|
Delaware
|
80-0682103
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(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
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Page
Number
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||
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Consolidated Statements of Income - Thre
e and Six Months Ended June 30, 2018 and 2017
|
|
|
Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2018 and 2017
|
|
|
Consolidated Balance Sheets -
June 30, 2018 and December 31, 2017
|
|
|
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2018 and 2017
|
|
|
Consolidated Statements of Stockholders’ Equity -
Six Months Ended June 30, 2018 and 2017
|
|
|
||
|
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
||
|
||
|
Liquidity and Capital Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
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|
|
KINDER MORGAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, Except Per Share Amounts)
(Unaudited)
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Natural gas sales
|
$
|
727
|
|
|
$
|
758
|
|
|
$
|
1,554
|
|
|
$
|
1,567
|
|
Services
|
1,984
|
|
|
1,940
|
|
|
3,951
|
|
|
3,917
|
|
||||
Product sales and other
|
717
|
|
|
670
|
|
|
1,341
|
|
|
1,308
|
|
||||
Total Revenues
|
3,428
|
|
|
3,368
|
|
|
6,846
|
|
|
6,792
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Costs, Expenses and Other
|
|
|
|
|
|
|
|
|
|||||||
Costs of sales
|
1,068
|
|
|
1,070
|
|
|
2,087
|
|
|
2,131
|
|
||||
Operations and maintenance
|
617
|
|
|
556
|
|
|
1,236
|
|
|
1,089
|
|
||||
Depreciation, depletion and amortization
|
571
|
|
|
577
|
|
|
1,141
|
|
|
1,135
|
|
||||
General and administrative
|
164
|
|
|
157
|
|
|
337
|
|
|
341
|
|
||||
Taxes, other than income taxes
|
85
|
|
|
91
|
|
|
173
|
|
|
195
|
|
||||
Loss on impairments and divestitures, net
|
653
|
|
|
—
|
|
|
653
|
|
|
6
|
|
||||
Other income, net
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
||||
Total Operating Costs, Expenses and Other
|
3,156
|
|
|
2,450
|
|
|
5,625
|
|
|
4,897
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Income
|
272
|
|
|
918
|
|
|
1,221
|
|
|
1,895
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|||||||
Earnings from equity investments
|
328
|
|
|
135
|
|
|
548
|
|
|
310
|
|
||||
Loss on impairment of equity investment
|
(270
|
)
|
|
—
|
|
|
(270
|
)
|
|
—
|
|
||||
Amortization of excess cost of equity investments
|
(24
|
)
|
|
(15
|
)
|
|
(56
|
)
|
|
(30
|
)
|
||||
Interest, net
|
(516
|
)
|
|
(463
|
)
|
|
(983
|
)
|
|
(928
|
)
|
||||
Other, net
|
34
|
|
|
24
|
|
|
70
|
|
|
43
|
|
||||
Total Other Expense
|
(448
|
)
|
|
(319
|
)
|
|
(691
|
)
|
|
(605
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
(Loss) Income Before Income Taxes
|
(176
|
)
|
|
599
|
|
|
530
|
|
|
1,290
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income Tax Benefit (Expense)
|
46
|
|
|
(216
|
)
|
|
(118
|
)
|
|
(462
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net (Loss) Income
|
(130
|
)
|
|
383
|
|
|
412
|
|
|
828
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net Income Attributable to Noncontrolling Interests
|
(11
|
)
|
|
(7
|
)
|
|
(29
|
)
|
|
(12
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net (Loss) Income Attributable to Kinder Morgan, Inc.
|
(141
|
)
|
|
376
|
|
|
383
|
|
|
816
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Preferred Stock Dividends
|
(39
|
)
|
|
(39
|
)
|
|
(78
|
)
|
|
(78
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Net (Loss) Income Available to Common Stockholders
|
$
|
(180
|
)
|
|
$
|
337
|
|
|
$
|
305
|
|
|
$
|
738
|
|
|
|
|
|
|
|
|
|
||||||||
Class P Shares
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted (Loss) Earnings Per Common Share
|
$
|
(0.08
|
)
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted Weighted Average Common Shares Outstanding
|
2,204
|
|
|
2,230
|
|
|
2,206
|
|
|
2,230
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends Per Common Share Declared for the Period
|
$
|
0.20
|
|
|
$
|
0.125
|
|
|
$
|
0.40
|
|
|
$
|
0.25
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
$
|
(130
|
)
|
|
$
|
383
|
|
|
$
|
412
|
|
|
$
|
828
|
|
Other comprehensive (loss) income, net of tax
|
|
|
|
|
|
|
|
|
|
||||||
Change in fair value of hedge derivatives (net of tax benefit (expense) of $24, $(63), $13 and $(102), respectively)
|
(80
|
)
|
|
108
|
|
|
(46
|
)
|
|
178
|
|
||||
Reclassification of change in fair value of derivatives to net income (net of tax (expense) benefit of $(24), $43, $(19) and $55, respectively)
|
83
|
|
|
(75
|
)
|
|
67
|
|
|
(96
|
)
|
||||
Foreign currency
translation
adjustments (net of tax benefit (expense) of $9, $(10), $21 and $(17), respectively)
|
(48
|
)
|
|
38
|
|
|
(113
|
)
|
|
51
|
|
||||
Benefit plan adjustments (net of tax expense of
$2, $4, $4
and $9, respectively)
|
6
|
|
|
7
|
|
|
12
|
|
|
13
|
|
||||
Total other comprehensive (loss) income
|
(39
|
)
|
|
78
|
|
|
(80
|
)
|
|
146
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive (loss) income
|
(169
|
)
|
|
461
|
|
|
332
|
|
|
974
|
|
||||
Comprehensive loss (income) attributable to noncontrolling interests
|
5
|
|
|
(26
|
)
|
|
11
|
|
|
(31
|
)
|
||||
Comprehensive (loss) income attributable to Kinder Morgan, Inc.
|
$
|
(164
|
)
|
|
$
|
435
|
|
|
$
|
343
|
|
|
$
|
943
|
|
KINDER MORGAN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Share and Per Share Amounts)
|
|||||||
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
271
|
|
|
$
|
264
|
|
Restricted deposits
|
76
|
|
|
62
|
|
||
Accounts receivable, net
|
1,357
|
|
|
1,448
|
|
||
Fair value of derivative contracts
|
93
|
|
|
114
|
|
||
Inventories
|
420
|
|
|
424
|
|
||
Income tax receivable
|
163
|
|
|
165
|
|
||
Other current assets
|
254
|
|
|
238
|
|
||
Total current assets
|
2,634
|
|
|
2,715
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
39,905
|
|
|
40,155
|
|
||
Investments
|
7,293
|
|
|
7,298
|
|
||
Goodwill
|
22,153
|
|
|
22,162
|
|
||
Other intangibles, net
|
2,989
|
|
|
3,099
|
|
||
Deferred income taxes
|
1,953
|
|
|
2,044
|
|
||
Deferred charges and other assets
|
1,388
|
|
|
1,582
|
|
||
Total Assets
|
$
|
78,315
|
|
|
$
|
79,055
|
|
|
|
|
|
||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
||
Current portion of debt
|
$
|
2,132
|
|
|
$
|
2,828
|
|
Accounts payable
|
1,269
|
|
|
1,340
|
|
||
Accrued interest
|
584
|
|
|
621
|
|
||
Accrued contingencies
|
306
|
|
|
291
|
|
||
Other current liabilities
|
1,088
|
|
|
1,101
|
|
||
Total current liabilities
|
5,379
|
|
|
6,181
|
|
||
Long-term liabilities and deferred credits
|
|
|
|
|
|
||
Long-term debt
|
|
|
|
|
|
||
Outstanding
|
34,640
|
|
|
33,988
|
|
||
Preferred interest in general partner of KMP
|
100
|
|
|
100
|
|
||
Debt fair value adjustments
|
626
|
|
|
927
|
|
||
Total long-term debt
|
35,366
|
|
|
35,015
|
|
||
Other long-term liabilities and deferred credits
|
2,495
|
|
|
2,735
|
|
||
Total long-term liabilities and deferred credits
|
37,861
|
|
|
37,750
|
|
||
Total Liabilities
|
43,240
|
|
|
43,931
|
|
||
Commitments and contingencies (Notes 4 and 11)
|
|
|
|
|
|
||
Redeemable Noncontrolling Interest
|
581
|
|
|
—
|
|
||
Stockholders’ Equity
|
|
|
|
|
|
||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, 9.75% Series A Mandatory Convertible, $1,000 per share liquidation preference, 1,600,000 shares issued and outstanding
|
—
|
|
|
—
|
|
||
Class P shares, $0.01 par value, 4,000,000,000 shares authorized, 2,203,969,844
and 2,217,110,072 shares, respectively, issued and outstanding
|
22
|
|
|
22
|
|
||
Additional paid-in capital
|
41,696
|
|
|
41,909
|
|
||
Retained deficit
|
(7,993
|
)
|
|
(7,754
|
)
|
||
Accumulated other comprehensive loss
|
(690
|
)
|
|
(541
|
)
|
||
Total Kinder Morgan, Inc.’s stockholders’ equity
|
33,035
|
|
|
33,636
|
|
||
Noncontrolling interests
|
1,459
|
|
|
1,488
|
|
||
Total Stockholders’ Equity
|
34,494
|
|
|
35,124
|
|
||
Total Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity
|
$
|
78,315
|
|
|
$
|
79,055
|
|
KINDER MORGAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
|
|||||||
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
412
|
|
|
$
|
828
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|||
Depreciation, depletion and amortization
|
1,141
|
|
|
1,135
|
|
||
Deferred income taxes
|
102
|
|
|
454
|
|
||
Amortization of excess cost of equity investments
|
56
|
|
|
30
|
|
||
Change in fair market value of derivative contracts
|
139
|
|
|
(5
|
)
|
||
Loss on impairments and divestitures, net
|
653
|
|
|
6
|
|
||
Loss on impairment of equity investment
|
270
|
|
|
—
|
|
||
Earnings from equity investments
|
(548
|
)
|
|
(310
|
)
|
||
Distributions from equity investment earnings
|
237
|
|
|
208
|
|
||
Changes in components of working capital
|
|
|
|
||||
Accounts receivable, net
|
116
|
|
|
185
|
|
||
Inventories
|
6
|
|
|
(93
|
)
|
||
Other current assets
|
(21
|
)
|
|
—
|
|
||
Accounts payable
|
(77
|
)
|
|
(59
|
)
|
||
Accrued interest, net of interest rate swaps
|
(26
|
)
|
|
(44
|
)
|
||
Accrued contingencies and other current liabilities
|
(112
|
)
|
|
(96
|
)
|
||
Rate reparations, refunds and other litigation reserve adjustments
|
31
|
|
|
(35
|
)
|
||
Other, net
|
89
|
|
|
(38
|
)
|
||
Net Cash Provided by Operating Activities
|
2,468
|
|
|
2,166
|
|
||
|
|
|
|
||||
Cash Flows From Investing Activities
|
|
|
|
||||
Acquisitions of assets and investments
|
(20
|
)
|
|
(4
|
)
|
||
Capital expenditures
|
(1,473
|
)
|
|
(1,336
|
)
|
||
Proceeds from sales of equity investments
|
33
|
|
|
—
|
|
||
