Delaware (State or other jurisdiction of incorporation) | 1-11234 (Commission File Number) | 76-0380342 (I.R.S. Employer Identification No.) |
þ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition |
Item 9.01. | Financial Statements and Exhibits |
(c) | Exhibits The exhibit set forth below is being furnished pursuant to Item 2.02. |
Exhibit Number | Description |
99.1 | Press release of Kinder Morgan Energy Partners, L.P. issued October 15, 2014. |
Kinder Morgan Energy Partners, L.P. | ||||
Registrant | ||||
By: | Kinder Morgan G.P., Inc., | |||
its general partner | ||||
By: | Kinder Morgan Management, LLC, | |||
its delegate | ||||
By: | /s/ Kimberly A. Dang | |||
Kimberly A. Dang | ||||
Vice President |
Exhibit Number | Description | |
99.1 | Press release of Kinder Morgan Energy Partners, L.P. issued October 15, 2014. |
KMP – 3Q Earnings | Page 2 |
KMP – 3Q Earnings | Page 3 |
KMP – 3Q Earnings | Page 4 |
KMP – 3Q Earnings | Page 5 |
KMP – 3Q Earnings | Page 6 |
• | TGP closed a successful binding open season for its South System Flexibility project and awarded all of the 500,000 dekatherms per day (Dth/d) of capacity to MexGas Supply. The project will provide more than 900 miles of north-to-south transportation capacity on the TGP system from Tennessee to South Texas and expand Kinder Morgan’s transportation service to Mexico. The approximately $187 million project is expected to be in service in January 2015, with an initial volume of 150,000 Dth/d reaching 500,000 Dth/d in December 2016. Additionally, TGP initiated a binding open season Oct. 10 for its proposed Lone Star expansion project, which includes an incremental 300,000 Dth/d of firm transportation from Tennessee to South Texas for future infrastructure projects. TGP has secured an anchor shipper for this project and will announce the results and further details upon the close of the open season Oct. 31. Although we will continue to solicit additional volume commitments |
KMP – 3Q Earnings | Page 7 |
• | TGP continues development of its proposed Northeast Energy Direct Project. TGP has received a number of key commitments from New England local distribution company customers and continues to negotiate additional commitments with New England and Canadian customers. The project consists of a supply path and a market path. The 169-mile supply path (scalable up to 1 Bcf/d of capacity) will extend from the Marcellus supply area in Pennsylvania to a point near Wright, New York. The market path (scalable up to 2.2 Bcf/d) will consist of 177 miles of mainline from Wright to Dracut, Massachusetts, together with laterals to serve specific local distribution companies. Based on customer commitments, the anticipated capital required for both projects is projected to be $4.5 to $5 billion. Subject to regulatory approvals, a November 2018 in-service date is planned. |
• | TGP is completing final facility design for the Broad Run Flexibility and Broad Run Expansion projects, which will move gas north-to-south from a receipt point in West Virginia to delivery points in Mississippi and Louisiana. The estimated capital expenditure for the two projects is approximately $747 million. Antero Resources was awarded 790,000 Dth/d of long-term firm capacity for 15 years following a binding open season in April 2014. TGP expects to file a certificate application with the FERC in early 2015 and plans to place the two projects in service in November 2015 and November 2017, respectively, pending regulatory approvals. |
• | The first portion of an approximately $125 million expansion of the Kinder Morgan Texas and Mier-Monterrey pipelines was placed into service on Sept. 1 on time and within budget. The project provides 150,000 Dth/d of service to Mexico’s state owned electric utility on an interim basis and is part of a larger project that is supported by three customers in Mexico that entered into long-term firm transportation contracts for more than 200,000 Dth/d of capacity that will be phased in from 2015 to 2016. |
• | Construction of the 60-mile Sierrita Pipeline near Tucson, Arizona, is nearing completion and expected to be in service later this month. Construction, which began in early July, was delayed several weeks, principally because of heavy summer rains and additional county construction requirements. KMP, a 35 percent owner, will invest approximately $72 million in the $204 million project and will operate the pipeline. |
