-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RL9ZRDe7iH0GFok9U4dPDlKDsR/gny/pdrKGEXbfkvO7U1xSh/sfUH8JC4JMt9r/ fR54QtQv90Xtl65GDMoKmg== 0000950129-01-502699.txt : 20010821 0000950129-01-502699.hdr.sgml : 20010821 ACCESSION NUMBER: 0000950129-01-502699 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010817 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20010820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KINDER MORGAN ENERGY PARTNERS L P CENTRAL INDEX KEY: 0000888228 STANDARD INDUSTRIAL CLASSIFICATION: PIPE LINES (NO NATURAL GAS) [4610] IRS NUMBER: 760380342 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11234 FILM NUMBER: 1718358 BUSINESS ADDRESS: STREET 1: 370 VAN GORDON STREET CITY: LAKEWOOD STATE: CO ZIP: 80228 BUSINESS PHONE: 3039144752 MAIL ADDRESS: STREET 1: 370 VAN GORDON STREET STREET 2: 2600 GRAND AVENUE CITY: LAKEWOOD STATE: CO ZIP: 80228-8304 FORMER COMPANY: FORMER CONFORMED NAME: ENRON LIQUIDS PIPELINE L P DATE OF NAME CHANGE: 19970304 8-K 1 h90134e8-k.txt KINDER MORGAN ENERGY PARTNERS, L.P. - 08/17/01 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 DATE OF REPORT: AUGUST 17, 2001 (DATE OF EARLIEST EVENT REPORTED: JULY 18, 2001) KINDER MORGAN ENERGY PARTNERS, L.P. (Exact name of registrant as specified in its charter) DELAWARE 1-11234 76-0380342 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.)
500 Dallas Street, Suite 1000 Houston, Texas 77002 (Address of principal executive offices, including zip code) 713-369-9000 (Registrant's telephone number, including area code) 2 ITEM 5. OTHER EVENTS. On July 18, 2001, Kinder Morgan Energy Partners, L.P. (the "Partnership") issued a press release announcing a two-for-one split of the Partnership's common units and i-units. The common unit split will take place in the form of a distribution of one common unit for each common unit outstanding, with common units to be distributed on August 31, 2001 to holders of record as of August 17, 2001. The i-unit split will take place in the form of a distribution of one i-unit for each i-unit outstanding, with i-units to be distributed on August 31, 2001 to holders of record as of August 17, 2001. Pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended, the Partnership's Registration Statement on Form S-8 (File No. 333-56343) is deemed to cover additional common units to be issued or issuable thereunder as a result of the unit split. Further, the Partnership's Registration Statements on Form S-3 (File Nos. 333-60912, 333-55866 and 333-54616) are deemed to cover additional common units issued or issuable thereunder as a result of the common unit split and, as applicable, additional i-units to be issued by the Partnership as a result of the i-unit split. Also, the Partnership's Registration Statements on Form S-3 (File Nos. 333-66931, 333-62155, 333-56335, 333-50431, 333-33726, 333-25997, and 333-25995) are deemed to cover additional common units issued or issuable thereunder as a result of the common unit split to the extent that any common units have not been offered or sold under such Registration Statements. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Exhibit Description - ------- ----------- 99.1 Press release of Kinder Morgan Energy Partners, L.P. dated July 18, 2001. -2- 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. KINDER MORGAN ENERGY PARTNERS, L.P. By: KINDER MORGAN G.P., INC., its general partner By: KINDER MORGAN MANAGEMENT, LLC, its delegate Dated: August 17, 2001 By: /s/JOSEPH LISTENGART ----------------------------------------- Joseph Listengart Vice President, General Counsel and Secretary -3- 4 EXHIBIT INDEX Exhibit Description - ------- ----------- 99.1 Press release of Kinder Morgan Energy Partners, L.P. dated July 18, 2001. -4- EX-99.1 3 h90134ex99-1.txt PRESS RELEASE OF KINDER MORGAN ENERGY PARTNERS LP 1 EXHIBIT 99.1 [KINDER MORGAN ENERGY PARTNERS, L.P. LOGO APPEARS HERE] Larry Pierce Irene Twardowski Broussard Media Relations Investor Relations (713) 369-9407 (713) 369-9490 www.kindermorgan.com KINDER MORGAN ENERGY PARTNERS REPORTS RECORD QUARTER AND ANNOUNCES 2 FOR 1 SPLIT; $1.05 QUARTERLY DISTRIBUTION 24% HIGHER THAN 2000 HOUSTON, July 18, 2001 - Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced strong second quarter results. "We had a record quarter, with each business segment producing substantially increased cash flow and earnings compared to last year," said Richard D. Kinder, chairman and CEO of KMP. "Our results reflect both excellent internal