Sales of property, plant and equipment, and other net assets, net of removal costs
|
6
|
|
|
71
|
|
||
Contributions to investments
|
(111
|
)
|
|
(548
|
)
|
||
Distributions from equity investments in excess of cumulative earnings
|
149
|
|
|
214
|
|
||
Loans to related party
|
(16
|
)
|
|
(7
|
)
|
||
Net Cash Used in Investing Activities
|
(1,432
|
)
|
|
(1,610
|
)
|
||
|
|
|
|
||||
Cash Flows From Financing Activities
|
|
|
|
||||
Issuances of debt
|
8,565
|
|
|
4,330
|
|
||
Payments of debt
|
(8,575
|
)
|
|
(6,124
|
)
|
||
Debt issue costs
|
(31
|
)
|
|
(60
|
)
|
||
Cash dividends - common shares
|
(719
|
)
|
|
(560
|
)
|
||
Cash dividends - preferred shares
|
(78
|
)
|
|
(78
|
)
|
||
Repurchases of common shares
|
(250
|
)
|
|
—
|
|
||
Contributions from investment partner
|
97
|
|
|
415
|
|
||
Contributions from noncontrolling interests - net proceeds from KML IPO
|
—
|
|
|
1,247
|
|
||
Contributions from noncontrolling interests - other
|
17
|
|
|
11
|
|
||
Distributions to noncontrolling interests
|
(35
|
)
|
|
(15
|
)
|
||
Other, net
|
(1
|
)
|
|
(1
|
)
|
||
Net Cash Used in Financing Activities
|
(1,010
|
)
|
|
(835
|
)
|
||
|
|
|
|
||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Deposits
|
(5
|
)
|
|
10
|
|
||
|
|
|
|
||||
Net increase (decrease) in Cash, Cash Equivalents and Restricted Deposits
|
21
|
|
|
(269
|
)
|
||
Cash, Cash Equivalents, and Restricted Deposits, beginning of period
|
326
|
|
|
787
|
|
||
Cash, Cash Equivalents, and Restricted Deposits, end of period
|
$
|
347
|
|
|
$
|
518
|
|
|
|||||||
Cash and Cash Equivalents, beginning of period
|
$
|
264
|
|
|
$
|
684
|
|
Restricted Deposits, beginning of period
|
62
|
|
|
103
|
|
||
Cash, Cash Equivalents, and Restricted Deposits, beginning of period
|
326
|
|
|
787
|
|
||
|
|
|
|
||||
Cash and Cash Equivalents, end of period
|
271
|
|
|
452
|
|
||
Restricted Deposits, end of period
|
76
|
|
|
66
|
|
||
Cash, Cash Equivalents, and Restricted Deposits, end of period
|
347
|
|
|
518
|
|
||
|
|
|
|
||||
Net increase (decrease) in Cash, Cash Equivalents and Restricted Deposits
|
$
|
21
|
|
|
$
|
(269
|
)
|
|
|
|
|
KINDER MORGAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In Millions)
(Unaudited)
|
|||||||
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Non-cash Investing and Financing Activities
|
|
|
|
||||
Increase in property, plant and equipment from both accruals and contractor retainage
|
$
|
33
|
|
|
$
|
159
|
|
Supplemental Disclosures of Cash Flow Information
|
|
|
|
||||
Cash paid during the period for interest (net of capitalized interest)
|
$
|
954
|
|
|
$
|
995
|
|
Cash paid during the period for income taxes, net
|
18
|
|
|
1
|
|
|
Common stock
|
|
Preferred stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Issued shares
|
|
Par value
|
|
Issued shares
|
|
Par value
|
|
Additional
paid-in
capital
|
|
Retained
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Stockholders’
equity
attributable
to KMI
|
|
Non-controlling
interests
|
|
Total
|
||||||||||||||||||
Balance at December 31, 2017
|
2,217
|
|
|
$
|
22
|
|
|
2
|
|
|
$
|
—
|
|
|
$
|
41,909
|
|
|
$
|
(7,754
|
)
|
|
$
|
(541
|
)
|
|
$
|
33,636
|
|
|
$
|
1,488
|
|
|
$
|
35,124
|
|
Impact of adoption of ASUs (Note 1)
|
|
|
|
|
|
|
|
|
|
|
175
|
|
|
(109
|
)
|
|
66
|
|
|
|
|
66
|
|
||||||||||||||
Balance at January 1, 2018
|
2,217
|
|
|
22
|
|
|
2
|
|
|
—
|
|
|
41,909
|
|
|
(7,579
|
)
|
|
(650
|
)
|
|
33,702
|
|
|
1,488
|
|
|
35,190
|
|
||||||||
Repurchase of shares
|
(13
|
)
|
|
|
|
|
|
|
|
(250
|
)
|
|
|
|
|
|
(250
|
)
|
|
|
|
(250
|
)
|
||||||||||||||
Restricted shares
|
|
|
|
|
|
|
|
|
37
|
|
|
|
|
|
|
37
|
|
|
|
|
37
|
|
|||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
383
|
|
|
|
|
383
|
|
|
29
|
|
|
412
|
|
||||||||||||||
Distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(44
|
)
|
|
(44
|
)
|
|||||||||||||||
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
26
|
|
|
26
|
|
|||||||||||||||
Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
(78
|
)
|
|
|
|
(78
|
)
|
|
|
|
(78
|
)
|
|||||||||||||||
Common stock dividends
|
|
|
|
|
|
|
|
|
|
|
(719
|
)
|
|
|
|
(719
|
)
|
|
|
|
(719
|
)
|
|||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
(40
|
)
|
|
(40
|
)
|
|
(40
|
)
|
|
(80
|
)
|
||||||||||||||
Balance at June 30, 2018
|
2,204
|
|
|
$
|
22
|
|
|
2
|
|
|
$
|
—
|
|
|
$
|
41,696
|
|
|
$
|
(7,993
|
)
|
|
$
|
(690
|
)
|
|
$
|
33,035
|
|
|
$
|
1,459
|
|
|
$
|
34,494
|
|
|
Common stock
|
|
Preferred stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Issued shares
|
|
Par value
|
|
Issued shares
|
|
Par value
|
|
Additional
paid-in
capital
|
|
Retained
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Stockholders’
equity
attributable
to KMI
|
|
Non-controlling
interests
|
|
Total
|
||||||||||||||||||
Balance at December 31, 2016
|
2,230
|
|
|
$
|
22
|
|
|
2
|
|
|
$
|
—
|
|
|
$
|
41,739
|
|
|
$
|
(6,669
|
)
|
|
$
|
(661
|
)
|
|
$
|
34,431
|
|
|
$
|
371
|
|
|
$
|
34,802
|
|
Restricted shares
|
|
|
|
|
|
|
|
|
37
|
|
|
|
|
|
|
37
|
|
|
|
|
37
|
|
|||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
816
|
|
|
|
|
816
|
|
|
12
|
|
|
828
|
|
||||||||||||||
KML IPO
|
|
|
|
|
|
|
|
|
316
|
|
|
|
|
51
|
|
|
367
|
|
|
683
|
|
|
1,050
|
|
|||||||||||||
Distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|||||||||||||||
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|||||||||||||||
Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
(78
|
)
|
|
|
|
(78
|
)
|
|
|
|
(78
|
)
|
|||||||||||||||
Common stock dividends
|
|
|
|
|
|
|
|
|
|
|
(560
|
)
|
|
|
|
(560
|
)
|
|
|
|
(560
|
)
|
|||||||||||||||
Impact of adoption of ASU 2016-09
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|||||||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
|||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
127
|
|
|
127
|
|
|
19
|
|
|
146
|
|
||||||||||||||
Balance at June 30, 2017
|
2,230
|
|
|
$
|
22
|
|
|
2
|
|
|
$
|
—
|
|
|
$
|
42,092
|
|
|
$
|
(6,482
|
)
|
|
$
|
(483
|
)
|
|
$
|
35,149
|
|
|
$
|
1,065
|
|
|
$
|
36,214
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net (Loss) Income Available to Common Stockholders
|
$
|
(180
|
)
|
|
$
|
337
|
|
|
$
|
305
|
|
|
$
|
738
|
|
Participating securities:
|
|
|
|
|
|
|
|
||||||||
Less: Net Income Allocated to Restricted stock awards(a)
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Net (Loss) Income Allocated to Class P Stockholders
|
$
|
(182
|
)
|
|
$
|
336
|
|
|
$
|
302
|
|
|
$
|
735
|
|
|
|
|
|
|
|
|
|
||||||||
Basic Weighted Average Common Shares Outstanding
|
2,204
|
|
|
2,230
|
|
|
2,206
|
|
|
2,230
|
|
||||
Basic (Loss) Earnings Per Common Share
|
$
|
(0.08
|
)
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
$
|
0.33
|
|
(a)
|
As of
June 30, 2018
, there were approximately
10 million
restricted stock awards outstanding.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Unvested restricted stock awards
|
10
|
|
|
9
|
|
|
10
|
|
|
9
|
|
Warrants to purchase our Class P shares(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
233
|
|
Convertible trust preferred securities
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
Mandatory convertible preferred stock(b)
|
58
|
|
|
58
|
|
|
58
|
|
|
58
|
|
(a)
|
On May 25, 2017, approximately
293 million
unexercised warrants expired without the issuance of Class P common stock. Prior to expiration, each warrant entitled the holder to purchase one share of our common stock for an exercise price of
$40
per share. The potential dilutive effect of the warrants did not consider the assumed proceeds to KMI upon exercise.
|
(b)
|
Until our mandatory convertible preferred shares are converted to common shares, on or before the expected mandatory conversion date of October 26, 2018, the holder of each preferred share participates in our earnings by receiving preferred stock dividends.
|
|
|
Six Months Ended June 30,
|
||||||
Income Statement
|
|
2018
|
|
2017
|
||||
Revenues
|
|
$
|
456
|
|
|
$
|
93
|
|
Costs and expenses
|
|
53
|
|
|
46
|
|
||
Net Income
|
|
$
|
403
|
|
|
$
|
47
|
|
|
|
|
|
|
||||
Our share of net income
|
|
$
|
202
|
|
|
$
|
23
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Current portion of debt
|
|
|
|
||||
Credit facility due November 26, 2019, 3.37% and 2.83%, respectively(a)
|
$
|
350
|
|
|
$
|
125
|
|
Commercial paper notes, 2.59% and 1.95%, respectively(a)
|
140
|
|
|
240
|
|
||
KML 2018 Credit Facility, 2.86%(a)(b)(c)
|
101
|
|
|
—
|
|
||
TMPL Non-recourse Credit Agreement, 1.98%(a)(b)
|
87
|
|
|
—
|
|
||
Current portion of senior notes
|
|
|
|
||||
6.00%, due January 2018
|
—
|
|
|
750
|
|
||
7.00%, due February 2018
|
—
|
|
|
82
|
|
||
5.95%, due February 2018
|
—
|
|
|
975
|
|
||
7.25%, due June 2018
|
—
|
|
|
477
|
|
||
9.00%, due February 2019
|
500
|
|
|
—
|
|
||
2.65%, due February 2019
|
800
|
|
|
—
|
|
||
Trust I preferred securities, 4.75%, due March 2028
|
111
|
|
|
111
|
|
||
Current portion - Other debt
|
43
|
|
|
68
|
|
||
Total current portion of debt
|
2,132
|
|
|
2,828
|
|
||
|
|
|
|
||||
Long-term debt (excluding current portion)
|
|
|
|
||||
Senior notes
|
33,907
|
|
|
33,248
|
|
||
EPC Building, LLC, promissory note, 3.967%, due 2017 through 2035
|
402
|
|
|
409
|
|
||
KMGP, $1,000 Liquidation Value Series A Fixed-to-Floating Rate Term Cumulative Preferred Stock
|
100
|
|
|
100
|
|
||
Trust I preferred securities, 4.75%, due March 2028
|
110
|
|
|
110
|
|
||
Other
|
221
|
|
|
221
|
|
||
Total long-term debt
|
34,740
|
|
|
34,088
|
|
||
Total debt(d)
|
$
|
36,872
|
|
|
$
|
36,916
|
|
(a)
|
Interest rates are weighted average rates.
