Reportable Segments

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

We operate in five reportable business segments. These segments and their principal sources of revenues are as follows:

▪ Natural Gas Pipelines—the sale, transport, processing, treating, fractionation, storage and gathering of natural gas and NGL;

▪ CO₂—the production, sale and transportation of crude oil from fields in the Permian Basin of West Texas and the production, transportation and marketing of CO₂ used as a flooding medium for recovering crude oil from mature oil fields;

▪ Products Pipelines—the transportation and terminaling of refined petroleum products (including gasoline, diesel fuel and jet fuel), NGL, crude oil and condensate, and bio-fuels;

▪ Terminals—the transportation, transloading and storing of refined petroleum products, crude oil, condensate, and bulk products, including coal, petroleum coke, cement, alumina, salt and other bulk chemicals; and

▪ Kinder Morgan Canada—the transportation of crude oil and refined products from Alberta, Canada to marketing terminals and refineries in British Columbia and the state of Washington. As further described in Note 2, Kinder Morgan Canada divested its interest in the Express pipeline system effective March 14, 2013.

We evaluate performance principally based on each segment’s EBDA (including amortization of excess cost of equity investments), which excludes general and administrative expenses, third party debt costs and interest expense, unallocable interest income, and unallocable income tax expense. Our reportable segments are strategic business units that offer different products and services, and they are structured based on how our chief operating decision makers organize their operations for optimal performance and resource allocation. Each segment is managed separately because each segment involves different products and marketing strategies. Financial information by segment follows (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenues
Natural Gas Pipelines
Revenues from external customers	$	2,111		$	1,696		$	4,286		$	3,065
Intersegment revenues	1			—			2			—
CO2	454			460			937			889
Products Pipelines	524			443			1,058			897
Terminals
Revenues from external customers	420			343			$	811		$	680
Intersegment revenues	1			1			1			1
Kinder Morgan Canada	68			75			137			147
Total segment revenues	3,579			3,018			7,232			5,679
Less: Total intersegment revenues	(2		)	(1		)	(3		)	(1		)
Total consolidated revenues	$	3,577		$	3,017		$	7,229		$	5,678

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Segment EBDA(a)
Natural Gas Pipelines(b)	$	639		$	1,123		$	1,358		$	1,680
CO2	332			358			695			700
Products Pipelines(c)	203			12			411			197
Terminals	233			207			447			393
Kinder Morgan Canada(d)	40			50			88			243
Segment EBDA	1,447			1,750			2,999			3,213
Total segment DD&A expense	(406		)	(357		)	(807		)	(685		)
Total segment amortization of excess cost of investments	(5		)	(2		)	(8		)	(4		)
General and administrative expense	(132		)	(163		)	(285		)	(297		)
Interest expense, net of unallocable interest income	(231		)	(215		)	(470		)	(417		)
Unallocable income tax expense	(4		)	(3		)	(6		)	(6		)
Loss from discontinued operations	—			—			—			(2		)
Total consolidated net income	$	669		$	1,010		$	1,423		$	1,802

	June 30, 2014		December 31, 2013
Assets
Natural Gas Pipelines	$	25,704	$	25,721
CO2	3,039		2,954
Products Pipelines	5,782		5,488
Terminals	7,592		6,124
Kinder Morgan Canada	1,690		1,678
Total segment assets	43,807		41,965
Corporate assets(e)	744		799
Total consolidated assets	$	44,551	$	42,764

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(a) Includes revenues, earnings from equity investments, allocable interest income, and other, net, less operating expenses, allocable income taxes, and other income, net. Operating expenses include natural gas purchases and other costs of sales, operations and maintenance expenses, and taxes, other than income taxes.

(b) Three and six month 2013 amounts include a $558 million non-cash gain from the remeasurement of our previously held equity interest in Eagle Ford Gathering to fair value (discussed further in Note 2 “Acquisitions and Divestitures—Acquisitions—Other”).

(c) Three and six month 2013 amounts include increases in operating expense of $162 million and $177 million, respectively, associated with adjustments to legal liabilities related to both transportation rate case and environmental matters.

(d) Six month 2013 amount includes a $141 million increase in earnings from the after-taxgain on the sale of our investments in the Express pipeline system.

(e) Includes cash and cash equivalents; margin and restricted deposits; unallocable interest receivable, prepaid assets and deferred charges; and risk management assets related to debt fair value adjustments.