(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Item 2.02. | Results of Operations and Financial Condition |
Item 7.01 | Regulation FD Disclosure. |
Item 9.01. | Financial Statements and Exhibits |
(d) | Exhibits The exhibits set forth below are being furnished pursuant to Item 2.02 and Item 7.01. |
Exhibit Number | Description |
99.1 | |
99.2 | |
104 | Cover Page Interactive Data File pursuant to Rule 406 of Regulation S-T formatted in iXBRL (Inline Extensible Business Reporting Language). |
Kinder Morgan, Inc. | ||||
Registrant |
Dated: April 22, 2020 | By: | /s/ David P. Michels | ||||
David P. Michels Vice President and Chief Financial Officer |
Exhibit 99.1 |
• | On January 9, 2020, KMI announced the sale of all of the approximately 25 million shares of Pembina stock it received in connection with Pembina’s acquisition of KML. KMI used the approximately $764 million in after-tax proceeds from the sale to repay maturing debt. |
• | In February 2020, TGP issued $1 billion in senior notes due in March 2030. The proceeds were used to repay $550 million in intercompany notes due to KMI and for general corporate purposes. |
• | During March 2020, KMI repurchased approximately 3.6 million common shares for approximately $50 million at an average price of $13.94 per share. |
• | Due to the public health impact of COVID-19 and out of concern for the health and well-being of KMI’s stockholders and employees, the Board has authorized KMI to change the format of its annual meeting of stockholders, to be held on Wednesday, May 13, 2020 to a virtual meeting format. In the coming days, KMI will issue a press release to provide stockholders with instructions for accessing the meeting. |
• | Construction activities on the Permian Highway Pipeline (PHP) are now fully underway, and are nearly complete on the portion of the project in the Waha area in Texas. The approximately $2 billion project is designed to transport up to 2.1 Bcf/d of natural gas through approximately 430 miles of 42-inch pipeline from the Waha area to U.S. Gulf Coast and Mexico markets. PHP is expected to be in service early in 2021. The total 2.1 Bcf/d of capacity is fully subscribed under long-term, binding agreements. Kinder Morgan Texas Pipeline (KMTP), EagleClaw Midstream and Altus Midstream each hold an ownership interest of approximately 26.7 percent, and an affiliate of an anchor shipper has a 20 percent interest. KMTP is building and will operate the pipeline. |
• | Elba Liquefaction Company (ELC) is continuing the commissioning and startup of the ten liquefaction units that comprise its portion of the Elba Liquefaction project. The fifth unit was placed in service in March, and the sixth on April 20. The remaining four units are expected to be placed in service during the spring and summer of 2020. The facility will have a total liquefaction capacity of approximately 2.5 million tonnes per year of LNG, equivalent to approximately 350 million cubic feet per day (MMcf/d) of natural gas. The nearly $2 billion project is supported by long term contracts with Shell. ELC, a KMI joint venture with EIG Global Energy Partners as a 49 percent partner, owns the liquefaction units and other ancillary equipment. Other facilities associated with the project are 100 percent owned by KMI. |
• | The Dayton Loop Project was placed in service in February 2020, and is providing incremental takeaway capacity from the East Texas and Goodrich areas to the Houston Ship Channel, Texas City and Katy market areas. Construction activities continue on other projects across KMI’s Texas intrastate system, and the company is investing approximately $260 million in a collection of projects designed to increase capacity by approximately 1.4 Bcf/d and improve connectivity across its Texas intrastate system. The additional projects are designed to support the distribution of significant incremental volumes as GCX, PHP and other new Permian Basin takeaway projects deliver into the U.S. Gulf Coast and Mexico markets. |