• | In a project related to the Sierrita Pipeline, EPNG placed phase one of its approximately $529 million system expansion project in Arizona in service Oct. 1. The first phase of work involved system improvements to deliver volumes to the Sierrita Pipeline. The second phase will result in incremental deliveries of natural gas to Arizona and California and is expected to be completed by October 2020. As part of this project, EPNG entered into long-term contracts in the first quarter this year totaling 550,000 Dth/d of incremental firm natural gas transport capacity. |
• | Subject to regulatory approvals, a November 2014 in-service date is planned for TGP’s approximately $83 million Rose Lake expansion project in northeastern Pennsylvania. The project will provide long-term transportation service for two shippers that have fully subscribed to 230,000 Dth/d of firm capacity. |
KMP – 3Q Earnings | Page 8 |
• | TGP filed an application with the FERC on July 31, 2014, for its approximately $82 million Connecticut Expansion Project. The fully subscribed project will provide 72,000 Dth/d of additional long-term capacity to three natural gas utility customers. Subject to regulatory approvals, the project is expected to be in service in November 2016. |
• | FERC issued an Environmental Assessment in July for TGP’s proposed $26 million Niagara expansion project which will provide 158,000 Dth/d of long-term capacity to serve eastern Canadian markets. The project is under contract and is expected to be in service in November 2015, subject to regulatory approvals. |
• | KMP’s Yellow Jacket Central Facility expansion was placed into service on Sept. 29, about six weeks ahead of schedule. The approximately $214 million booster compression project at the McElmo Dome source field in southwestern Colorado will increase CO2 production by up to 90 MMcf/d. |
• | Construction is going well at KMP’s approximately $344 million Cow Canyon expansion project in southwestern Colorado, including the drilling of production wells. This expansion is expected to increase CO2 production in the Cow Canyon area of the McElmo Dome source field by 200 MMcf/d. KMP anticipates that 100 MMcf/d of CO2 will come online by July 2015 and the remaining 100 MMcf/d is expected to be in service by the end of 2015. |
• | KMP continues to move forward on its proposed $310 million Lobos Pipeline, a new, 214‑mile pipeline that will transport CO2 from the company’s St. Johns source field in Apache County, Arizona, to the Kinder Morgan-operated Cortez Pipeline in Torrance County, New Mexico. The pipeline will have an initial capacity of 300 MMcf/d. The company also plans to invest approximately $700 million to drill wells and build field gathering, treatment and compression facilities at the St. Johns CO2 source field. Pending regulatory approvals, the project is expected to be in service by the third quarter of 2016. |
• | Final design is underway and major equipment and pipe have been ordered for KMP’s approximately $327 million Cortez Pipeline expansion. The pipeline transports CO2 from southwestern Colorado to eastern New Mexico and West Texas for use in EOR projects, and the expansion will increase capacity from 1.35 Bcf/d to 2 Bcf/d. Pending regulatory approvals, the northern portion of the Cortez Pipeline expansion is expected to be completed by July 2015 to handle the additional volumes from Cow Canyon, while the southern portion |
KMP – 3Q Earnings | Page 9 |
• | KMP continues to move forward on an approximately $45 million project to transport and process produced gas from the Chevron-operated Reinecke Field Unit in Borden County, Texas, to Kinder Morgan’s SACROC complex in Scurry County, Texas. As part of the project, KMP plans to build a new, 15-mile pipeline with an initial capacity of 50 MMcf/d to transport the gas to SACROC for CO2 and hydrocarbon processing, and to expand gathering, compression and processing facilities at its SACROC facility. The project is expected to be completed in the third quarter of 2015. |
• | KMP in September entered into a long-term transportation agreement with NOVA Chemicals as anchor shipper of its previously announced Utica to Ontario Pipeline Access (UTOPIA) project. The announcement came during a binding open season for the project, which will transport ethane and ethane-propane mixtures from the prolific Utica Shale. Although we will continue to solicit additional volume commitments, this transportation agreement provides the necessary commitment level required to move forward with the project. The approximately $500 million UTOPIA project is expected to have an initial capacity of 50,000 barrels per day (bpd), expandable to more than 75,000 bpd. With the receipt of necessary permitting and regulatory approvals, the project is expected to be in service by early 2018. |