|
(b)
|
Balances outstanding under the KML 2018 Credit Facility are denominated in C$ and have been converted to U.S. dollars and reported above at the
June 30, 2018
exchange rate of
0.7594
U.S. dollars per C$. See
“—Credit Facilities
” below.
|
(c)
|
Weighted average interest rates are based on interest expense denominated in C$.
|
(d)
|
Excludes our “Debt fair value adjustments” which, as of
June 30, 2018
and
December 31, 2017
, increased our combined debt balances by
$626 million
and
$927 million
, respectively. In addition to all unamortized debt discount/premium amounts, debt issuance costs and purchase accounting on our debt balances, our debt fair value adjustments also include amounts associated with the offsetting entry for hedged debt and any unamortized portion of proceeds received from the early termination of interest rate swap agreements.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Per common share cash dividend declared for the period
|
$
|
0.20
|
|
|
$
|
0.125
|
|
|
$
|
0.40
|
|
|
$
|
0.25
|
|
Per common share cash dividend paid in the period
|
$
|
0.20
|
|
|
$
|
0.125
|
|
|
$
|
0.325
|
|
|
$
|
0.25
|
|
|
Net open position long/(short)
|
|||
Derivatives designated as hedging contracts
|
|
|
|
|
Crude oil fixed price
|
(12.9
|
)
|
|
MMBbl
|
Crude oil basis
|
(7.9
|
)
|
|
MMBbl
|
Natural gas fixed price
|
(43.3
|
)
|
|
Bcf
|
Natural gas basis
|
(35.1
|
)
|
|
Bcf
|
Derivatives not designated as hedging contracts
|
|
|
|
|
Crude oil fixed price
|
(10.3
|
)
|
|
MMBbl
|
Natural gas fixed price
|
(1.9
|
)
|
|
Bcf
|
Natural gas basis
|
(13.2
|
)
|
|
Bcf
|
NGL fixed price
|
(3.9
|
)
|
|
MMBbl
|
Fair Value of Derivative Contracts
|
||||||||||||||||||
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
|
|
|
|
June 30,
2018 |
|
December 31,
2017 |
|
June 30,
2018 |
|
December 31,
2017 |
||||||||
|
|
Location
|
|
Fair value
|
|
Fair value
|
||||||||||||
Derivatives designated as hedging contracts
|
|
|
|
|
|
|
|
|
|
|
||||||||
Energy commodity derivative contracts
|
|
Fair value of derivative contracts/(Other current liabilities)
|
|
$
|
71
|
|
|
$
|
65
|
|
|
$
|
(91
|
)
|
|
$
|
(53
|
)
|
|
|
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
|
|
—
|
|
|
14
|
|
|
(44
|
)
|
|
(24
|
)
|
||||
Subtotal
|
|
|
|
71
|
|
|
79
|
|
|
(135
|
)
|
|
(77
|
)
|
||||
Interest rate swap agreements
|
|
Fair value of derivative contracts/(Other current liabilities)
|
|
19
|
|
|
41
|
|
|
(27
|
)
|
|
(3
|
)
|
||||
|
|
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
|
|
89
|
|
|
164
|
|
|
(195
|
)
|
|
(62
|
)
|
||||
Subtotal
|
|
|
|
108
|
|
|
205
|
|
|
(222
|
)
|
|
(65
|
)
|
||||
Cross-currency swap agreements
|
|
Fair value of derivative contracts/(Other current liabilities)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(6
|
)
|
||||
|
|
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
|
|
169
|
|
|
166
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
|
|
|
169
|
|
|
166
|
|
|
(20
|
)
|
|
(6
|
)
|
||||
Total
|
|
|
|
348
|
|
|
450
|
|
|
(377
|
)
|
|
(148
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Energy commodity derivative contracts
|
|
Fair value of derivative contracts/(Other current liabilities)
|
|
3
|
|
|
8
|
|
|
(64
|
)
|
|
(22
|
)
|
||||
|
|
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
|
|
1
|
|
|
—
|
|
|
(39
|
)
|
|
(2
|
)
|
||||
Total
|
|
|
|
4
|
|
|
8
|
|
|
(103
|
)
|
|
(24
|
)
|
||||
Total derivatives
|
|
|
|
$
|
352
|
|
|
$
|
458
|
|
|
$
|
(480
|
)
|
|
$
|
(172
|
)
|
Derivatives in fair value hedging relationships
|
|
Location
|
|
Gain/(loss) recognized in income
on derivatives and related hedged item
|
||||||||||||||
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
Interest, net
|
|
$
|
(81
|
)
|
|
$
|
46
|
|
|
$
|
(254
|
)
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Hedged fixed rate debt
|
|
Interest, net
|
|
$
|
77
|
|
|
$
|
(47
|
)
|
|
$
|
245
|
|
|
$
|
(11
|
)
|
Derivatives in cash flow hedging relationships
|
|
Gain/(loss)
recognized in OCI on derivative (effective portion)(a)
|
|
Location
|
|
Gain/(loss) reclassified from Accumulated OCI
into income (effective portion)(b)
|
|
Location
|
|
Gain/(loss)
recognized in income
on derivative
(ineffective portion
and amount
excluded from
effectiveness testing)
|
||||||||||||||||||
|
|
Three Months Ended June 30,
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
||||||||||||
Energy commodity derivative contracts
|
|
$
|
(23
|
)
|
|
$
|
52
|
|
|
Revenues—Natural
gas sales
|
|
$
|
(5
|
)
|
|
$
|
(1
|
)
|
|
Revenues—Natural
gas sales
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Revenues—Product
sales and other
|
|
(13
|
)
|
|
14
|
|
|
Revenues—Product
sales and other
|
|
(56
|
)
|
|
5
|
|
||||||||
|
|
|
|
|
|
Costs of sales
|
|
—
|
|
|
1
|
|
|
Costs of sales
|
|
—
|
|
|
—
|
|
||||||||
Interest rate swap
agreements(c) |
|
1
|
|
|
(1
|
)
|
|
Earnings from equity investments
|
|
(3
|
)
|
|
(1
|
)
|
|
Earnings from equity investments
|
|
—
|
|
|
—
|
|
||||||
Cross-currency swap
|
|
(58
|
)
|
|
57
|
|
|
Other, net
|
|
(62
|
)
|
|
62
|
|
|
Other, net
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
(80
|
)
|
|
$
|
108
|
|
|
Total
|
|
$
|
(83
|
)
|
|
$
|
75
|
|
|
Total
|
|
$
|
(56
|
)
|
|
$
|
5
|
|
Derivatives in cash flow hedging relationships
|
|
Gain/(loss)
recognized in OCI on derivative (effective portion)(a)
|
|
Location
|
|
Gain/(loss) reclassified from Accumulated OCI
into income (effective portion)(b)
|
|
Location
|
|
Gain/(loss)
recognized in income
on derivative
(ineffective portion
and amount
excluded from
effectiveness testing)
|
||||||||||||||||||
|
|
Six Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
||||||||||||
Energy commodity derivative contracts
|
|
$
|
(40
|
)
|
|
$
|
120
|
|
|
Revenues—Natural
gas sales
|
|
$
|
(5
|
)
|
|
$
|
1
|
|
|
Revenues—Natural
gas sales
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Revenues—Product
sales and other
|
|
(27
|
)
|
|
20
|
|
|
Revenues—Product
sales and other
|
|
(85
|
)
|
|
8
|
|
||||||||
|
|
|
|
|
|
Costs of sales
|
|
—
|
|
|
4
|
|
|
Costs of sales
|
|
—
|
|
|
—
|
|
||||||||
Interest rate swap
agreements(c) |
|
2
|
|
|
(1
|
)
|
|
Earnings from equity investments
|
|
(4
|
)
|
|
(1
|
)
|
|
Earnings from equity investments
|
|
—
|
|
|
—
|
|
||||||
Cross-currency swap
|
|
(8
|
)
|
|
59
|
|
|
Other, net
|
|
(31
|
)
|
|
72
|
|
|
Other, net
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
(46
|
)
|
|
$
|
178
|
|
|
Total
|
|
$
|
(67
|
)
|
|
$
|
96
|
|
|
Total
|
|
$
|
(85
|
)
|
|
$
|
8
|
|
(a)
|
We do not expect to reclassify any gain or loss associated with cash flow hedge price risk management activities included in our accumulated other comprehensive loss balances as of
June 30, 2018
into earnings during the next twelve months (when the associated forecasted transactions are also expected to occur); however, actual amounts reclassified into earnings could vary materially as a result of changes in market prices.
|
(b)
|
During the three and six months ended June 30, 2018, we recognized a
$3 million
loss as a result of our equity investment’s forecasted transactions being probable of not occurring. All other amounts reclassified were the result of the hedged forecasted transactions actually affecting earnings (i.e., when the forecasted sales and purchases actually occurred).
|
(c)
|
Amounts represent our share of an equity investee’s accumulated other comprehensive loss.