• | The approximately $56 million Sierrita Gas Pipeline Expansion Project (KMI share: approximately $20 million) was placed in service on April 12, 2020. This project will increase the pipeline’s capacity by approximately 323,000 Dth/d to 524,000 Dth/d, and consists of a new 15,900 horsepower compressor station in Pima County, Arizona. KMI is a 35 percent owner and the operator of Sierrita Gas Pipeline. |
• | On February 21, 2020, FERC issued a 7c certificate to Natural Gas Pipeline Company of America (NGPL) for its Gulf Coast Southbound project. On March 31, 2020, the FERC approved NGPL’s request to proceed with construction. The approximately $230 million project (KMI’s share: $115 million) will increase southbound capacity on NGPL’s Gulf Coast System by approximately 300,000 Dth/d to serve Corpus Christi Liquefaction, LLC. The project is supported by a long-term take-or-pay contract and is expected to be placed into service in the first half of 2021. |
• | The Roanoke Expansion Project was placed in service on April 1, 2020. The full project (KMI’s share: approximately $25 million) adds approximately 21,000 bpd of incremental refined petroleum products capacity on the Plantation Pipe Line system from the Baton Rouge, Louisiana and Collins, Mississippi origin points to the Roanoke, Virginia area. The project consisted primarily of additional pump capacity and operational storage. |
• | Construction activities continue on a series of projects at Kinder Morgan’s Pasadena Terminal and Jefferson Street Truck Rack, located on the Houston Ship Channel. These approximately $127 million projects include increasing flow rates on inbound pipeline connections and outbound dock lines, tank modifications that will add butane blending and vapor combustion capabilities to 10 storage tanks, expansion of the current methyl tert-butyl ether storage and blending platform, and a new dedicated natural gasoline (C5) inbound connection, which was recently placed in service. The improvements are supported by a long-term agreement with a major refiner and are expected to be completed by the end of the second quarter of 2020. |
• | Construction activities continue for the butane-on-demand blending system for 25 tanks at KMI’s Galena Park Terminal. The approximately $45 million project will include construction of a 30,000-barrel butane sphere and a new inbound C4 pipeline connection, as well as tank and piping modifications to extend butane blending capabilities to 25 tanks, two ship docks, and six cross-channel pipelines. The project is supported by a long-term agreement with an investment grade midstream company and is expected to be completed in the first quarter of 2021. |
• | Construction continues on an expansion of Kinder Morgan’s market-leading Argo ethanol hub. The project, which spans both the Argo and Chicago Liquids facilities, includes 105,000 barrels of additional ethanol storage capacity and enhancements to the system’s rail loading, rail unloading and barge loading capabilities. The approximately $19 million project will improve the system’s inbound and outbound modal balances, adding greater product-clearing efficiencies to this industry-critical pricing and liquidity hub. The project is expected to be completed in the third quarter of 2020. |
• | Construction activities have begun on a facility upgrade at the Battleground Oil Specialty Terminal Company LLC (BOSTCO), a leading fuel oil storage terminal on the Houston Ship Channel. The upgrade will add piping to allow for segregation of high sulfur and low sulfur fuel oils. Detailed engineering and design work is underway on the approximately $22 million project, which is expected to be placed in-service in the fourth quarter of 2020. KMI owns a 55 percent interest in and is the operator of BOSTCO. |