growth and outstanding performance by recently acquired pipeline and terminal assets. We remain confident that we will be able to increase the distribution to unitholders later this year to an annualized rate of at least $4.40 per unit. Additionally, after reviewing our superb performance and future prospects, KMP has declared a two-for-one split of KMP's common units." KMP declared its second quarter distribution of $1.05 (an annualized rate of $4.20) per unit payable on Aug. 14, 2001 to unitholders of record as of July 31, 2001. The distribution is 24 percent higher than the distribution of $0.85 per unit paid for the second quarter of 2000. The common unit split will take place in the form of a one common unit distribution for each common unit outstanding, with units to be distributed on Aug. 31, 2001 to holders of record as of Aug. 17, 2001. This is the second time that KMP has split the units since its formation in February of 1997. Since then, KMP has returned over 580 percent to its unitholders. (more) -5- 2 KMP-Q2 EARNINGS PAGE 2 KMP reported record quarterly net income of $104.2 million, or $0.72 per unit, versus $71.8 million, or $0.70 per unit, in the second quarter a year ago. The Product Pipelines segment delivered a 57 percent increase in earnings before DD&A of $101.8 million in the second quarter, compared to $65.0 million during the same period a year ago. Segment earnings were bolstered by the additions of the West Coast liquids terminals, the CALNEV Pipeline, the Central Florida Pipeline Company and KMP's 35 percent interest in the Cochin Pipeline System. The largest pipeline in this segment - Pacific Operations - which transports gasoline, jet fuel and diesel fuel on the West Coast, realized delivery volume growth of 4.5 percent. The Natural Gas Pipelines segment produced segment earnings before DD&A of $39.6 million, a 24 percent increase over the $31.8 million reported in the second quarter of 2000. This increase primarily reflected strong earnings growth from Red Cedar Gathering Company and the inclusion of additional gas assets that were transferred from Kinder Morgan, Inc. (NYSE: KMI) to KMP at the end of 2000. "Adding Kinder Morgan Texas Pipeline to this segment has made our gas pipeline business more seasonal, shifting more of the segment's income to the first and fourth quarters," Kinder explained. "For this reason, the year-to-date increase of 56 percent in segment earnings before DD&A is more representative than a second quarter comparison." The CO2 Pipelines segment delivered second quarter earnings before DD&A of $28.6 million, 21 percent higher than the $23.7 million reported in the same period a year ago. The increase was primarily attributable to demand growth, as evidenced by a 3 percent increase in volumes, and to the contribution from a recent joint-venture with Marathon. "Interest in CO2 flooding has increased, and we are continuing to execute new contracts by aggressively marketing our expertise and educating potential customers," Kinder said. Bulk Terminals, comprised of over 30 terminals that transload coal, petroleum coke and other aggregates, reported a 34 percent increase in segment income before DD&A to $17.0 million, compared to $12.7 million in the second quarter of 2000. (more) -6- 3 KMP-Q2 EARNINGS PAGE 3 Earnings growth in this segment was spearheaded by strong performances at the Grand Rivers and Cora coal terminals in Kentucky and Illinois, respectively; the addition of a second dock at the Shipyard River Terminal in Charleston, S.C., which handles both dry-bulk and liquids products; and earnings that exceeded expectations at Delta Terminals, two liquids terminals in New Orleans, La. and Cincinnati, Ohio, which were acquired by KMP in December of 2000. The Liquids Terminals business segment includes five larger terminals acquired earlier this year that are not associated with KMP's existing product pipelines. Located in New York harbor, Chicago, Philadelphia and Houston, these terminals store and transfer both petroleum products and chemicals. Second quarter earnings before DD&A were $21.4 million, higher than anticipated at the time of the acquisition. "We recently combined our bulk terminals and liquids terminals business units into a new segment under one management team," Kinder said. "The reorganization should enhance our ability to cross-sell services to national customers and to acquire facilities that have both liquid and bulk operations." Beginning in the third