|
Derivatives not designated as accounting hedges
|
|
Location
|
|
Gain/(loss) recognized in income on derivatives
|
||||||||||||||
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Energy commodity derivative contracts
|
|
Revenues—Natural gas sales
|
|
$
|
(1
|
)
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
11
|
|
|
|
Revenues—Product sales and other
|
|
(45
|
)
|
|
7
|
|
|
(46
|
)
|
|
19
|
|
||||
|
|
Costs of sales
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total(a)
|
|
|
|
$
|
(45
|
)
|
|
$
|
12
|
|
|
$
|
(43
|
)
|
|
$
|
30
|
|
|
Net unrealized
gains/(losses)
on cash flow
hedge derivatives
|
|
Foreign
currency
translation
adjustments
|
|
Pension and
other
postretirement
liability adjustments
|
|
Total
accumulated other
comprehensive loss
|
||||||||
Balance as of December 31, 2017
|
$
|
(27
|
)
|
|
$
|
(189
|
)
|
|
$
|
(325
|
)
|
|
$
|
(541
|
)
|
Other comprehensive gain (loss) before reclassifications
|
(46
|
)
|
|
(73
|
)
|
|
12
|
|
|
(107
|
)
|
||||
Gains reclassified from accumulated other comprehensive loss
|
67
|
|
|
—
|
|
|
—
|
|
|
67
|
|
||||
Impact of adoption of ASU 2018-02 (Note 1)
|
(4
|
)
|
|
(36
|
)
|
|
(69
|
)
|
|
(109
|
)
|
||||
Net current-period other comprehensive income (loss)
|
17
|
|
|
(109
|
)
|
|
(57
|
)
|
|
(149
|
)
|
||||
Balance as of June 30, 2018
|
$
|
(10
|
)
|
|
$
|
(298
|
)
|
|
$
|
(382
|
)
|
|
$
|
(690
|
)
|
|
Net unrealized
gains/(losses)
on cash flow
hedge derivatives
|
|
Foreign
currency
translation
adjustments
|
|
Pension and
other
postretirement
liability adjustments
|
|
Total
accumulated other
comprehensive loss
|
||||||||
Balance as of December 31, 2016
|
$
|
(1
|
)
|
|
$
|
(288
|
)
|
|
$
|
(372
|
)
|
|
$
|
(661
|
)
|
Other comprehensive gain before reclassifications
|
178
|
|
|
32
|
|
|
13
|
|
|
223
|
|
||||
Gains reclassified from accumulated other comprehensive loss
|
(96
|
)
|
|
—
|
|
|
—
|
|
|
(96
|
)
|
||||
KML IPO
|
—
|
|
|
44
|
|
|
7
|
|
|
51
|
|
||||
Net current-period other comprehensive income
|
82
|
|
|
76
|
|
|
20
|
|
|
178
|
|
||||
Balance as of June 30, 2017
|
$
|
81
|
|
|
$
|
(212
|
)
|
|
$
|
(352
|
)
|
|
$
|
(483
|
)
|
•
|
Level 1 Inputs—quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date;
|
•
|
Level 2 Inputs—inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability; and
|
•
|
Level 3 Inputs—unobservable inputs for the asset or liability. These unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances (which might include the reporting entity’s own data).
|
|
Balance sheet asset
fair value measurements by level
|
|
|
|
Net amount
|
||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Gross amount
|
|
Contracts available for netting
|
|
Cash collateral held(b)
|
||||||||||||||||
As of June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Energy commodity derivative contracts(a)
|
$
|
2
|
|
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
(30
|
)
|
|
$
|
—
|
|
|
$
|
45
|
|
Interest rate swap agreements
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
|
(10
|
)
|
|
—
|
|
|
98
|
|
|||||||
Cross-currency swap agreements
|
—
|
|
|
169
|
|
|
—
|
|
|
169
|
|
|
(20
|
)
|
|
—
|
|
|
149
|
|
|||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Energy commodity derivative contracts(a)
|
$
|
17
|
|
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
87
|
|
|
$
|
(42
|
)
|
|
$
|
(12
|
)
|
|
$
|
33
|
|
Interest rate swap agreements
|
—
|
|
|
205
|
|
|
—
|
|
|
205
|
|
|
(15
|
)
|
|
—
|
|
|
190
|
|
|||||||
Cross-currency swap agreements
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
160
|
|
|
Balance sheet liability
fair value measurements by level
|
|
|
|
Net amount
|
||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Gross amount
|
|
Contracts available for netting
|
|
Collateral posted(b)
|
||||||||||||||||
As of June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Energy commodity derivative contracts(a)
|
$
|
(6
|
)
|
|
$
|
(232
|
)
|
|
$
|
—
|
|
|
$
|
(238
|
)
|
|
$
|
30
|
|
|
$
|
13
|
|
|
$
|
(195
|
)
|
Interest rate swap agreements
|
—
|
|
|
(222
|
)
|
|
—
|
|
|
(222
|
)
|
|
10
|
|
|
—
|
|
|
(212
|
)
|
|||||||
Cross-currency swap agreements
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|
20
|
|
|
—
|
|
|
—
|
|
|||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Energy commodity derivative contracts(a)
|
$
|
(3
|
)
|
|
$
|
(98
|
)
|
|
$
|
—
|
|
|
$
|
(101
|
)
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
(59
|
)
|
Interest rate swap agreements
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
(65
|
)
|
|
15
|
|
|
—
|
|
|
(50
|
)
|
|||||||
Cross-currency swap agreements
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
(a)
|
Level 1 consists primarily of New York Mercantile Exchange natural gas futures. Level 2 consists primarily of over-the-counter West Texas Intermediate swaps and options and NGL swaps.
|
(b)
|
Any cash collateral paid or received is reflected in this table, but only to the extent that it represents variation margins. Any amount associated with derivative prepayments or initial margins that are not influenced by the derivative asset or liability amounts or those that are determined solely on their volumetric notional amounts are excluded from this table.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying
value
|
|
Estimated
fair value
|
|
Carrying
value
|
|
Estimated
fair value
|
||||||||
Total debt
|
$
|
37,498
|
|
|
$
|
38,344
|
|
|
$
|
37,843
|
|
|
$
|
40,050
|
|
|
Three Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||
Line Item
|
As Reported
|
|
Amounts Without Adoption of Topic 606
|
|
Effect of Change Increase/(Decrease)
|
|
As Reported
|
|
Amounts Without Adoption of Topic 606
|
|
Effect of Change Increase/(Decrease)
|
||||||||||||
Consolidated Statement of Income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural gas sales
|
$
|
727
|
|
|
$
|
737
|
|
|
$
|
(10
|
)
|
|
$
|
1,554
|
|
|
$
|
1,578
|
|
|
$
|
(24
|
)
|
Services
|
1,984
|
|
|
2,036
|
|
|
(52
|
)
|
|
3,951
|
|
|
4,048
|
|
|
(97
|
)
|
||||||
Product sales and other
|
717
|
|
|
789
|
|
|
(72
|
)
|
|
1,341
|
|
|
1,500
|
|
|
(159
|
)
|
||||||
Total Revenues
|
3,428
|
|
|
3,562
|
|
|
(134
|
)
|
|
6,846
|
|
|
7,126
|
|
|
(280
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales
|
1,068
|
|
|
1,202
|
|
|
(134
|
)
|
|
2,087
|
|
|
2,367
|
|
|
(280
|
)
|
||||||
Operating Income
|
272
|
|
|
272
|
|
|
—
|
|
|
1,221
|
|
|
1,221
|
|
|
—
|
|
•
|
Contracts without Makeup Rights.
If contractually the customer cannot make up deficiency quantities in future periods, our performance obligation is satisfied, and revenue associated with any deficiency quantities is generally recognized as each service period expires. Because a service period may exceed a reporting period, we determine at inception of the contract and at the beginning of each subsequent reporting period if we expect the customer to take the minimum volume associated with the service period. If we expect the customer to make up all deficiencies in the specified service period (i.e., we expect the customer to take the minimum service quantities), the minimum volume provision is deemed not substantive and we will recognize the transaction price as revenue in the specified service period as the promised units of service are transferred to the customer. Alternatively, if we expect that there will be any deficiency quantities that the customer cannot or will not make up in the specified service period (referred to as “breakage”), we will recognize the estimated breakage amount (subject to the constraint on variable consideration) as revenue ratably over such service period in proportion to the revenue that we will recognize for actual units of service transferred to the customer in the service period. For certain take-or-pay contracts where we make the service, or a part of the service (e.g., reservation), continuously available over the service period, we typically recognize the take-or-pay amount as revenue ratably over such period based on the passage of time.
|
•
|
Contracts with Makeup Rights.
If contractually the customer can acquire the promised service in a future period and make up the deficiency quantities in such future period (the “deficiency makeup period”), we have a performance
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||||||||||
|
|
Natural Gas Pipelines
|
|
CO
2
|
|
Terminals
|
|
Products Pipelines
|
|
Kinder Morgan Canada
|
|
Corporate and Eliminations
|
|
Total
|
||||||||||||||
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Firm services(a)
|
|
$
|
784
|
|
|
$
|
—
|
|
|
$
|
261
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
1,188
|
|
Fee-based services
|
|
202
|
|
|
16
|
|
|
152
|
|
|
198
|
|
|
62
|
|
|
—
|
|
|
630
|
|
|||||||
Total services revenues
|
|
986
|
|
|
16
|
|
|
413
|
|
|
345
|
|
|
62
|
|
|
(4
|
)
|
|
1,818
|
|
|||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Natural gas sales
|
|
735
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
734
|
|
|||||||
Product sales
|
|
381
|
|
|
318
|
|
|
4
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
763
|
|
|||||||
Other sales
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Total sales revenues
|
|
1,118
|
|
|
319
|
|
|
4
|
|
|
60
|
|
|
—
|
|
|
(2
|
)
|
|
1,499
|
|
|||||||
Total revenues from contracts with customers
|
|
2,104
|
|
|
335
|
|
|
417
|
|
|
405
|
|
|
62
|
|
|
(6
|
)
|
|
3,317
|
|
|||||||
Other revenues(b)
|
|
62
|
|
|
(85
|
)
|
|
96
|
|
|
37
|
|
|
3
|
|
|
(2
|
)
|
|
111
|
|
|||||||
Total revenues
|
|
$
|
2,166
|
|
|
$
|
250
|
|
|
$
|
513
|
|
|
$
|
442
|
|
|
$
|
65
|
|
|
$
|
(8
|
)
|
|
$
|
3,428
|
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||||||
|
|
Natural Gas Pipelines
|
|
CO
2
|
|
Terminals
|
|
Products Pipelines
|
|
Kinder Morgan Canada
|
|
Corporate and Eliminations
|
|
Total
|
||||||||||||||
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Firm services(a)
|
|
$
|
1,587
|
|
|
$
|
1
|
|
|
$
|
515
|
|
|
$
|
285
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
2,380
|
|
Fee-based services
|
|
405
|
|
|
33
|
|
|
296
|
|
|
381
|
|
|
126
|
|
|
1
|
|
|
1,242
|
|
|||||||
Total services revenues
|
|
1,992
|
|
|
34
|
|
|
811
|
|
|
666
|
|
|
126
|
|
|
(7
|
)
|
|
3,622
|
|
|||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Natural gas sales
|
|
1,561
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
1,558
|
|
|||||||
Product sales
|
|
638
|
|
|
635
|
|
|
6
|
|
|
108
|
|
|
—
|
|
|
—
|
|
|
1,387
|
|
|||||||
Other sales
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||||
Total sales revenues
|
|
2,203
|
|
|
636
|
|
|
6
|
|
|
108
|
|
|
—
|
|
|
(4
|
)
|
|
2,949
|
|
|||||||
Total revenues from contracts with customers
|
|
4,195
|
|
|
670
|
|
|
817
|
|
|
774
|
|
|
126
|
|
|
(11
|
)
|
|
6,571
|
|
|||||||
Other revenues(b)
|
|
137
|
|
|
(116
|
)
|
|
189
|
|
|
67
|
|
|
—
|
|
|
(2
|
)
|
|
275
|
|
|||||||
Total revenues
|
|
$
|
4,332
|
|
|
$
|
554
|
|
|
$
|
1,006
|
|
|
$
|
841
|
|
|
$
|
126
|
|
|
$
|
(13
|
)
|
|
$
|
6,846
|
|
(a)
|
Includes non-cancellable firm service customer contracts with take-or-pay or minimum volume commitment elements, including those contracts where both the price and quantity amount are fixed. Excludes service contracts with indexed-based pricing, which along with revenues from other customer service contracts are reported as Fee-based services.