• | The CO2 segment remains focused on capital discipline. The segment has prioritized and reviewed its 2020 projects, taking into account current pricing, and has eliminated projects that do not generate attractive returns. |
CONTACTS | ||
Dave Conover | Investor Relations | |
Media Relations | (800) 348-7320 | |
(713) 420-6397 | km_ir@kindermorgan.com | |
Newsroom@kindermorgan.com | www.kindermorgan.com |
Table 1 Kinder Morgan, Inc. and Subsidiaries Preliminary Consolidated Statements of (Loss) Income (Unaudited, in millions except per share amounts) | ||||||||||
Three Months Ended March 31, | % change | |||||||||
2020 | 2019 | |||||||||
Revenues | $ | 3,106 | $ | 3,429 | ||||||
Operating costs, expenses and other | ||||||||||
Costs of sales | 663 | 948 | ||||||||
Operations and maintenance | 620 | 598 | ||||||||
Depreciation, depletion and amortization | 565 | 593 | ||||||||
General and administrative | 153 | 154 | ||||||||
Taxes, other than income taxes | 92 | 118 | ||||||||
Loss on impairments and divestitures, net | 971 | — | ||||||||
Other income, net | (1 | ) | — | |||||||
Total operating costs, expenses and other | 3,063 | 2,411 | ||||||||
Operating income | 43 | 1,018 | ||||||||
Other income (expense) | ||||||||||
Earnings from equity investments | 192 | 192 | ||||||||
Amortization of excess cost of equity investments | (32 | ) | (21 | ) | ||||||
Interest, net | (436 | ) | (460 | ) | ||||||
Other, net | 2 | 10 | ||||||||
(Loss) income before income taxes | (231 | ) | 739 | |||||||
Income tax expense | (60 | ) | (172 | ) | ||||||
Net (loss) income | (291 | ) | 567 | |||||||
Net income attributable to NCI | (15 | ) | (11 | ) | ||||||
Net (loss) income attributable to Kinder Morgan, Inc. | $ | (306 | ) | $ | 556 | |||||
Class P Shares | ||||||||||
Basic and diluted (loss) earnings per common share | $ | (0.14 | ) | $ | 0.24 | (158 | )% | |||
Basic and diluted weighted average common shares outstanding | 2,264 | 2,262 | — | % | ||||||
Declared dividends per common share | $ | 0.2625 | $ | 0.25 | 5 | % | ||||
Adjusted Earnings (1) | $ | 541 | $ | 571 | (5 | )% | ||||
Adjusted Earnings per common share (1) | $ | 0.24 | $ | 0.25 | (4 | )% |
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 and DCF Reconciliation (Unaudited, in millions) | ||||||||||
Three Months Ended March 31, | % change | |||||||||
2020 | 2019 | |||||||||
Net (loss) income attributable to Kinder Morgan, Inc. (GAAP) | $ | (306 | ) | $ | 556 | |||||
Total Certain Items | 847 | 15 | ||||||||
Adjusted Earnings (1) | 541 | 571 | (5 | )% | ||||||
DD&A and amortization of excess cost of equity investments for DCF (2) | 691 | 708 | ||||||||
Income tax expense for DCF (1)(2) | 181 | 195 | ||||||||
Cash taxes (3) | (3 | ) | (13 | ) | ||||||
Sustaining capital expenditures (3) | (141 | ) | (115 | ) | ||||||
Other items (4) | (8 | ) | 25 | |||||||
DCF | $ | 1,261 | $ | 1,371 | (8 | )% |
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 March 31, | % change | |||||||||
2020 | 2019 | |||||||||
Natural Gas Pipelines | $ | 1,179 | $ | 1,201 | (2 | )% | ||||
Products Pipelines | 273 | 293 | (7 | )% | ||||||
Terminals | 257 | 299 | (14 | )% | ||||||
CO2 | 175 | 189 | (7 | )% | ||||||
Adjusted Segment EBDA (1) | 1,884 | 1,982 | (5 | )% | ||||||
General and administrative and corporate charges (1) | (140 | ) | (158 | ) | ||||||
KMI's share of JV DD&A and income tax expense (1)(5) | 119 | 126 | ||||||||
Net income Attributable to NCI (net of KML NCI and Certain Items) (1) | (15 | ) | (3 | ) | ||||||
Adjusted EBITDA | 1,848 | 1,947 | (5 | )% | ||||||
Interest, net (1) | (435 | ) | (458 | ) | ||||||
Cash taxes (3) | (3 | ) | (13 | ) | ||||||
Sustaining capital expenditures (3) | (141 | ) | (115 | ) | ||||||
KML NCI DCF adjustments (6) | — | (15 | ) | |||||||
Other items (4) | (8 | ) | 25 | |||||||
DCF | $ | 1,261 | $ | 1,371 | (8 | )% | ||||