quarter, KMP will report the combined operations in the "Terminals" segment. Other accomplishments in the quarter included: o Acquisitions - A $44 million cash acquisition of four bulk terminals from Koninklijke Vopak N.V. (Royal Vopak) of The Netherlands. The terminals are located in Florida and Virginia. KMP also acquired an additional 2.3 percent ownership interest in the Cochin Pipeline System from Shell Canada Limited, increasing its stake in the natural gas liquids pipeline to approximately 35 percent. Both acquisitions are expected to be immediately accretive to cash available for distribution to unitholders. o Expansion Projects - A $25 million expansion of Kinder Morgan CO2 Company's carbon dioxide project in the SACROC Unit in Scurry County of west Texas. The project is expected to increase deliveries of CO2 by 80 percent to SACROC, which still has significant undeveloped CO2 flood reserves. KMP also began a $9 million expansion project of the CALNEV pipeline, which transports gasoline, jet fuel and diesel fuel to the rapidly growing Las Vegas, Nev. market. This project will bolster the jet fuel supply to McCarran International Airport. Both projects will be immediately accretive to KMP's cash flow upon completion. (more) -7- 4 KMP-Q2 EARNINGS PAGE 4 o A new pipeline will be jointly developed with independent power company Calpine Corporation, subject to finalization of customer throughput agreements and obtaining necessary regulatory approvals. As proposed, the Sonoran Pipeline will be a 1,160-mile, high-pressure interstate natural gas pipeline from the San Juan Basin in northern New Mexico to markets in California. The project will provide much needed natural gas transportation capacity to California to serve rapidly growing electric generation demand. o A highly successful equity offering through Kinder Morgan Management, LLC (NYSE: KMR) which raised approximately $1 billion. This enabled KMP to reduce its debt-to-capital ratio to its targeted level of approximately 40 percent. Shareholders of KMR will receive a distribution in the form of additional KMR shares based on the $1.05 distribution per unit declared by KMP. This distribution is payable on Aug. 14, 2001 to shareholders of record as of July 31, 2001. The number of shares distributed will be calculated by dividing $1.05 by the average of KMR's closing market prices from July 13-26, 2001. KMR's only significant assets are the partnership units it owns in KMP, and KMR's shareholders receive share distributions equivalent in value to the cash distributions received by KMP's common unitholders. KMR's board of directors also declared a two-for-one split for KMR's shares. The share split will take place in the form of a one share distribution on each share outstanding, with shares to be distributed on Aug. 31, 2001 to holders of record as of Aug. 17, 2001. Kinder Morgan Energy Partners, L. P. is the nation's largest pipeline master limited partnership with an enterprise value of approximately $8 billion. It owns and operates one of the largest product pipeline and terminal systems in the country. In addition, it is a major transporter of natural gas, operating more than 10,000 miles of pipeline; is the nation's leading provider of CO2 for use in enhanced oil recovery projects; and is one of the largest operators of bulk terminals, with over 30 facilities that transload more than 50 million tons of coal, petroleum coke and other products annually. (more) -8- 5 KMP-Q2 EARNINGS PAGE 5 The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI), one of the largest midstream energy companies in America, operating more than 30,000 miles of natural gas and product pipelines. KMI also has significant retail distribution, electric generation and terminal assets. Combined, the two companies have an enterprise value of more than $17 billion. PLEASE JOIN US AT 5 P.M. EASTERN TIME ON WEDNESDAY, JULY 18, AT www.kindermorgan.com FOR A LIVE WEBCAST CONFERENCE CALL. This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 Form 10-K and 10-Q as filed with the Securities and Exchange Commission. # # # -9- 6 KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Unaudited) (in thousands except per unit amounts)