|
(b)
|
Amounts recognized as revenue under guidance prescribed in Topics of the Accounting Standards Codification other than in Topic 606 and primarily include leases and derivatives. See Note 6 for additional information related to our derivative contracts.
|
|
|
Six Months Ended
June 30, 2018
|
||
Contract Assets(a)
|
|
|
||
Balance at December 31, 2017
|
|
$
|
32
|
|
Additions
|
|
55
|
|
|
Transfer to Accounts receivable
|
|
(35
|
)
|
|
Balance at June 30, 2018
|
|
$
|
52
|
|
Contract Liabilities(b)
|
|
|
||
Balance at December 31, 2017
|
|
$
|
206
|
|
Additions
|
|
191
|
|
|
Transfer to Revenues
|
|
(153
|
)
|
|
Other(c)
|
|
(4
|
)
|
|
Balance at June 30, 2018
|
|
$
|
240
|
|
(a)
|
Includes current balances of
$44 million
and
$25 million
reported within “Other current assets” in our accompanying consolidated balance sheets at
June 30, 2018
and
December 31, 2017
, respectively, and includes non-current balances of
$8 million
and
$7 million
reported within “Deferred charges and other assets” in our accompanying consolidated balance sheets at
June 30, 2018
and
December 31, 2017
, respectively.
|
(b)
|
Includes current balances of
$77 million
and
$79 million
reported within “Other current liabilities” in our accompanying consolidated balance sheets at
June 30, 2018
and
December 31, 2017
, respectively, and includes non-current balances of
$163 million
and
$127 million
reported within “Other long-term liabilities and deferred credits” in our accompanying consolidated balance sheets at
June 30, 2018
and
December 31, 2017
, respectively.
|
(c)
|
Includes
2018
foreign currency translation adjustments associated with the balances at
December 31, 2017
.
|
Year
|
|
Estimated Revenue
|
||
Six months ended December 31, 2018
|
|
$
|
2,467
|
|
2019
|
|
4,383
|
|
|
2020
|
|
3,652
|
|
|
2021
|
|
3,141
|
|
|
2022
|
|
2,671
|
|
|
Thereafter
|
|
14,292
|
|
|
Total
|
|
$
|
30,606
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Natural Gas Pipelines
|
|
|
|
|
|
|
|
||||||||
Revenues from external customers
|
$
|
2,163
|
|
|
$
|
2,093
|
|
|
$
|
4,327
|
|
|
$
|
4,261
|
|
Intersegment revenues
|
3
|
|
|
2
|
|
|
5
|
|
|
5
|
|
||||
CO
2
|
250
|
|
|
307
|
|
|
554
|
|
|
610
|
|
||||
Terminals
|
|
|
|
|
|
|
|
||||||||
Revenues from external customers
|
512
|
|
|
486
|
|
|
1,005
|
|
|
973
|
|
||||
Intersegment revenues
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Products Pipelines
|
|
|
|
|
|
|
|
||||||||
Revenues from external customers
|
438
|
|
|
413
|
|
|
834
|
|
|
811
|
|
||||
Intersegment revenues
|
4
|
|
|
5
|
|
|
7
|
|
|
9
|
|
||||
Kinder Morgan Canada
|
65
|
|
|
60
|
|
|
126
|
|
|
119
|
|
||||
Corporate and intersegment eliminations(a)
|
(8
|
)
|
|
1
|
|
|
(13
|
)
|
|
3
|
|
||||
Total consolidated revenues
|
$
|
3,428
|
|
|
$
|
3,368
|
|
|
$
|
6,846
|
|
|
$
|
6,792
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment EBDA(b)
|
|
|
|
|
|
|
|
||||||||
Natural Gas Pipelines
|
$
|
313
|
|
|
$
|
907
|
|
|
$
|
1,449
|
|
|
$
|
1,962
|
|
CO
2
|
157
|
|
|
221
|
|
|
356
|
|
|
439
|
|
||||
Terminals
|
274
|
|
|
304
|
|
|
569
|
|
|
611
|
|
||||
Products Pipelines
|
319
|
|
|
324
|
|
|
578
|
|
|
611
|
|
||||
Kinder Morgan Canada
|
46
|
|
|
43
|
|
|
92
|
|
|
86
|
|
||||
Total Segment EBDA
|
1,109
|
|
|
1,799
|
|
|
3,044
|
|
|
3,709
|
|
||||
DD&A
|
(571
|
)
|
|
(577
|
)
|
|
(1,141
|
)
|
|
(1,135
|
)
|
||||
Amortization of excess cost of equity investments
|
(24
|
)
|
|
(15
|
)
|
|
(56
|
)
|
|
(30
|
)
|
||||
General and administrative and corporate charges
|
(174
|
)
|
|
(145
|
)
|
|
(334
|
)
|
|
(326
|
)
|
||||
Interest, net
|
(516
|
)
|
|
(463
|
)
|
|
(983
|
)
|
|
(928
|
)
|
||||
Income tax benefit (expense)
|
46
|
|
|
(216
|
)
|
|
(118
|
)
|
|
(462
|
)
|
||||
Total consolidated net (loss) income
|
$
|
(130
|
)
|
|
$
|
383
|
|
|
$
|
412
|
|
|
$
|
828
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
||||
Natural Gas Pipelines
|
$
|
50,659
|
|
|
$
|
51,173
|
|
CO
2
|
3,931
|
|
|
3,946
|
|
||
Terminals
|
9,754
|
|
|
9,935
|
|
||
Products Pipelines
|
8,511
|
|
|
8,539
|
|
||
Kinder Morgan Canada
|
2,267
|
|
|
2,080
|
|
||
Corporate assets(c)
|
3,193
|
|
|
3,382
|
|
||
Total consolidated assets
|
$
|
78,315
|
|
|
$
|
79,055
|
|
(a)
|
Three and six month 2017 amounts include a management fee for services we perform as operator of an equity investee of
$9 million
and
$18 million
, respectively.
|
(b)
|
Includes revenues, earnings from equity investments, other, net, less operating expenses, loss on impairments and divestitures, net, loss on impairment of equity investment and other (income) expense, net.
|
(c)
|
Includes cash and cash equivalents, margin and restricted deposits, certain prepaid assets and deferred charges, including income tax related assets, risk management assets related to debt fair value adjustments, corporate headquarters in Houston, Texas and miscellaneous corporate assets (such as information technology, telecommunications equipment and legacy activity) not allocated to our reportable segments.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Income tax (benefit) expense
|
$
|
(46
|
)
|
|
$
|
216
|
|
|
$
|
118
|
|
|
$
|
462
|
|
Effective tax rate
|
26.1
|
%
|
|
36.1
|
%
|
|
22.3
|
%
|
|
35.8
|
%
|
Condensed Consolidating Statements of Income and Comprehensive Income
for the Three Months Ended June 30, 2018
(In Millions)
(Unaudited)
|
||||||||||||||||||||||||
|
|
Parent
Issuer and Guarantor |
|
Subsidiary
Issuer and Guarantor - KMP |
|
Subsidiary
Guarantors |
|
Subsidiary
Non-Guarantors |
|
Consolidating Adjustments
|
|
Consolidated KMI
|
||||||||||||
Total Revenues
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,047
|
|
|
$
|
399
|
|
|
$
|
(18
|
)
|
|
$
|
3,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Costs, Expenses and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Costs of sales
|
|
—
|
|
|
—
|
|
|
1,022
|
|
|
52
|
|
|
(6
|
)
|
|
1,068
|
|
||||||
Depreciation, depletion and amortization
|
|
4
|
|
|
—
|
|
|
486
|
|
|
81
|
|
|
—
|
|
|
571
|
|
||||||
Other operating expense
|
|
6
|
|
|
—
|
|
|
1,377
|
|
|
146
|
|
|
(12
|
)
|
|
1,517
|
|
||||||
Total Operating Costs, Expenses and Other
|
|
10
|
|
|
—
|
|
|
2,885
|
|
|
279
|
|
|
(18
|
)
|
|
3,156
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating (Loss) Income
|
|
(10
|
)
|
|
—
|
|
|
162
|
|
|
120
|
|
|
—
|
|
|
272
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Losses) earnings from consolidated subsidiaries
|
|
(2
|
)
|
|
(55
|
)
|
|
96
|
|
|
4
|
|
|
(43
|
)
|
|
—
|
|
||||||
Earnings from equity investments
|
|
—
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
58
|
|
||||||
Interest, net
|
|
(193
|
)
|
|
(2
|
)
|
|
(273
|
)
|
|
(48
|
)
|
|
—
|
|
|
(516
|
)
|
||||||
Amortization of excess cost of equity investments and other, net
|
|
7
|
|
|
—
|
|
|
(5
|
)
|
|
8
|
|
|
—
|
|
|
10
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Loss) Income Before Income Taxes
|
|
(198
|
)
|
|
(57
|
)
|
|
38
|
|
|
84
|
|
|
(43
|
)
|
|
(176
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Tax Benefit (Expense)
|
|
57
|
|
|
(2
|
)
|
|
(19
|
)
|
|
10
|
|
|
—
|
|
|
46
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (Loss) Income
|
|
(141
|
)
|
|
(59
|
)
|
|
19
|
|
|
94
|
|
|
(43
|
)
|
|
(130
|
)
|
||||||
Net Income Attributable to Noncontrolling Interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (Loss) Income Attributable to Controlling Interests
|
|
(141
|
)
|
|
(59
|
)
|
|
19
|
|
|
94
|
|
|
(54
|
)
|
|
(141
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred Stock Dividends
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
||||||
Net (Loss) Income Available to Common Stockholders
|
|
$
|
(180
|
)
|
|
$
|
(59
|
)
|
|
$
|
19
|
|
|
$
|
94
|
|
|
$
|
(54
|
)
|
|
$
|
(180
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (Loss) Income
|
|
$
|
(141
|
)
|
|
$
|
(59
|
)
|
|
$
|
19
|
|
|
$
|
94
|
|
|
$
|
(43
|
)
|
|
$
|
(130
|
)
|
Total other comprehensive loss
|
|
(23
|
)
|
|
(42
|
)
|
|
(44
|
)
|
|
(58
|
)
|
|
128
|
|
|
(39
|
)
|
||||||
Comprehensive (loss) income
|
|
(164
|
)
|
|
(101
|
)
|
|
(25
|
)
|
|
36
|
|
|
85
|
|
|
(169
|
)
|
||||||
Comprehensive loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||
Comprehensive (loss) income attributable to controlling interests
|
|
$
|
(164
|
)
|
|
$
|
(101
|
)
|
|
$
|
(25
|
)
|
|
$
|
36
|
|
|
$
|
90
|
|