• | Also in September, KMP extended its binding open season for the proposed Palmetto Project to Oct. 30. The approximately $1 billion project would move gasoline, diesel and ethanol from Louisiana, Mississippi and South Carolina to points in South Carolina, Georgia and Florida. The project has a design capacity of 167,000 bpd and would consist of a segment of expansion capacity that Palmetto would lease from Plantation Pipe Line Company and a new 360-mile pipeline that would be built from Belton, South Carolina to Jacksonville, Florida. Pending a successful extended open season and timely regulatory approvals, the project remains on track for an in-service date of July 2017. |
• | Construction continues on KMP’s approximately $360 million petroleum condensate processing facility near its Galena Park terminal on the Houston Ship Channel. Supported by a long-term, fee-based agreement with BP North America for all 100,000 bpd of throughput capacity, the project includes building two separate units to split condensate into various components and construct storage tanks totaling almost 2 million barrels to support the processing operation. Due to inclement weather and vendor delays, the first phase of the splitter is now scheduled to be commissioned in December 2014 and operational in January 2015, and the second phase is expected to come online in the summer of 2015. |
• | KMP continues to develop its Utica Marcellus Texas Pipeline (UMTP), which was announced in the fourth quarter of 2013. The proposed UMTP would involve the abandonment and conversion of over 1,000 miles of natural gas service on TGP, the construction of approximately 200 miles of new pipeline from Louisiana to Texas and 155 miles of new laterals in Pennsylvania, Ohio and West Virginia. The pipeline, which will provide connectivity to major processing and fractionation hubs in the basin, will terminate |
KMP – 3Q Earnings | Page 10 |
• | KMP continues to see strong interest for transportation of Eagle Ford crude and condensate to the Houston Ship Channel. In August, KMP announced a long-term transportation agreement with Republic Midstream Marketing to build an interconnect and other facilities for its Kinder Morgan Crude and Condensate (KMCC) pipeline. In September, KMCC began operations of the Helena Extension project, moving Eagle Ford crude and condensate production from Karnes County to the Houston Ship Channel and the Phillips 66 Sweeny Refinery. At this point, the company has secured long-term commitments for more than 75 percent of the 300,000 bpd of capacity on its KMCC pipeline and expects to have all of the capacity fully contracted in the first quarter of 2015. Including joint ventures and other projects, KMP’s planned investments related to Eagle Ford crude and condensate opportunities currently total approximately $1 billion, all of which are supported by long-term contracts with customers. These expansions will further enhance the connectivity of the KMCC system to additional Eagle Ford supplies and Texas Gulf Coast market outlets. KMP expects to bring these projects online as they are completed between now and the first half of 2015. |
• | SFPP reached a settlement with its shippers in the longstanding rate proceedings pending before the California Public Utilities Commission (CPUC). The settlement includes refunds in the amount of $319 million, which is consistent with the reserve amount established by KMP. It also includes a three year moratorium on new rate filings or complaints and establishes current rates consistent with the revenues recognized by SFPP in 2014. The settlement has been filed with the Administrative Law Judges handling the various proceedings. Approval is expected in the fourth quarter, at which time the refund amount will be paid. The refund will have no impact on KMP’s earnings in the fourth quarter or KMP’s 2014 outlook for distribution to its limited partners. |