THREE MOS. ENDED JUNE 30 SIX MOS. ENDED JUNE 30 ---------------------------------- ----------------------------------- 2001 2000 2001 2000 ----------------- --------------- ---------------- ---------------- Revenues $ 735,755 $193,758 $1,764,400 $ 351,116 ----------------- --------------- ---------------- ---------------- Costs and Expenses Operating Expenses 527,731 72,022 1,345,692 127,054 Depreciation and amortization 35,948 19,904 66,023 38,749 General and administrative 18,016 15,380 46,601 29,703 Taxes, other than income taxes 15,464 6,476 29,137 12,573 ----------------- --------------- ---------------- ---------------- 597,159 113,782 1,487,453 208,079 ----------------- --------------- ---------------- ---------------- Operating Income 138,596 79,976 276,947 143,037 Other Income/(Expense) Earnings from equity investments 21,147 17,362 42,350 32,179 Amortization of excess cost of equity investments (2,253) (2,174) (4,506) (3,847) Interest expense (46,677) (22,760) (97,714) (43,852) Other 725 4,795 2,229 13,680 Minority interest (2,633) (2,091) (5,635) (3,769) ----------------- --------------- ---------------- ---------------- Income before income taxes 108,905 75,108 213,671 137,428 Income tax (expense)/benefit (4,679) (3,298) (7,778) (6,059) ----------------- --------------- ---------------- ---------------- Net Income $ 104,226 $ 71,810 $ 205,893 $ 131,369 ================= =============== ================ ================ CALCULATION OF LIMITED PARTNERS' INTEREST IN NET INCOME: Net Income $ 104,226 $ 71,810 $ 205,893 $ 131,369 Less: General Partner's interest in Net Income (50,606) (27,003) (92,228) (49,260) ----------------- --------------- ---------------- ---------------- Limited Partners' Net Income $ 53,620 $ 44,807 $ 113,665 $ 82,109 ================= =============== ================ ================ CALCULATION PER LIMITED PARTNER UNIT (FULLY DILUTED): Net Income/(Loss) per unit $ 0.72 $ 0.70 $ 1.60 $ 1.33 ================= =============== ================ ================ Number of Units Used in Computation 74,843 64,088 71,246 61,818 ================= =============== ================ ================ ADDITIONAL PER UNIT INFORMATION: - -------------------------------- Depreciation and amortization $0.51 $0.34 $0.99 $0.69 ===== ===== ===== ===== Sustaining capital expenditures $0.18 $0.17 $0.43 $0.24 ===== ===== ===== ===== Declared distribution $1.05 $0.85 $2.10 $1.63 ===== ===== ===== =====
-10- 7 KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES EARNINGS CONTRIBUTION BY BUSINESS SEGMENT (Unaudited) (in thousands)
THREE MOS. ENDED JUNE 30 SIX MOS. ENDED JUNE 30 --------------------------------- ----------------------------------- 2001 2000 2001 2000 ---------------- --------------- ---------------- ---------------- SEGMENT EARNINGS BEFORE DD&A: Product Pipelines $ 101,788 $ 64,969 $ 187,581 $ 129,730 Natural Gas Pipelines 39,564 31,808 105,838 67,882 CO2 Pipelines 28,622 23,719 56,210 27,309 Bulk Terminals 16,991 12,660 32,325 24,431 Liquids Terminals 21,386 - 41,786 - SEGMENT EARNINGS CONTRIBUTION: Product Pipelines $ 84,096 $ 53,566 $ 153,944 $ 106,973 Natural Gas Pipelines 31,974 26,531 90,646 55,670 CO2 Pipelines 23,753 20,601 47,215 24,188 Bulk Terminals 13,452 10,380 25,700 19,925 Liquids Terminals 16,875 - 35,706 - General and Administrative (18,016) (15,380) (46,601) (29,703) Net Debt Costs (Includes Interest Income) (45,275) (21,797) (95,082) (41,915) Less: Minority Interest (2,633) (2,091) (5,635) (3,769) ---------------- --------------- ---------------- ---------------- Net income $ 104,226 $ 71,810 $ 205,893 $ 131,369 ================ =============== ================ ================
VOLUME HIGHLIGHTS
THREE MOS. ENDED JUNE 30 SIX MOS. ENDED JUNE 30 --------------------------------- ----------------------------------- 2001 2000 2001 2000 ---------------- --------------- ---------------- ---------------- PRODUCT PIPELINES Delivery Volumes (MBbl)(1) 197,973 192,926 369,943 357,562 NATURAL GAS PIPELINES Transport Volumes (Bcf)(2) 108.3 112.8 217.4 220.6 CO2 PIPELINES Delivery Volumes (Bcf)(3) 93.2 90.7 191.9 185.0 BULK TERMINALS Transload Tonnage (Mtons)(4) 12,399 10,116 24,079 21,157 LIQUIDS TERMINALS Throughput Volumes (MBbl)(5) 125,580 105,502 233,823 208,265
(1) Includes Pacific, Plantation, North System, Calnev, Central Florida, Cypress and Heartland. 2000 information for comparative purposes only. (2) Includes KMIGT and Trailblazer. (3) Includes Cortez, Central Basin and CRC pipeline volumes. 2000 information for comparative purposes only. (4) Includes Cora, Grand Rivers and KMBT aggregate terminals. (5) Includes 5 terminals in Houston, New Jersey, Chicago and Philadelphia. 2000 information for comparative purposes only. -11- -----END PRIVACY-ENHANCED MESSAGE-----