Weighted average common shares outstanding for dividends (7) | 2,277 | 2,275 | ||||||||
DCF per common share | $ | 0.55 | $ | 0.60 | ||||||
Declared dividends per common share | $ | 0.2625 | $ | 0.25 |
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 amount represents 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 March 31, | % change | |||||||||
2020 | 2019 | |||||||||
Net (loss) income (GAAP) | $ | (291 | ) | $ | 567 | (151 | )% | |||
Certain Items: | ||||||||||
Fair value amortization | (8 | ) | (8 | ) | ||||||
Legal, environmental and taxes other than income tax reserves | (8 | ) | 17 | |||||||
Change in fair value of derivative contracts (1) | (36 | ) | 10 | |||||||
Loss on impairments and divestitures, net (2) | 371 | 2 | ||||||||
Loss on impairment of goodwill (3) | 600 | — | ||||||||
Income tax Certain Items | (96 | ) | 2 | |||||||
Other | 24 | (8 | ) | |||||||
Total Certain Items | 847 | 15 | ||||||||
DD&A and amortization of excess cost of equity investments | 597 | 614 | ||||||||
Income tax expense (4) | 156 | 170 | ||||||||
KMI's share of JV DD&A and income tax expense (4)(5) | 119 | 126 | ||||||||
Interest, net (4) | 435 | 458 | ||||||||
Net income attributable to NCI (net of KML NCI (4)) | (15 | ) | (3 | ) | ||||||
Adjusted EBITDA | $ | 1,848 | $ | 1,947 | (5 | )% |
Notes | |||||||
(1) | Gains or losses are reflected in our DCF when realized. | ||||||
(2) | 2020 amount primarily 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 is reported within “Loss on impairments and divestitures, net” on the accompanying Preliminary Consolidated Statement of Income. (See Table 1.) | ||||||
(3) | 2020 amount represents an 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 March 31, | |||||||
2020 | 2019 | ||||||
Natural Gas Pipelines | |||||||
Transport volumes (BBtu/d) | 39,095 | 36,044 | |||||
Sales volumes (BBtu/d) | 2,495 | 2,332 | |||||
Gas gathering volumes (BBtu/d) | 3,361 | 3,301 | |||||
NGLs (MBbl/d) (1) | 30 | 32 | |||||
Products Pipelines (MBbl/d) | |||||||
Gasoline (2) | 961 | 980 | |||||
Diesel fuel | 358 | 337 | |||||
Jet fuel | 293 | 294 | |||||
Total refined product volumes | 1,612 | 1,611 | |||||
Crude and condensate | 702 | 643 | |||||
Total delivery volumes (MBbl/d) | 2,314 | 2,254 | |||||
Terminals (1) | |||||||
Liquids leasable capacity (MMBbl) | 79.5 | 79.3 | |||||
Liquids utilization % | 93.7 | % | 94.0 | % | |||
Bulk transload tonnage (MMtons) | 13.0 | 13.6 | |||||
CO2 | |||||||
SACROC oil production | 23.19 | 24.43 | |||||
Yates oil production | 7.04 | 7.25 | |||||
Katz and Goldsmith oil production | 3.36 | 4.11 | |||||
Tall Cotton oil production | 2.41 | 2.61 | |||||
Total oil production - net (MBbl/d) (4) | 36.00 | 38.40 | |||||
NGL sales volumes - net (MBbl/d) (4) | 9.84 | 10.10 | |||||
CO2 production - net (Bcf/d) | 0.55 | 0.63 | |||||
Realized weighted average oil price per Bbl | $ | 54.61 | $ | 48.67 | |||
Realized weighted average NGL price per Bbl | $ | 19.74 | $ | 25.98 |
CO2 Segment Hedges | Remaining 2020 | 2021 | 2022 | 2023 | |||||||||||
Crude Oil (3) | |||||||||||||||
Price ($/barrel) | $ | 55.60 | $ | 54.15 | $ | 54.60 | $ | 52.81 | |||||||
Volume (barrels per day) | 31,070 | 16,600 | 7,700 | 4,000 | |||||||||||
NGLs | |||||||||||||||
Price ($/barrel) | $ | 28.66 | $ | 23.88 | |||||||||||
Volume (barrels per day) | 5,353 | 247 | |||||||||||||
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) | |||||||
March 31, | December 31, | ||||||
2020 | 2019 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 360 | $ | 185 | |||
Other current assets | 2,736 | 3,053 | |||||
Property, plant and equipment, net | 36,041 | 36,419 | |||||
Investments | 7,886 | 7,759 | |||||
Goodwill | 20,851 | 21,451 | |||||
Deferred charges and other assets | 5,656 | 5,290 | |||||
Total assets | $ | 73,530 | $ | 74,157 | |||
Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity | |||||||