• | Construction was completed in September at the Houston Ship Channel on the second phase of the Battleground Oil Specialty Terminal Company (BOSTCO) expansion, which added 900,000 incremental barrels of distillate product storage capacity, a rail header extension and 24 rail spots. The approximately $540 million BOSTCO terminal is fully subscribed for a total capacity of 7.1 million barrels and handles ultra-low sulfur diesel, residual fuels and other black oil terminal services. KMP owns 55 percent of and operates BOSTCO. |
• | Three of the four tanks being added to KMP’s Edmonton Terminal as part of a 1.2 million barrel, phase-two expansion were placed into service in the third quarter, with the final tank expected to come online in the fourth quarter. In total, the two-phase expansion project will add 4.6 million barrels of storage capacity at the terminal for crude oil and refined petroleum products. The approximately $420 million project is supported by long-term contracts with major producers and refiners. |
• | In the third quarter, KMP announced that its 50-50 joint venture with Imperial Oil Limited entered into additional firm take or pay agreements with strong, credit worthy oil company |
KMP – 3Q Earnings | Page 11 |
• | Work continues at the Kinder Morgan Export Terminal along the Houston Ship Channel to construct a new ship dock that will handle ocean going vessels and provide 1.5 million barrels of liquids storage capacity. The approximately $172 million project is supported by a long-term contract with a major ship channel refiner and will connect to KMP’s nearby Galena Park Terminal. The project is expected to be in service in the second quarter of 2016. |
• | At KMP’s Galena Park and Pasadena terminals, construction continues on nine additional storage tanks with a total capacity of 1.2 million barrels and a new barge dock. In the third quarter, three storage tanks at Galena Park were completed and the balance will be phased into service through the first quarter of 2015. The barge dock at Pasadena will provide capacity to handle up to 50 barges per month and is expected to be operational in the third quarter of 2015. Capital expenditures for the project are approximately $118 million. |
• | In September, the first steel was cut for the Lone Star State, one of five Jones Act tankers ordered by KMP’s American Petroleum Tankers under a construction contract awarded to General Dynamics NASSCO’s San Diego shipyard. The contract calls for the design and construction of five, 50,000-deadweight-ton, LNG-conversion-ready product carriers, each with a 330,000 barrel cargo capacity. The 610-foot-long tankers are a new “ECO” design, offering improved fuel efficiency, and include the latest environmental protection features, including a ballast water treatment system. The tankers, to be delivered between 2015 and 2017, are supported by long-term time charters with major shippers. |
• | Construction of the previously announced expansion at KMP’s Deeprock Development joint venture was virtually completed in the third quarter, on time and on budget. The project added 1.5 million barrels of storage capacity and two pipelines with connectivity to five Cushing, Oklahoma, area destinations. Additionally, the system improvements provide Tallgrass Energy Partners’ Pony Express Pipeline with up to 350,000 bpd of capacity. KMP owns 51 percent of the joint venture and will invest approximately $32 million in the project. |
• | Construction is nearly complete at KMP’s and Keyera Corp.’s previously announced joint venture crude oil rail loading facility in Edmonton. The Alberta Crude Terminal will be able to accept crude oil streams handled at KMP’s North 40 Terminal for loading and delivery via rail to refineries anywhere in North America. The facility will be operated by Keyera and will be capable of loading approximately 40,000 bpd of crude oil into tank cars. KMP is investing approximately $31 million in the project, which is expected to be in full service in the fourth quarter of 2014. |
• | As announced yesterday, KMP will further expand its Pasadena and Galena Park terminals to help meet growing demand for refined product storage and dock services along the Houston Ship Channel. The combined investment of approximately $240 million will include construction of 2.1 million barrels of storage between the two terminals. KMP will also |
KMP – 3Q Earnings | Page 12 |