|
$
|
(164
|
)
|
Condensed Consolidating Statements of Income and Comprehensive Income
for the Three Months Ended June 30, 2017
(In Millions)
(Unaudited)
|
||||||||||||||||||||||||
|
|
Parent
Issuer and Guarantor |
|
Subsidiary
Issuer and Guarantor - KMP |
|
Subsidiary
Guarantors |
|
Subsidiary
Non-Guarantors |
|
Consolidating Adjustments
|
|
Consolidated KMI
|
||||||||||||
Total Revenues
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
3,002
|
|
|
$
|
402
|
|
|
$
|
(45
|
)
|
|
$
|
3,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Costs, Expenses and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Costs of sales
|
|
—
|
|
|
—
|
|
|
1,021
|
|
|
83
|
|
|
(34
|
)
|
|
1,070
|
|
||||||
Depreciation, depletion and amortization
|
|
4
|
|
|
—
|
|
|
488
|
|
|
85
|
|
|
—
|
|
|
577
|
|
||||||
Other operating expenses
|
|
10
|
|
|
—
|
|
|
711
|
|
|
93
|
|
|
(11
|
)
|
|
803
|
|
||||||
Total Operating Costs, Expenses and Other
|
|
14
|
|
|
—
|
|
|
2,220
|
|
|
261
|
|
|
(45
|
)
|
|
2,450
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating (Loss) Income
|
|
(5
|
)
|
|
—
|
|
|
782
|
|
|
141
|
|
|
—
|
|
|
918
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings from consolidated subsidiaries
|
|
747
|
|
|
734
|
|
|
110
|
|
|
17
|
|
|
(1,608
|
)
|
|
—
|
|
||||||
Earnings from equity investments
|
|
—
|
|
|
—
|
|
|
135
|
|
|
—
|
|
|
—
|
|
|
135
|
|
||||||
Interest, net
|
|
(177
|
)
|
|
4
|
|
|
(273
|
)
|
|
(17
|
)
|
|
—
|
|
|
(463
|
)
|
||||||
Amortization of excess cost of equity investments and other, net
|
|
—
|
|
|
—
|
|
|
6
|
|
|
3
|
|
|
—
|
|
|
9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Before Income Taxes
|
|
565
|
|
|
738
|
|
|
760
|
|
|
144
|
|
|
(1,608
|
)
|
|
599
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Tax Expense
|
|
(189
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|
(8
|
)
|
|
—
|
|
|
(216
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
|
376
|
|
|
737
|
|
|
742
|
|
|
136
|
|
|
(1,608
|
)
|
|
383
|
|
||||||
Net Income Attributable to Noncontrolling Interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income Attributable to Controlling Interests
|
|
376
|
|
|
737
|
|
|
742
|
|
|
136
|
|
|
(1,615
|
)
|
|
376
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred Stock Dividends
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
||||||
Net Income Available to Common Stockholders
|
|
337
|
|
|
737
|
|
|
742
|
|
|
136
|
|
|
(1,615
|
)
|
|
337
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
|
$
|
376
|
|
|
$
|
737
|
|
|
$
|
742
|
|
|
$
|
136
|
|
|
$
|
(1,608
|
)
|
|
$
|
383
|
|
Total other comprehensive income
|
|
59
|
|
|
168
|
|
|
194
|
|
|
52
|
|
|
(395
|
)
|
|
78
|
|
||||||
Comprehensive income
|
|
435
|
|
|
905
|
|
|
936
|
|
|
188
|
|
|
(2,003
|
)
|
|
461
|
|
||||||
Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
||||||
Comprehensive income attributable to controlling interests
|
|
$
|
435
|
|
|
$
|
905
|
|
|
$
|
936
|
|
|
$
|
188
|
|
|
$
|
(2,029
|
)
|
|
$
|
435
|
|
Condensed Consolidating Statements of Income and Comprehensive Income
for the Six Months Ended June 30, 2018
(In Millions)
(Unaudited)
|
||||||||||||||||||||||||
|
|
Parent
Issuer and Guarantor |
|
Subsidiary
Issuer and Guarantor - KMP |
|
Subsidiary
Guarantors |
|
Subsidiary
Non-Guarantors |
|
Consolidating Adjustments
|
|
Consolidated KMI
|
||||||||||||
Total Revenues
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,127
|
|
|
$
|
785
|
|
|
$
|
(66
|
)
|
|
$
|
6,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Costs, Expenses and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Costs of sales
|
|
—
|
|
|
—
|
|
|
2,001
|
|
|
129
|
|
|
(43
|
)
|
|
2,087
|
|
||||||
Depreciation, depletion and amortization
|
|
9
|
|
|
—
|
|
|
970
|
|
|
162
|
|
|
—
|
|
|
1,141
|
|
||||||
Other operating (income) expense
|
|
(19
|
)
|
|
1
|
|
|
2,120
|
|
|
318
|
|
|
(23
|
)
|
|
2,397
|
|
||||||
Total Operating Costs, Expenses and Other
|
|
(10
|
)
|
|
1
|
|
|
5,091
|
|
|
609
|
|
|
(66
|
)
|
|
5,625
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Income (Loss)
|
|
10
|
|
|
(1
|
)
|
|
1,036
|
|
|
176
|
|
|
—
|
|
|
1,221
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings from consolidated subsidiaries
|
|
804
|
|
|
690
|
|
|
147
|
|
|
20
|
|
|
(1,661
|
)
|
|
—
|
|
||||||
Earnings from equity investments
|
|
—
|
|
|
—
|
|
|
278
|
|
|
—
|
|
|
—
|
|
|
278
|
|
||||||
Interest, net
|
|
(377
|
)
|
|
(6
|
)
|
|
(546
|
)
|
|
(54
|
)
|
|
—
|
|
|
(983
|
)
|
||||||
Amortization of excess cost of equity investments and other, net
|
|
13
|
|
|
—
|
|
|
(15
|
)
|
|
16
|
|
|
—
|
|
|
14
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Before Income Taxes
|
|
450
|
|
|
683
|
|
|
900
|
|
|
158
|
|
|
(1,661
|
)
|
|
530
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Tax Expense
|
|
(67
|
)
|
|
(4
|
)
|
|
(45
|
)
|
|
(2
|
)
|
|
—
|
|
|
(118
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
|
383
|
|
|
679
|
|
|
855
|
|
|
156
|
|
|
(1,661
|
)
|
|
412
|
|
||||||
Net Income Attributable to Noncontrolling Interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(29
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income Attributable to Controlling Interests
|
|
383
|
|
|
679
|
|
|
855
|
|
|
156
|
|
|
(1,690
|
)
|
|
383
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred Stock Dividends
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
||||||
Net Income Available to Common Stockholders
|
|
$
|
305
|
|
|
$
|
679
|
|
|
$
|
855
|
|
|
$
|
156
|
|
|
$
|
(1,690
|
)
|
|
$
|
305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
|
$
|
383
|
|
|
$
|
679
|
|
|
$
|
855
|
|
|
$
|
156
|
|
|
$
|
(1,661
|
)
|
|
$
|
412
|
|
Total other comprehensive loss
|
|
(40
|
)
|
|
(98
|
)
|
|
(101
|
)
|
|
(136
|
)
|
|
295
|
|
|
(80
|
)
|
||||||
Comprehensive income
|
|
343
|
|
|
581
|
|
|
754
|
|
|
20
|
|
|
(1,366
|
)
|
|
332
|
|
||||||
Comprehensive loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
||||||
Comprehensive income attributable to controlling interests
|
|
$
|
343
|
|
|
$
|
581
|
|
|
$
|
754
|
|
|
$
|
20
|
|
|
$
|
(1,355
|
)
|
|
$
|
343
|
|
Condensed Consolidating Statements of Income and Comprehensive Income
for the Six Months Ended June 30, 2017
(In Millions)
(Unaudited)
|
||||||||||||||||||||||||
|
|
Parent
Issuer and Guarantor |
|
Subsidiary
Issuer and Guarantor - KMP |
|
Subsidiary
Guarantors |
|
Subsidiary
Non-Guarantors |
|
Consolidating Adjustments
|
|
Consolidated KMI
|
||||||||||||
Total Revenues
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
6,060
|
|
|
$
|
777
|
|
|
$
|
(63
|
)
|
|
$
|
6,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Costs, Expenses and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Costs of sales
|
|
—
|
|
|
—
|
|
|
2,018
|
|
|
154
|
|
|
(41
|
)
|
|
2,131
|
|
||||||
Depreciation, depletion and amortization
|
|
8
|
|
|
—
|
|
|
964
|
|
|
163
|
|
|
—
|
|
|
1,135
|
|
||||||
Other operating expenses
|
|
25
|
|
|
—
|
|
|
1,402
|
|
|
226
|
|
|
(22
|
)
|
|
1,631
|
|
||||||
Total Operating Costs, Expenses and Other
|
|
33
|
|
|
—
|
|
|
4,384
|
|
|
543
|
|
|
(63
|
)
|
|
4,897
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating (Loss) Income
|
|
(15
|
)
|
|
—
|
|
|
1,676
|
|
|
234
|
|
|
—
|
|
|
1,895
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings from consolidated subsidiaries
|
|
1,593
|
|
|
1,561
|
|
|
212
|
|
|
35
|
|
|
(3,401
|
)
|
|
—
|
|
||||||
Earnings from equity investments
|
|
—
|
|
|
—
|
|
|
310
|
|
|
—
|
|
|
—
|
|
|
310
|
|
||||||
Interest, net
|
|
(354
|
)
|
|
10
|
|
|
(555
|
)
|
|
(29
|
)
|
|
—
|
|
|
(928
|
)
|
||||||
Amortization of excess cost of equity investments and other, net
|
|
—
|
|
|
—
|
|
|
6
|
|
|
7
|
|
|
—
|
|
|
13
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Before Income Taxes
|
|
1,224
|
|
|
1,571
|
|
|
1,649
|
|
|
247
|
|
|
(3,401
|
)
|
|
1,290
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Tax Expense
|
|
(408
|
)
|
|
(3
|
)
|
|
(35
|
)
|
|
(16
|
)
|
|
—
|
|
|
(462
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
|
816
|
|
|
1,568
|
|
|
1,614
|
|
|
231
|
|
|
(3,401
|
)
|
|
828
|
|
||||||
Net Income Attributable to Noncontrolling Interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income Attributable to Controlling Interests
|
|
816
|
|
|
1,568
|
|
|
1,614
|
|
|
231
|
|
|
(3,413
|
)
|
|
816