Short-term debt | $ | 3,540 | $ | 2,377 | |||
Preferred interest in general partner of KMP | — | 100 | |||||
Other current liabilities | 2,068 | 2,623 | |||||
Long-term debt | 29,955 | 30,883 | |||||
Debt fair value adjustments | 1,450 | 1,032 | |||||
Other | 2,260 | 2,253 | |||||
Total liabilities | 39,273 | 39,268 | |||||
Redeemable Noncontrolling Interest | 793 | 803 | |||||
Other shareholders' equity | 33,168 | 34,075 | |||||
Accumulated other comprehensive loss | (62 | ) | (333 | ) | |||
KMI equity | 33,106 | 33,742 | |||||
Noncontrolling interests | 358 | 344 | |||||
Total shareholders' equity | 33,464 | 34,086 | |||||
Total liabilities, redeemable noncontrolling interest and shareholders' equity | $ | 73,530 | $ | 74,157 | |||
Net Debt (1) | $ | 32,562 | $ | 33,031 | |||
Adjusted EBITDA Twelve Months Ended | |||||||
March 31, | December 31, | ||||||
Reconciliation of Net Income to Adjusted EBITDA | 2020 | 2019 | |||||
Net income (GAAP) | $ | 1,381 | $ | 2,239 | |||
Total Certain Items | 803 | (29 | ) | ||||
Net income attributable to NCI (net of KML NCI) (2) | (29 | ) | (16 | ) | |||
DD&A and amortization of excess cost of equity investments | 2,477 | 2,494 | |||||
Income tax expense (3) | 613 | 627 | |||||
KMI's share of JV DD&A and income tax expense (3) | 481 | 487 | |||||
Interest, net (3) | 1,793 | 1,816 | |||||
Adjusted EBITDA | $ | 7,519 | $ | 7,618 | |||
Net Debt to Adjusted EBITDA | 4.3 | 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 $21 million and $44 million as of March 31, 2020 and December 31, 2019, respectively, as we have entered into swaps to convert that debt to U.S.$. 2020 cash component of net debt was increased by $552 million for restricted cash that was in "Other current assets" as this cash was held in escrow at the time and used on April 1, 2020 for the redemption of $535 million of senior notes plus associated accrued interest. |
(2) | 2020 and 2019 amounts are net of KML NCI of $24 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 March 31, | |||||||
2020 | 2019 | ||||||
Segment EBDA | |||||||
Natural Gas Pipelines (GAAP) | $ | 1,196 | $ | 1,203 | |||
Certain Items | (17 | ) | (2 | ) | |||
Natural Gas Pipelines Adjusted Segment EBDA | 1,179 | 1,201 | |||||
Products Pipelines (GAAP) | 269 | 276 | |||||
Certain Items | 4 | 17 | |||||
Products Pipelines Adjusted Segment EBDA | 273 | 293 | |||||
Terminals (GAAP) | 257 | 299 | |||||
Certain Items | — | — | |||||
Terminals Adjusted Segment EBDA | 257 | 299 | |||||
CO2 (GAAP) | (755 | ) | 198 | ||||
Certain Items | 930 | (9 | ) | ||||
CO2 Adjusted Segment EBDA | 175 | 189 | |||||
Kinder Morgan Canada (GAAP) | — | (2 | ) | ||||
Certain Items | — | 2 | |||||
Kinder Morgan Canada Adjusted Segment EBDA | — | — | |||||
Total Segment EBDA (GAAP) | 967 | 1,974 | |||||
Total Segment EBDA Certain Items | 917 | 8 | |||||
Total Adjusted Segment EBDA | $ | 1,884 | $ | 1,982 | |||
Depreciation, depletion and amortization (GAAP) | $ | (565 | ) | $ | (593 | ) | |
Amortization of excess cost of equity investments (GAAP) | (32 | ) | (21 | ) | |||
DD&A and amortization of excess cost of equity investments | (597 | ) | (614 | ) | |||
KMI's share of JV DD&A | (94 | ) | (99 | ) | |||
DD&A attributable to KML NCI | — | 5 | |||||
DD&A and amortization of excess cost of equity investments for DCF | $ | (691 | ) | $ | (708 | ) | |
General and administrative (GAAP) | $ | (153 | ) | $ | (154 | ) | |
Corporate charges | (12 | ) | (7 | ) | |||
Certain Items | 25 | 3 | |||||
General and administrative and corporate charges (1) | $ | (140 | ) | $ | (158 | ) | |
Interest, net (GAAP) | $ | (436 | ) | $ | (460 | ) | |
Certain Items | 1 | 2 | |||||
Interest, net (1) | $ | (435 | ) | $ | (458 | ) | |
Income tax expense (GAAP) | $ | (60 | ) | $ | (172 | ) | |
Certain Items | (96 | ) | 2 | ||||
Income tax expense (1) | (156 | ) | (170 | ) | |||
KMI's share of taxable JV income tax expense (1) | (25 | ) | (27 | ) | |||