• | Kinder Morgan Canada is currently engaged in the process of achieving approval from the National Energy Board for the Trans Mountain Expansion Project. The company continues to engage extensively with landowners, Aboriginal groups, communities and stakeholders along the proposed expansion route, and marine communities. In August, based on feedback from landowners and local residents, Trans Mountain determined that tunneling or drilling under Burnaby mountain was less disruptive than constructing the pipe in road right-of-way and landowners’ yards, and switched its preferred route from the roadway to a route through the mountain. The National Energy Board ruled that it was appropriate to extend the timeline for consideration of the application by seven months to permit examination of this route. The NEB decision is scheduled for January of 2016 and the company now expects the Trans Mountain expansion to be completed in the third quarter of 2018. Thirteen companies in the Canadian producing and oil marketing business signed firm contracts supporting the project for approximately 708,000 bpd. Kinder Morgan Canada received approval of the commercial terms related to the expansion from the NEB in May of 2013. The proposed $5.4 billion expansion will increase capacity on Trans Mountain from approximately 300,000 bpd to 890,000 bpd. |
• | In the third quarter, KMP and KMR sold common units and shares valued at approximately $143 million under their at-the-market programs, bringing the total equity issued to approximately $1.212 billion for the first nine months of the year. KMP also issued $1.2 billion in senior notes in September. |
KMP – 3Q Earnings | Page 13 |
KMP – 3Q Earnings | Page 14 |
KMP – 3Q Earnings | Page 15 |
KMP – 3Q Earnings | Page 16 |
Larry Pierce | Investor Relations | |
Media Relations | (713) 369-9490 | |
(713) 369-9407 | km_ir@kindermorgan.com | |
larry_pierce@kindermorgan.com | www.kindermorgan.com |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues | $ | 3,933 | $ | 3,381 | $ | 11,162 | $ | 9,059 | |||||||
Costs, expenses and other | |||||||||||||||
Operating expenses | 2,140 | 1,989 | 6,322 | 5,175 | |||||||||||
Depreciation, depletion and amortization | 427 | 377 | 1,234 | 1,062 | |||||||||||
General and administrative | 126 | 136 | 411 | 433 | |||||||||||
Taxes, other than income taxes | 80 | 71 | 250 | 220 | |||||||||||
Other expense (income) | (1 | ) | (59 | ) | (4 | ) | (83 | ) | |||||||
2,772 | 2,514 | 8,213 | 6,807 | ||||||||||||
Operating income | 1,161 | 867 | 2,949 | 2,252 | |||||||||||
Other income (expense) | |||||||||||||||
Earnings from equity investments | 66 | 68 | 203 | 225 | |||||||||||
Amortization of excess cost of equity investments | (3 | ) | (3 | ) | (11 | ) | (7 | ) | |||||||
Interest, net | (238 | ) | (219 | ) | (707 | ) | (632 | ) | |||||||
Gain on sale of investments in Express | — | (1 | ) | — | 224 | ||||||||||
Gain on remeasurement of net assets to fair value | — | — | — | 558 | |||||||||||
Other, net | 14 | 5 | 29 | 28 | |||||||||||
Income from continuing operations before income taxes | 1,000 | 717 | 2,463 | 2,648 | |||||||||||
Income taxes | (24 | ) | (20 | ) | (64 | ) | (147 | ) | |||||||
Income from continuing operations | 976 | 697 | 2,399 | 2,501 | |||||||||||
Loss from discontinued operations | — | — | — | (2 | ) | ||||||||||
Net income | 976 | 697 | 2,399 | 2,499 | |||||||||||
Net income attributable to Noncontrolling Interests | (13 | ) | (8 | ) | (29 | ) | (27 | ) | |||||||
Net income attributable to KMP | $ | 963 | $ | 689 | $ | 2,370 | $ | 2,472 | |||||||
Calculation of Limited Partners' interest in net income (loss) attributable to KMP | |||||||||||||||
Income from continuing operations attributable to KMP | $ | 963 | $ | 689 | $ | 2,370 | $ | 2,474 | |||||||
Less: Pre-acquisition earnings and severance allocated to General Partner | (1 | ) | 2 | 5 | (11 | ) | |||||||||
Less: General Partner's remaining interest | (476 | ) | (436 | ) | (1,393 | ) | (1,260 | ) | |||||||
Limited Partners' interest | 486 | 255 | 982 | 1,203 | |||||||||||
Add: Limited Partners' interest in discontinued operations | — | — | — | (2 | ) | ||||||||||
Limited Partners' interest in net income | $ | 486 | $ | 255 | $ | 982 | $ | 1,201 | |||||||
Limited Partners' net income (loss) per unit: | |||||||||||||||
Income from continuing operations | $ | 1.05 | $ | 0.59 | $ | 2.15 | $ | 2.95 | |||||||
Loss from discontinued operations | — | — | — | (0.01 | ) | ||||||||||
Net income | $ | 1.05 | $ | 0.59 | $ | 2.15 | $ | 2.94 | |||||||
Weighted average units outstanding | 463 | 435 | 456 | 408 | |||||||||||
