | 1.38 | $ | 2.07 | ||||||||
|
DCF
/ unit before certain items
|
$ | 1.17 | $ | 0.81 | $ | 4.25 | $ | 4.15 | ||||||||
|
Weighted
average units outstanding
|
292.0 | 262.0 | 281.5 | 257.2 | ||||||||||||
____________
Notes
($ million)
|
(1)
|
Excludes
certain items:
|
|
2008
4th quarter - Products Pipelines $(15.7), Natural Gas Pipelines $6.1,
CO2
$(0.3), Terminals $(2.8), Kinder Morgan Canada
$(6.5),
|
|
general
and administrative expense $(2.2), interest expense
$6.6
|
|
|
2008
year to date - Products Pipelines $(25.3), Natural Gas Pipelines $13.8,
CO2
$(0.3), Terminals $(15.1), Kinder Morgan Canada $(6.5), general and
administrative expense $(5.0), interest expense $4.9
|
|
|
2009
4th quarter - Products Pipelines $(25.4), Natural Gas Pipelines $3.0,
CO2
$(8.1), Terminals $12.0, general and administrative expense $(4.1),
interest expense $(0.4)
|
|
|
2009
year to date - Products Pipelines $(27.6), Natural Gas Pipelines $2.2,
CO2
$(13.5), Terminals $23.6, KMC $(11.2), general and administrative expense
$(6.6), interest expense $(1.6)
|
|
|
(2)
|
General
and administrative expense includes income tax that is not allocable to
the segments - 2008 - $(1.2) and $(9.3) for the 4th quarter and full year
2008, respectively
|
|
2009
- $(1.6) and $(8.5) for the 4th quarter and year to date,
respectively
|
|
|
(3)
|
Interest
expense on this page excludes interest income that is allocable to the
segments of $5.1 and $9.4 for the 4th quarter and year to date,
respectively for 2008, and $4.8 and $22.3 for the 4th quarter and year to
date, respectively, for 2009
|
|
(4)
|
Primarily
non-cash regulatory accounting adjustments - 2008 - $(6.5) for the 4th
quarter and year to date; 2009 - $(11.2) for year to
date
|
|
(5)
|
2008
- Gain on sale of North & Thunder Creek Systems
|
|
(6)
|
CO2
hedge ineffectiveness and Upstream mark-to-market. Actual gain or loss
will continue to be taken into account in earnings before DD&A at time
of physical transaction
|
|
(7)
|
Property
damage/write-offs and insurance reimbursements for losses experienced in
hurricanes and fires
|
|
(8)
|
2008
- FX loss on Cochin note payable, product loss reserve, asset retirement /
write-off
|
|
2009
- FX gain on Cochin note payable, TransMountain Land Transfer Tax, and
Terminals overhead credit on certain items capex
|
|
|
(9)
|
Includes
Kinder Morgan Energy Partners (KMP) share of Rockies Express (REX) and
Midcontinent Express (MEP) DD&A - 2008 - $9.5 and $33.1 for the 4th
quarter and year to date, respectively; 2009 - $29.4 and $74.6 for the 4th
quarter and year to date, respectively
|
|
(10)
|
Includes
KMP share of REX and MEP sustaining capital
expenditures
|
Volume
Highlights
(historical
pro forma for acquired assets)
|
December
31,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$ | 147 | $ | 63 | ||||
|
Other
current assets
|
1,098 | 1,182 | ||||||
|
Property,
Plant and Equipment, net
|
14,153 | 13,241 | ||||||
|
Investments
|
2,845 | 954 | ||||||
|
Deferred
charges and other assets
|
2,074 | 2,446 | ||||||
|
TOTAL
ASSETS
|
$ | 20,317 | $ | 17,886 | ||||
|
LIABILITIES
AND PARTNERS’ CAPITAL
|
||||||||
|
Liabilities
|
||||||||
|
Notes
payable and current maturities of long-term debt
|
$ | 595 | $ | 289 | ||||
|
Other
current liabilities
|
1,428 | 1,493 | ||||||