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred Stock Dividends
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
||||||
Net Income Available to Common Stockholders
|
|
738
|
|
|
1,568
|
|
|
1,614
|
|
|
231
|
|
|
(3,413
|
)
|
|
738
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
|
$
|
816
|
|
|
$
|
1,568
|
|
|
$
|
1,614
|
|
|
$
|
231
|
|
|
$
|
(3,401
|
)
|
|
$
|
828
|
|
Total other comprehensive income
|
|
127
|
|
|
274
|
|
|
293
|
|
|
73
|
|
|
(621
|
)
|
|
146
|
|
||||||
Comprehensive income
|
|
943
|
|
|
1,842
|
|
|
1,907
|
|
|
304
|
|
|
(4,022
|
)
|
|
974
|
|
||||||
Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
(31
|
)
|
||||||
Comprehensive income attributable to controlling interests
|
|
$
|
943
|
|
|
$
|
1,842
|
|
|
$
|
1,907
|
|
|
$
|
304
|
|
|
$
|
(4,053
|
)
|
|
$
|
943
|
|
Condensed Consolidating Balance Sheets as of June 30, 2018
(In Millions)
(Unaudited)
|
||||||||||||||||||||||||
|
|
Parent
Issuer and Guarantor |
|
Subsidiary
Issuer and Guarantor - KMP |
|
Subsidiary
Guarantors |
|
Subsidiary
Non-Guarantors |
|
Consolidating
Adjustments
|
|
Consolidated KMI
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
266
|
|
|
$
|
(4
|
)
|
|
$
|
271
|
|
Other current assets - affiliates
|
|
4,305
|
|
|
5,038
|
|
|
22,139
|
|
|
982
|
|
|
(32,464
|
)
|
|
—
|
|
||||||
All other current assets
|
|
254
|
|
|
51
|
|
|
1,795
|
|
|
273
|
|
|
(10
|
)
|
|
2,363
|
|
||||||
Property, plant and equipment, net
|
|
239
|
|
|
—
|
|
|
30,555
|
|
|
9,111
|
|
|
—
|
|
|
39,905
|
|
||||||
Investments
|
|
664
|
|
|
—
|
|
|
6,492
|
|
|
137
|
|
|
—
|
|
|
7,293
|
|
||||||
Investments in subsidiaries
|
|
39,870
|
|
|
37,662
|
|
|
5,513
|
|
|
4,271
|
|
|
(87,316
|
)
|
|
—
|
|
||||||
Goodwill
|
|
13,789
|
|
|
22
|
|
|
5,166
|
|
|
3,176
|
|
|
—
|
|
|
22,153
|
|
||||||
Notes receivable from affiliates
|
|
963
|
|
|
20,352
|
|
|
626
|
|
|
904
|
|
|
(22,845
|
)
|
|
—
|
|
||||||
Deferred income taxes
|
|
3,559
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,606
|
)
|
|
1,953
|
|
||||||
Other non-current assets
|
|
251
|
|
|
89
|
|
|
3,935
|
|
|
102
|
|
|
—
|
|
|
4,377
|
|
||||||
Total assets
|
|
$
|
63,903
|
|
|
$
|
63,214
|
|
|
$
|
76,221
|
|
|
$
|
19,222
|
|
|
$
|
(144,245
|
)
|
|
$
|
78,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of debt
|
|
$
|
490
|
|
|
$
|
1,300
|
|
|
$
|
30
|
|
|
$
|
312
|
|
|
$
|
—
|
|
|
$
|
2,132
|
|
Other current liabilities - affiliates
|
|
12,783
|
|
|
14,189
|
|
|
4,622
|
|
|
870
|
|
|
(32,464
|
)
|
|
—
|
|
||||||
All other current liabilities
|
|
410
|
|
|
334
|
|
|
1,983
|
|
|
534
|
|
|
(14
|
)
|
|
3,247
|
|
||||||
Long-term debt
|
|
14,945
|
|
|
16,737
|
|
|
3,035
|
|
|
649
|
|
|
—
|
|
|
35,366
|
|
||||||
Notes payable to affiliates
|
|
1,491
|
|
|
448
|
|
|
20,551
|
|
|
355
|
|
|
(22,845
|
)
|
|
—
|
|
||||||
Deferred income taxes
|
|
—
|
|
|
—
|
|
|
490
|
|
|
1,116
|
|
|
(1,606
|
)
|
|
—
|
|
||||||
All other long-term liabilities and deferred credits
|
|
749
|
|
|
188
|
|
|
1,028
|
|
|
530
|
|
|
—
|
|
|
2,495
|
|
||||||
Total liabilities
|
|
30,868
|
|
|
33,196
|
|
|
31,739
|
|
|
4,366
|
|
|
(56,929
|
)
|
|
43,240
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
581
|
|
|
—
|
|
|
—
|
|
|
581
|
|
||||||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total KMI equity
|
|
33,035
|
|
|
30,018
|
|
|
43,901
|
|
|
14,856
|
|
|
(88,775
|
)
|
|
33,035
|
|
||||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,459
|
|
|
1,459
|
|
||||||
Total stockholders’ equity
|
|
33,035
|
|
|
30,018
|
|
|
43,901
|
|
|
14,856
|
|
|
(87,316
|
)
|
|
34,494
|
|
||||||
Total Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity
|
|
$
|
63,903
|
|
|
$
|
63,214
|
|
|
$
|
76,221
|
|
|
$
|
19,222
|
|
|
$
|
(144,245
|
)
|
|
$
|
78,315
|
|
Condensed Consolidating Balance Sheets as of December 31, 2017
(In Millions)
|
||||||||||||||||||||||||
|
|
Parent
Issuer and Guarantor |
|
Subsidiary
Issuer and Guarantor - KMP |
|
Subsidiary
Guarantors |
|
Subsidiary
Non-Guarantors |
|
Consolidating
Adjustments
|
|
Consolidated KMI
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
262
|
|
|
$
|
(1
|
)
|
|
$
|
264
|
|
Other current assets - affiliates
|
|
6,214
|
|
|
5,201
|
|
|
22,402
|
|
|
858
|
|
|
(34,675
|
)
|
|
—
|
|
||||||
All other current assets
|
|
243
|
|
|
59
|
|
|
1,938
|
|
|
235
|
|
|
(24
|
)
|
|
2,451
|
|
||||||
Property, plant and equipment, net
|
|
236
|
|
|
—
|
|
|
31,093
|
|
|
8,826
|
|
|
—
|
|
|
40,155
|
|
||||||
Investments
|
|
665
|
|
|
—
|
|
|
6,498
|
|
|
135
|
|
|
—
|
|
|
7,298
|
|
||||||
Investments in subsidiaries
|
|
37,983
|
|
|
36,728
|
|
|
5,417
|
|
|
4,232
|
|
|
(84,360
|
)
|
|
—
|
|
||||||
Goodwill
|
|
13,789
|
|
|
22
|
|
|
5,166
|
|
|
3,185
|
|
|
—
|
|
|
22,162
|
|
||||||
Notes receivable from affiliates
|
|
1,033
|
|
|
20,363
|
|
|
1,233
|
|
|
776
|
|
|
(23,405
|
)
|
|
—
|
|
||||||
Deferred income taxes
|
|
3,635
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,591
|
)
|
|
2,044
|
|
||||||
Other non-current assets
|
|
254
|
|
|
164
|
|
|
4,080
|
|
|
183
|
|
|
—
|
|
|
4,681
|
|
||||||
Total assets
|
|
$
|
64,055
|
|
|
$
|
62,537
|
|
|
$
|
77,827
|
|
|
$
|
18,692
|
|
|
$
|
(144,056
|
)
|
|
$
|
79,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of debt
|
|
$
|
924
|
|
|
$
|
975
|
|
|
$
|
805
|
|
|
$
|
124
|
|
|
$
|
—
|
|
|
$
|
2,828
|
|
Other current liabilities - affiliates
|
|
13,225
|
|
|
14,188
|
|
|
6,512
|
|
|
750
|
|
|
(34,675
|
)
|
|
—
|
|
||||||
All other current liabilities
|
|
468
|
|
|
347
|
|
|
2,055
|
|
|
508
|
|
|
(25
|
)
|
|
3,353
|
|
||||||
Long-term debt
|
|
13,104
|
|
|
18,206
|
|
|
3,052
|
|
|
653
|
|
|
—
|
|
|
35,015
|
|
||||||
Notes payable to affiliates
|
|
2,009
|
|
|
448
|
|
|
20,593
|
|
|
355
|
|
|
(23,405
|
)
|
|
—
|
|
||||||
Deferred income taxes
|
|
—
|
|
|
—
|
|
|
449
|
|
|
1,142
|
|
|
(1,591
|
)
|
|
—
|
|
||||||
Other long-term liabilities and deferred credits
|
|
689
|
|
|
117
|
|
|
1,462
|
|
|
467
|
|
|
—
|
|
|
2,735
|
|
||||||
Total liabilities
|
|
30,419
|
|
|
34,281
|
|
|
34,928
|
|
|
3,999
|
|
|
(59,696
|
)
|
|
43,931
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total KMI equity
|
|
33,636
|
|
|
28,256
|
|
|
42,899
|
|
|
14,693
|
|
|
(85,848
|
)
|
|
33,636
|
|
||||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,488
|
|
|
1,488
|
|
||||||
Total stockholders’ equity
|
|
33,636
|
|
|
28,256
|
|
|
42,899
|
|
|
14,693
|
|
|
(84,360
|
)
|
|
35,124
|
|
||||||
Total Liabilities and Stockholders’ Equity
|
|
$
|
64,055
|
|
|
$
|
62,537
|
|
|
$
|
77,827
|
|
|
$
|
18,692
|
|
|
$
|
(144,056
|
)
|
|
$
|
79,055
|
|
Condensed Consolidating Statements of Cash Flows for the Six Months Ended June 30, 2018
(In Millions)
(Unaudited)
|
||||||||||||||||||||||||
|
|
Parent
Issuer and Guarantor |
|
Subsidiary
Issuer and Guarantor - KMP |
|
Subsidiary
Guarantors |
|
Subsidiary
Non-Guarantors |
|
Consolidating Adjustments
|
|
Consolidated KMI
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(2,142
|
)
|
|
$
|
2,048
|
|
|
$
|
5,644
|
|
|
$
|
519
|
|
|
$
|
(3,601
|
)
|
|
$
|
2,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisitions of assets and investments
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
||||||
Capital expenditures
|
|
(16
|
)
|
|
—
|
|
|
(940
|
)
|
|
(517
|
)
|
|
—
|
|
|
(1,473
|
)
|
||||||
Proceeds from sales of equity investments
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||||
Sales of property, plant and equipment, and other net assets, net of removal costs
|
|
3
|
|
|
—
|
|
|
(6
|
)
|
|
9
|
|
|
—
|
|
|
6
|
|
||||||
Contributions to investments
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
(5
|
)
|
|
—
|
|
|
(111
|
)
|
||||||
Distributions from equity investments in excess of cumulative earnings
|
|
1,910
|
|
|
—
|
|
|
149
|
|
|
—
|
|
|
(1,910
|
)
|
|
149
|
|
||||||
Funding (to) from affiliates
|
|
(4,016
|
)
|
|
5
|
|
|
(3,737
|
)
|
|
(489
|
)
|
|
8,237
|
|
|
—
|
|
||||||
Loans to related party
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
||||||
Net cash (used in) provided by investing activities
|
|
(2,119
|
)
|
|
5
|
|
|
(4,643
|
)
|
|
(1,002
|
)
|
|
6,327
|
|
|
(1,432
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Issuances of debt
|
|
8,297
|
|
|
—
|
|
|
—
|
|
|
268
|
|
|
—
|
|
|
8,565
|
|
||||||
Payments of debt
|
|
(6,737
|
)
|
|
(975
|
)
|
|
(779
|
)
|
|
(84
|
)
|
|
—
|
|
|
(8,575
|
)
|
||||||
Debt issue costs