Declared distribution / unit | $ | 1.40 | $ | 1.35 | $ | 4.17 | $ | 3.97 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Segment earnings before DD&A and amortization of excess investments | |||||||||||||||
Natural Gas Pipelines | $ | 863 | $ | 635 | $ | 2,221 | $ | 2,315 | |||||||
CO2 | 388 | 340 | 1,083 | 1,040 | |||||||||||
Products Pipelines | 222 | 202 | 633 | 399 | |||||||||||
Terminals | 249 | 217 | 696 | 610 | |||||||||||
Kinder Morgan Canada | 50 | 43 | 138 | 286 | |||||||||||
$ | 1,772 | $ | 1,437 | $ | 4,771 | $ | 4,650 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Segment earnings before DD&A and amort. of excess investments (1) | |||||||||||||||
Natural Gas Pipelines | $ | 661 | $ | 608 | $ | 2,026 | $ | 1,671 | |||||||
CO2 | 363 | 349 | 1,089 | 1,040 | |||||||||||
Products Pipelines | 222 | 202 | 635 | 581 | |||||||||||
Terminals | 247 | 199 | 702 | 577 | |||||||||||
Kinder Morgan Canada | 50 | 44 | 138 | 146 | |||||||||||
Total | $ | 1,543 | $ | 1,402 | $ | 4,590 | $ | 4,015 | |||||||
Segment DD&A and amortization of excess investments | |||||||||||||||
Natural Gas Pipelines (2) | $ | 169 | $ | 157 | $ | 490 | $ | 397 | |||||||
CO2 | 134 | 122 | 379 | 356 | |||||||||||
Products Pipelines | 37 | 34 | 110 | 100 | |||||||||||
Terminals | 78 | 53 | 228 | 156 | |||||||||||
Kinder Morgan Canada | 12 | 14 | 38 | 41 | |||||||||||
Total | $ | 430 | $ | 380 | $ | 1,245 | $ | 1,050 | |||||||
Segment earnings contribution | |||||||||||||||
Natural Gas Pipelines (1) (2) | $ | 492 | $ | 451 | $ | 1,536 | $ | 1,274 | |||||||
CO2 (1) | 229 | 227 | 710 | 684 | |||||||||||
Products Pipelines (1) | 185 | 168 | 525 | 481 | |||||||||||
Terminals (1) | 169 | 146 | 474 | 421 | |||||||||||
Kinder Morgan Canada (1) | 38 | 30 | 100 | 105 | |||||||||||
General and administrative (1) (3) | (129 | ) | (137 | ) | (414 | ) | (394 | ) | |||||||
Interest, net (1) (4) | (238 | ) | (221 | ) | (699 | ) | (625 | ) | |||||||
Net income before certain items | 746 | 664 | 2,232 | 1,946 | |||||||||||
Certain items | |||||||||||||||
Remeasurement of net assets to fair value (5) | — | — | — | 556 | |||||||||||
Acquisition costs (6) | — | (1 | ) | — | (33 | ) | |||||||||
Legal and environmental reserves (7) | (1 | ) | — | (24 | ) | (177 | ) | ||||||||
Drop down asset groups' pre-acquisition earnings (8) | — | — | — | 19 | |||||||||||
Mark to market, ineffectiveness, and amortization of certain hedges (9) | 33 | (18 | ) | (5 | ) | (10 | ) | ||||||||
Insurance deductible, casualty losses and reimbursements (10) | (2 | ) | 19 | (11 | ) | 33 | |||||||||
Gain on sale or removal of assets, net of income tax expense | (4 | ) | 34 | (2 | ) | 170 | |||||||||
Contract buyout (11) | 198 | — | 198 | — | |||||||||||
Severance (12) | 1 | (2 | ) | (6 | ) | (8 | ) | ||||||||
Fair value amortization (13) | 5 | 1 | 17 | 3 | |||||||||||
Sub-total certain items | 230 | 33 | 167 | 553 | |||||||||||
Net income | $ | 976 | $ | 697 | $ | 2,399 | $ | 2,499 | |||||||
Less: Pre-acquisition earnings and severance allocated to General Partner | (1 | ) | 2 | 5 | (11 | ) | |||||||||
Less: General Partner's remaining interest in net income (14) | (476 | ) | (436 | ) | (1,393 | ) | (1,260 | ) | |||||||
Less: Noncontrolling Interests in net income | (13 | ) | (8 | ) | (29 | ) | (27 | ) | |||||||
Limited Partners' net income | $ | 486 | $ | 255 | $ | 982 | $ | 1,201 | |||||||
Net income before certain items | $ | 746 | $ | 664 | $ | 2,232 | $ | 1,946 | |||||||
Less: Noncontrolling Interests before certain items | (11 | ) | (8 | ) | (28 | ) | (22 | ) | |||||||
Net income attributable to KMP before certain items | 735 | 656 | 2,204 | 1,924 | |||||||||||
Less: General Partner's interest in net income before certain items (14) | (473 | ) | (436 | ) | (1,392 | ) | (1,255 | ) | |||||||
Limited Partners' net income before certain items | 262 | 220 | 812 | 669 | |||||||||||
Depreciation, depletion and amortization (15) | 452 | 400 | 1,309 | 1,117 | |||||||||||
Book (cash) taxes - net | 20 | 22 | 36 | 34 | |||||||||||
Express & Endeavor contribution | (6 | ) | 4 | (4 | ) | (1 | ) | ||||||||
Sustaining capital expenditures (16) | (121 | ) | (92 | ) | (292 | ) | (210 | ) | |||||||
DCF before certain items | $ | 607 | $ | 554 | $ | 1,861 | $ | 1,609 | |||||||
Net income / unit before certain items | $ | 0.57 | $ | 0.51 | $ | 1.78 | $ | 1.64 | |||||||
DCF / unit before certain items | $ | 1.31 | $ | 1.27 | $ | 4.08 | $ | 3.94 | |||||||