|
Long-term
debt
|
9,998 | 8,275 | ||||||
|
Value
of interest rate swaps
|
389 | 951 | ||||||
|
Other
|
1,159 | 762 | ||||||
|
Total
liabilities
|
13,569 | 11,770 | ||||||
|
Partners’
capital
|
||||||||
|
Accumulated
other comprehensive loss
|
(395 | ) | (288 | ) | ||||
|
Other
partners’ capital
|
7,063 | 6,333 | ||||||
|
Total
KMP partners’ capital
|
6,668 | 6,045 | ||||||
|
Noncontrolling
interests
|
80 | 71 | ||||||
|
Total
partners’ capital
|
6,748 | 6,116 | ||||||
|
TOTAL
LIABILITIES AND PARTNERS’ CAPITAL
|
$ | 20,317 | $ | 17,886 | ||||
|
Total
Debt, net of cash and cash equivalents, and excluding the value
of interest rate swaps
|
$ | 10,446 | $ | 8,501 | ||||
|
Segment
Earnings Before DD&A and certain items
|
$ | 3,035 | $ | 2,791 | ||||
|
G&A
|
(332 | ) | (302 | ) | ||||
|
Income
Taxes
|
44 | 33 | ||||||
|
EBITDA
(1)
|
$ | 2,747 | $ | 2,522 | ||||
|
Debt
to EBITDA
|
3.8 | 3.4 | ||||||
____________
|
(1)
|
Products
gasoline volumes include ethanol
|
|
(2)
|
Includes
Pacific, Calnev, Plantation, Central Florida, Cochin and
Cypress
|
|
(3)
|
Includes
Pipelines volumes also included in gasoline volumes
above
|
|
(4)
|
Includes
KMIGT, Texas Intrastates, KMNTP, Monterrey, Trailblazer, TransColorado,
REX, MEP, and KMLA Pipeline volumes
|
|
(5)
|
Includes
Cortez, Central Basin, CRC, CLPL and PCPL pipeline
volumes
|
|
(6)
|
Represents
100% production from the field
|
|
(7)
|
Represents
KMPs net share of the production from the field
|
|
(8)
|
Net
to KMP
|
|
(9)
|
Includes
all KMP crude oil properties
|
|
(10)
|
Hedge
gains/losses for Oil and NGLs are included with Crude
Oil
|
Kinder
Morgan Energy Partners, L.P. and Subsidiaries
Preliminary
Abbreviated Consolidated Balance Sheet
(Unaudited)
(in
millions)
|
December 31,
|
December 31,
|
|||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$ | 147 | $ | 63 | ||||
|
Other
current assets
|
1,098 | 1,182 | ||||||
|
Property,
Plant and Equipment, net
|
14,153 | 13,241 | ||||||
|
Investments
|
2,845 | 954 | ||||||
|
Deferred
charges and other assets
|
2,074 | 2,446 | ||||||
|
TOTAL
ASSETS
|
$ | 20,317 | $ | 17,886 | ||||
|
LIABILITIES
AND PARTNERS’ CAPITAL
|
||||||||
|
Liabilities
|
||||||||
|
Notes
payable and current maturities of long-term debt
|
$ | 595 | $ | 289 | ||||
|
Other
current liabilities
|
1,428 | 1,493 | ||||||
|
Long-term
debt
|
9,998 | 8,275 | ||||||
|
Value
of interest rate swaps
|
389 | 951 | ||||||
|
Other
|
1,159 | 762 | ||||||
|
Total
liabilities
|
13,569 | 11,770 | ||||||
|
Partners’
capital
|
||||||||
|
Accumulated
other comprehensive loss
|
(395 | ) | (288 | ) | ||||
|
Other
partners’ capital
|
7,063 | 6,333 | ||||||
|
Total
KMP partners’ capital
|
6,668 | 6,045 | ||||||
|
Noncontrolling
interests
|
80 | 71 | ||||||
|
Total
partners’ capital
|
6,748 | 6,116 | ||||||
|
TOTAL
LIABILITIES AND PARTNERS’ CAPITAL
|
$ | 20,317 | $ | 17,886 | ||||
|
Total
Debt, net of cash and cash equivalents, and excluding the value
of interest rate swaps
|
$ | 10,446 | $ | 8,501 | ||||
|
Segment
Earnings Before DD&A and certain items
|
$ | 3,035 | $ | 2,791 | ||||
|
G&A
|
(332 | ) | (302 | ) | ||||
|
Income
Taxes
|
44 | 33 | ||||||
|
EBITDA
(1)
|
$ | 2,747 | $ | 2,522 | ||||
|
Debt
to EBITDA
|
3.8 | 3.4 | ||||||
(1)
EBITDA includes addback of KMP’s share of REX and MEP
DD&A