Income tax expense attributable to KML NCI (1) | — | 2 | |||||
Income tax expense for DCF (1) | $ | (181 | ) | $ | (195 | ) | |
Net income attributable to KML NCI | $ | — | $ | (8 | ) | ||
KML NCI associated with Certain Items | — | — | |||||
KML NCI (1) | — | (8 | ) | ||||
DD&A attributable to KML NCI | — | (5 | ) | ||||
Income tax expense attributable to KML NCI (1) | — | (2 | ) | ||||
KML NCI DCF adjustments (1) | $ | — | $ | (15 | ) | ||
Table 7 (continued) Kinder Morgan, Inc. and Subsidiaries Preliminary Supplemental Information (Unaudited, in millions) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net income attributable to NCI (GAAP) | $ | (15 | ) | $ | (11 | ) | |
Less: KML NCI (1) | — | (8 | ) | ||||
Net income attributable to NCI (net of KML NCI (1)) | (15 | ) | (3 | ) | |||
NCI associated with Certain Items | — | — | |||||
Net income attributable to NCI (net of KML NCI and Certain Items) | $ | (15 | ) | $ | (3 | ) | |
Additional JV information | |||||||
KMI's share of JV DD&A | $ | (94 | ) | $ | (99 | ) | |
KMI's share of JV income tax expense (1) | (25 | ) | (27 | ) | |||
KMI's share of JV DD&A and income tax expense (1) | $ | (119 | ) | $ | (126 | ) | |
KMI's share of taxable JV cash taxes | $ | (4 | ) | $ | — | ||
KMI's share of JV sustaining capital expenditures | $ | (26 | ) | $ | (19 | ) | |
CO2 Segment EBDA (GAAP) to CO2 Segment Free Cash Flow Reconciliation | |||||||
CO2 Segment EBDA (GAAP) | $ | (755 | ) | $ | 198 | ||
Certain Items: | |||||||
Change in fair value of derivative contracts | (20 | ) | (9 | ) | |||
Loss on impairments | 950 | — | |||||
CO2 Segment Certain Items | 930 | (9 | ) | ||||
Capital expenditures | (70 | ) | (85 | ) | |||
CO2 Segment Free Cash Flow (1)(2) | $ | 105 | $ | 104 |
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 April 20, 2020 (Unaudited) | ||||||||||||||||
Remaining 9 Months Commodity Volumes and Price Assumptions | Sensitivity Range | Potential Impact to 2020 Adjusted EBITDA (in millions, by segment) | ||||||||||||||
Natural Gas Pipelines | Products Pipelines | Terminals | CO2 | Total | ||||||||||||
Natural Gas Gathering and Processing Volumes | ||||||||||||||||
3,325 Bbtu/d | +/- 5% | $ | 23 | $ | 23 | |||||||||||
Refined Products Volumes (gasoline, diesel and jet fuel) | ||||||||||||||||
1,452 MBbl/d for Products Pipelines (the following apply to both the Products Pipelines and Terminals segments) (1) | +/- 5% | $ | 26 | $ | 12 | $ | 38 | |||||||||
Qtr 2: 40% - 45% reduction from budgeted quarter amount | ||||||||||||||||
Qtr 3: 10% - 12% reduction from budgeted quarter amount | ||||||||||||||||
Qtr 4: 5% - 6% reduction from budgeted quarter amount | ||||||||||||||||
Crude Oil & Condensate Pipeline Volumes | ||||||||||||||||
587 MBbl/d | +/- 5% | $ | 11 | $ | 11 | |||||||||||
Crude Oil Production Volumes | ||||||||||||||||
46 MBbl/d, gross (33 MBbl/d, net) | +/- 5% | $ | 12 | $ | 12 | |||||||||||
Crude Oil Price | ||||||||||||||||
$30/bbl | +/- $1/bbl WTI | $ | 0.2 | $ | 0.9 | $ | 0.5 | $ | 1.6 | |||||||
NGL to Crude Oil Price Ratio | ||||||||||||||||
Natural Gas Pipelines 49% and CO2 25% | +/- 1% | $ | 0.1 | $ | 0.4 | $ | 0.5 | |||||||||
Potential Impact to 2020 DCF (in millions) | ||||||||||||||||
3-Month LIBOR Interest Rate (2) | Total | |||||||||||||||
0.64% | +/- 10-bp | $ | 2.4 | |||||||||||||
Purpose of Outlook Assumptions and Sensitivity: | ||||||||||||||||
The above table provides key assumptions used in our 2020 forecast for the remaining 9 months of 2020 to incorporate the estimated impact of COVID-19 and oil price decline. 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 for Terminals includes sensitivity to changes in petroleum coke volume. |
(2) | As of March 31, 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 March 31, 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. |
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