Weighted average units outstanding | 463 | 435 | 456 | 408 |
(1) | Excludes certain items: |
• | 3Q 2013 - Natural Gas Pipelines $27, CO2 $(9), Terminals $18, Kinder Morgan Canada $(1), general and administrative expense $(3), interest $1. |
• | YTD 2013 - Natural Gas Pipelines $644, Products Pipelines $(182), Terminals $33, Kinder Morgan Canada $140, general and administrative expense $(49), interest $(12). |
• | 3Q 2014 - Natural Gas Pipelines $202, CO2 $25, Terminals $2, general and administrative expense $1. |
• | YTD 2014 - Natural Gas Pipelines $195, CO2 $(6), Products Pipelines $(2), Terminals $(6), general and administrative expense $(5), interest $(9). |
(2) | Excludes $19 in YTD 2013 of DD&A expense from our drop down asset groups for period prior to our acquisition date. |
(3) | General and administrative expense includes income tax that is not allocable to the segments: 3Q 2013 - $4, YTD 2013 - $10, 3Q 2014 - $2, and YTD 2014 - $8. Excludes $9 in YTD 2013 of G&A expense from our drop down asset groups for period prior to our acquisition date, which is included in certain items above. |
(4) | Interest expense excludes interest income that is allocable to the segments: 3Q 2013 - $1, YTD 2013 - $5, and YTD 2014 - $1. Excludes $15 in YTD 2013 of interest expense from our drop down asset groups for period prior to our acquisition date, which is included in certain items above. |
(5) | YTD 2013 include a $558 gain from the remeasurement of our previously held 50% equity interest in Eagle Ford to fair value. |
(6) | Acquisition expense items related to closed acquisitions. |
(7) | Legal reserve adjustments related to certain litigation and environmental matters. |
(8) | Earnings from our drop down asset groups for period prior to our acquisition date. |
(9) | Actual gain or loss is reflected in earnings before DD&A at time of physical transaction. |
(10) | Casualty losses including related write-off of assets and expenses net of insurance reimbursements. |
(11) | Earnings from the early termination of a long term natural gas transportation contract with a customer. |
(12) | Drop-down asset groups severance expense allocated to and paid by the General Partner. |
(13) | Amortization of revenue and debt fair value adjustments related to purchase accounting. |
(14) | General Partner's interest in net income reflects reductions for GP incentive givebacks for certain KMP acquisitions: 3Q 2013 - $25, YTD 2013 - $54, 3Q 2014 - $33, and YTD 2014 - $99. |
(15) | Includes Kinder Morgan Energy Partner's (KMP) share of certain equity investees' DD&A: 3Q 2013 - $20, YTD 2013 - $67, 3Q 2014 - $22, and YTD 2014 - $64. |
(16) | Includes KMP share of certain equity investees' sustaining capital expenditures (the same equity investees for which we add back DD&A per Note 13): 3Q 2013 - $1, YTD 2013 - $2, 3Q 2014 - $1, and YTD 2014 - $4. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Natural Gas Pipelines | |||||||||||||||
Transport Volumes (BBtu/d) (1) (2) | 17,561.8 | 15,998.2 | 17,481.4 | 16,216.3 | |||||||||||
Sales Volumes (BBtu/d) (3) | 2,446.1 | 2,509.5 | 2,303.3 | 2,428.5 | |||||||||||
Gathering Volumes (BBtu/d) (2) (4) | 3,170.2 | 3,029.4 | 3,046.1 | 2,993.5 | |||||||||||
CO2 | |||||||||||||||
Southwest Colorado Production - Gross (Bcf/d) (5) | 1.2 | 1.2 | 1.3 | 1.2 | |||||||||||
Southwest Colorado Production - Net (Bcf/d) (5) | 0.5 | 0.5 | 0.5 | 0.5 | |||||||||||
Sacroc Oil Production - Gross (MBbl/d) (6) | 33.1 | 29.6 | 32.4 | 30.1 | |||||||||||
Sacroc Oil Production - Net (MBbl/d) (7) | 27.6 | 24.6 | 26.9 | 25.1 | |||||||||||
Yates Oil Production - Gross (MBbl/d) (6) | 19.2 | 20.3 | 19.5 | 20.5 | |||||||||||
Yates Oil Production - Net (MBbl/d) (7) | 8.7 | 9.0 | 8.6 | 9.1 | |||||||||||
Katz Oil Production - Gross (MBbl/d) (6) | 3.4 | 2.7 | 3.6 | 2.4 | |||||||||||
Katz Oil Production - Net (MBbl/d) (7) | 2.8 | 2.2 | 3.0 | 2.0 | |||||||||||
Goldsmith Oil Production - Gross (MBbl/d) (6) | 1.2 | 1.3 | 1.2 | 0.6 | |||||||||||
Goldsmith Oil Production - Net (MBbl/d) (7) | 1.1 | 1.1 | 1.1 | 0.5 | |||||||||||
NGL Sales Volumes (MBbl/d) (8) | 10.3 | 9.6 | 10.1 | 9.8 | |||||||||||
Realized Weighted Average Oil Price per Bbl (9) (10) | $ | 87.59 | $ | 95.82 | $ | 89.40 | $ | 92.35 | |||||||
Realized Weighted Average NGL Price per Bbl (10) | $ | 43.57 | $ | 46.72 | $ | 46.18 | $ | 45.81 | |||||||
Products Pipelines | |||||||||||||||
Pacific, Calnev, and CFPL (MMBbl) | |||||||||||||||
Gasoline (11) | 72.0 | 72.8 | 207.0 | 205.3 | |||||||||||
Diesel | 28.0 | 27.9 | 79.8 | 80.2 | |||||||||||
Jet Fuel | 22.0 | 21.6 | 65.8 | 63.7 | |||||||||||
Sub-Total Refined Product Volumes - excl. Plantation and Parkway | 122.0 | 122.3 | 352.6 | 349.2 | |||||||||||
Plantation (MMBbl) (12) | |||||||||||||||
Gasoline | 42.4 | 36.4 | 119.0 | 107.3 | |||||||||||
Diesel | 9.8 | 8.8 | 30.6 | 26.1 | |||||||||||
Jet Fuel | 6.3 | 5.8 | 19.3 | 18.6 | |||||||||||
Sub-Total Refined Product Volumes - Plantation | 58.5 | 51.0 | 168.9 | 152.0 | |||||||||||
Parkway (MMBbl) (12) | |||||||||||||||
Gasoline | 3.7 | — | 7.8 | — | |||||||||||
Diesel | 1.1 | 0.2 | 3.1 | 0.2 | |||||||||||
Jet Fuel | — | — | — | — | |||||||||||
Sub-Total Refined Product Volumes - Parkway | 4.8 | 0.2 | 10.9 | 0.2 | |||||||||||
Total (MMBbl) | |||||||||||||||
Gasoline (11) | 118.0 | 109.2 | 333.8 | 312.6 | |||||||||||
Diesel | 39.0 | 36.9 | 113.5 | 106.5 | |||||||||||
Jet Fuel | 28.3 | 27.4 | 85.1 | 82.3 | |||||||||||
Total Refined Product Volumes | 185.3 | 173.5 | 532.4 | 501.4 | |||||||||||
NGLs (13) | 8.5 | 8.9 | 23.5 | 26.7 | |||||||||||
Condensate (14) | 9.8 | 4.4 | 22.2 | 9.0 | |||||||||||
Total Delivery Volumes (MMBbl) | 203.6 | 186.8 | 578.1 | 537.1 | |||||||||||
Ethanol (MMBbl) (15) | 10.8 | 10.2 | 30.9 | 28.6 | |||||||||||
Terminals | |||||||||||||||
Liquids Leasable Capacity (MMBbl) | 75.8 | 62.6 | 75.8 | 62.6 | |||||||||||
Liquids Utilization % | 94.3 | % | 95.4 | % | 94.3 | % | 95.4 | % | |||||||
Bulk Transload Tonnage (MMtons) (16) | 22.5 | 23.7 | 66.5 | 68.1 | |||||||||||
Ethanol (MMBbl) | 18.3 | 15.9 | 53.4 | 46.7 | |||||||||||
Trans Mountain (MMBbls - mainline throughput) | 27.6 | 24.0 | 79.5 | 77.6 |
(1) | Includes Texas Intrastates, Copano South Texas, KMNTP, Monterrey, TransColorado, MEP (100%), KMLA, FEP (100%), TGP, and EPNG pipeline volumes. |
(2) | Volumes for acquired pipelines are included for all periods. |
(3) | Includes Texas Intrastates and KMNTP. |
(4) | Includes Copano Oklahoma, Copano South Texas, Eagle Ford Gathering, Copano North Texas, Altamont, KinderHawk, Camino Real, Endeavor, Bighorn, Webb/Duval Gatherers, Fort Union, EagleHawk, and Red Cedar throughput volumes. Joint Venture throughput reported at KMP share. |
(5) | Includes McElmo Dome and Doe Canyon sales volumes. |
(6) | Represents 100% production from the field. |
(7) | Represents KMP's 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. |
(11) | Gasoline volumes include ethanol pipeline volumes. |
(12) | Plantation and Parkway reported at 100%. |
(13) | Includes Cochin and Cypress (100%). |
(14) | Includes KMCC and Double Eagle (100%). |
(15) | Total ethanol handled including pipeline volumes included in gasoline volumes above. |
(16) | Includes KMP's share of Joint Venture tonnage. |
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 268 | $ | 404 | ||||
Other current assets | 2,316 | 2,264 | ||||||
Property, plant and equipment, net | 29,842 | 27,405 | ||||||
Investments | 2,400 | 2,233 | ||||||
Goodwill, deferred charges and other assets | 10,514 | 10,458 | ||||||
TOTAL ASSETS | $ | 45,340 | $ | 42,764 | ||||
LIABILITIES AND PARTNERS' CAPITAL | ||||||||
Liabilities | ||||||||
Current maturities of long-term debt | $ | 959 | $ | 1,504 | ||||
Other current liabilities | 3,022 | 3,073 | ||||||
Long-term debt | 20,810 | 18,410 | ||||||
Debt fair value adjustments | 1,212 | 1,214 | ||||||
Other | 1,286 | 1,342 | ||||||
Total liabilities | 27,289 | 25,543 | ||||||
Partners' capital | ||||||||
Accumulated other comprehensive (loss) income | (53 | ) | 33 | |||||
Other partners' capital | 17,608 | 16,768 | ||||||
Total KMP partners' capital | 17,555 | 16,801 | ||||||
Noncontrolling interests | 496 | 420 | ||||||
Total partners' capital | 18,051 | 17,221 | ||||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ | 45,340 | $ | 42,764 | ||||
Total Debt, net of cash and cash equivalents, and excluding | ||||||||
the debt fair value adjustments | $ | 21,501 | $ | 19,510 | ||||
Segment earnings before DD&A and certain items | $ | 6,209 | $ | 5,637 | ||||
G&A | (541 | ) | (521 | ) | ||||
Income taxes | 86 | 80 | ||||||
Noncontrolling interests | (37 | ) | (31 | ) | ||||
EBITDA (1)(2) | $ | 5,717 | $ | 5,165 | ||||
Debt to EBITDA | 3.8 | 3.8 |
(1) | EBITDA includes add back of KMP's share of certain equity investees' DD&A and is before certain items. |
(2) | EBITDA is last twelve months |
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