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(31
|
)
|
||||||
Cash dividends - common shares
|
|
(719
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(719
|
)
|
||||||
Cash dividends - preferred shares
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
||||||
Repurchases of common shares
|
|
(250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(250
|
)
|
||||||
Funding from affiliates
|
|
3,779
|
|
|
1,517
|
|
|
2,499
|
|
|
442
|
|
|
(8,237
|
)
|
|
—
|
|
||||||
Contributions from investment partner
|
|
—
|
|
|
—
|
|
|
97
|
|
|
—
|
|
|
—
|
|
|
97
|
|
||||||
Contributions from parents
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
||||||
Contributions from noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
||||||
Distributions to parents
|
|
—
|
|
|
(2,573
|
)
|
|
(2,835
|
)
|
|
(135
|
)
|
|
5,543
|
|
|
—
|
|
||||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
||||||
Other, net
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Net cash provided by (used in) financing activities
|
|
4,267
|
|
|
(2,031
|
)
|
|
(1,001
|
)
|
|
484
|
|
|
(2,729
|
)
|
|
(1,010
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Deposits
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net increase (decrease) in Cash, Cash Equivalents and Restricted Deposits
|
|
6
|
|
|
22
|
|
|
—
|
|
|
(4
|
)
|
|
(3
|
)
|
|
21
|
|
||||||
Cash, Cash Equivalents, and Restricted Deposits, beginning of period
|
|
3
|
|
|
1
|
|
|
—
|
|
|
323
|
|
|
(1
|
)
|
|
326
|
|
||||||
Cash, Cash Equivalents, and Restricted Deposits, end of period
|
|
$
|
9
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
319
|
|
|
$
|
(4
|
)
|
|
$
|
347
|
|
Condensed Consolidating Statements of Cash Flows for the Six Months Ended June 30, 2017
(In Millions)
(Unaudited)
|
||||||||||||||||||||||||
|
|
Parent
Issuer and Guarantor |
|
Subsidiary
Issuer and Guarantor - KMP |
|
Subsidiary
Guarantors |
|
Subsidiary
Non-Guarantors |
|
Consolidating Adjustments
|
|
Consolidated KMI
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(1,460
|
)
|
|
$
|
2,076
|
|
|
$
|
5,813
|
|
|
$
|
509
|
|
|
$
|
(4,772
|
)
|
|
$
|
2,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisitions of assets and investments
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Capital expenditures
|
|
(23
|
)
|
|
—
|
|
|
(1,062
|
)
|
|
(251
|
)
|
|
—
|
|
|
(1,336
|
)
|
||||||
Sales of property, plant and equipment, and other net assets, net of removal costs
|
|
5
|
|
|
—
|
|
|
45
|
|
|
21
|
|
|
—
|
|
|
71
|
|
||||||
Contributions to investments
|
|
(215
|
)
|
|
—
|
|
|
(327
|
)
|
|
(6
|
)
|
|
—
|
|
|
(548
|
)
|
||||||
Distributions from equity investments in excess of cumulative earnings
|
|
1,025
|
|
|
—
|
|
|
195
|
|
|
—
|
|
|
(1,006
|
)
|
|
214
|
|
||||||
Funding (to) from affiliates
|
|
(2,806
|
)
|
|
657
|
|
|
(4,013
|
)
|
|
(482
|
)
|
|
6,644
|
|
|
—
|
|
||||||
Loans (to) from related party
|
|
(8
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||||
Net cash (used in) provided by investing activities
|
|
(2,022
|
)
|
|
658
|
|
|
(5,166
|
)
|
|
(718
|
)
|
|
5,638
|
|
|
(1,610
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Issuances of debt
|
|
4,187
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|
—
|
|
|
4,330
|
|
||||||
Payments of debt
|
|
(4,858
|
)
|
|
(600
|
)
|
|
(659
|
)
|
|
(7
|
)
|
|
—
|
|
|
(6,124
|
)
|
||||||
Debt issue costs
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
(60
|
)
|
||||||
Cash dividends - common shares
|
|
(560
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(560
|
)
|
||||||
Cash dividends - preferred shares
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
||||||
Funding from (to) affiliates
|
|
4,356
|
|
|
406
|
|
|
2,444
|
|
|
(562
|
)
|
|
(6,644
|
)
|
|
—
|
|
||||||
Contribution from investment partner
|
|
—
|
|
|
—
|
|
|
415
|
|
|
—
|
|
|
—
|
|
|
415
|
|
||||||
Contributions from parents, including proceeds from KML IPO
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
1,253
|
|
|
(1,251
|
)
|
|
—
|
|
||||||
Contributions from noncontrolling interests - net proceeds from KML IPO
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,240
|
|
|
1,247
|
|
||||||
Contributions from noncontrolling interests - other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
||||||
Distributions to parents
|
|
—
|
|
|
(2,569
|
)
|
|
(2,854
|
)
|
|
(365
|
)
|
|
5,788
|
|
|
—
|
|
||||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
||||||
Other, net
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Net cash provided by (used in) financing activities
|
|
3,047
|
|
|
(2,763
|
)
|
|
(656
|
)
|
|
408
|
|
|
(871
|
)
|
|
(835
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted deposits
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (decrease) increase in Cash, Cash Equivalents and Restricted Deposits
|
|
(435
|
)
|
|
(29
|
)
|
|
(9
|
)
|
|
209
|
|
|
(5
|
)
|
|
(269
|
)
|
||||||
Cash, Cash Equivalents, and Restricted Deposits, beginning of period
|
|
471
|
|
|
36
|
|
|
9
|
|
|
272
|
|
|
(1
|
)
|
|
787
|
|
||||||
Cash, Cash Equivalents, and Restricted Deposits, end of period
|
|
$
|
36
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
481
|
|
|
$
|
(6
|
)
|
|
$
|
518
|
|
|
Three Months Ended June 30,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
Earnings
increase/(decrease)
|
|||||||||
|
(In millions, except percentages)
|
|||||||||||||
Segment EBDA(a)
|
|
|
|
|
|
|
|
|||||||
Natural Gas Pipelines
|
$
|
313
|
|
|
$
|
907
|
|
|
$
|
(594
|
)
|
|
(65
|
)%
|
CO
2
|
157
|
|
|
221
|
|
|
(64
|
)
|
|
(29
|
)%
|
|||
Terminals
|
274
|
|
|
304
|
|
|
(30
|
)
|
|
(10
|
)%
|
|||
Products Pipelines
|
319
|
|
|
324
|
|
|
(5
|
)
|
|
(2
|
)%
|
|||
Kinder Morgan Canada
|
46
|
|
|
43
|
|
|
3
|
|
|
7
|
%
|
|||
Total Segment EBDA(b)
|
1,109
|
|
|
1,799
|
|
|
(690
|
)
|
|
(38
|
)%
|
|||
DD&A
|
(571
|
)
|
|
(577
|
)
|
|
6
|
|
|
1
|
%
|
|||
Amortization of excess cost of equity investments
|
(24
|
)
|
|
(15
|
)
|
|
(9
|
)
|
|
(60
|
)%
|
|||
General and administrative and corporate charges(c)
|
(174
|
)
|
|
(145
|
)
|
|
(29
|
)
|
|
(20
|
)%
|
|||
Interest, net(d)
|
(516
|
)
|
|
(463
|
)
|
|
(53
|
)
|
|
(11
|
)%
|
|||
(Loss) income before income taxes
|
(176
|
)
|
|
599
|
|
|
(775
|
)
|
|
(129
|
)%
|
|||
Income tax benefit (expense)
|
46
|
|
|
(216
|
)
|
|
262
|
|
|
121
|
%
|
|||
Net (loss) income
|
(130
|
)
|
|
383
|
|
|
(513
|
)
|
|
(134
|
)%
|
|||
Net income attributable to noncontrolling interests
|
(11
|
)
|
|
(7
|
)
|
|
(4
|
)
|
|
(57
|
)%
|
|||
Net (loss) income attributable to Kinder Morgan, Inc.
|
(141
|
)
|
|
376
|
|
|
(517
|
)
|
|
(138
|
)%
|
|||
Preferred stock dividends
|
(39
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
%
|
|||
Net (loss) income available to common stockholders
|
$
|
(180
|
)
|
|
$
|
337
|
|
|
$
|
(517
|
)
|
|
(153
|
)%
|
|
Six Months Ended June 30,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
Earnings
increase/(decrease) |
|||||||||
|
(In millions, except percentages)
|
|||||||||||||
Segment EBDA(a)
|
|
|
|
|
|
|
|
|||||||
Natural Gas Pipelines
|
$
|
1,449
|
|
|
$
|
1,962
|
|
|
$
|
(513
|
)
|
|
(26
|
)%
|
CO
2
|
356
|
|
|
439
|
|
|
(83
|
)
|
|
(19
|
)%
|
|||
Terminals
|
569
|
|
|
611
|
|
|
(42
|
)
|
|
(7
|
)%
|
|||
Products Pipelines
|
578
|
|
|
611
|
|
|
(33
|
)
|
|
(5
|
)%
|
|||
Kinder Morgan Canada
|
92
|
|
|
86
|
|
|
6
|
|
|
7
|
%
|
|||
Total Segment EBDA(b)
|
3,044
|
|
|
3,709
|
|
|
(665
|
)
|
|
(18
|
)%
|
|||
DD&A
|
(1,141
|
)
|
|
(1,135
|
)
|
|
(6
|
)
|
|
(1
|
)%
|
|||
Amortization of excess cost of equity investments
|
(56
|
)
|
|
(30
|
)
|
|
(26
|
)
|
|
(87
|
)%
|
|||
General and administrative and corporate charges(c)
|
(334
|
)
|
|
(326
|
)
|
|
(8
|
)
|
|
(2
|
)%
|
|||
Interest, net(d)
|
(983
|
)
|
|
(928
|
)
|
|
(55
|
)
|
|
(6
|
)%
|
|||
Income before income taxes
|
530
|
|
|
1,290
|
|
|
(760
|
)
|
|
(59
|
)%
|
|||
Income tax expense
|
(118
|
)
|
|
(462
|
)
|
|
344
|
|
|
74
|
%
|
|||
Net income
|
412
|
|
|
828
|
|
|
(416
|
)
|
|
(50
|
)%
|
|||
Net income attributable to noncontrolling interests
|
(29
|
)
|
|
(12
|
)
|
|
(17
|
)
|
|
(142
|
)%
|
|||
Net income attributable to Kinder Morgan, Inc.
|
383
|
|
|
816
|
|
|
(433
|
)
|
|
(53
|
)%
|
|||
Preferred Stock Dividends
|
(78
|
)
|
|
(78
|
)
|
|
—
|
|
|
—
|
%
|
|||
Net income Available to Common Stockholders
|
$
|
305
|
|
|
$
|
738
|
|
|
$
|
(433
|
)
|
|
(59
|
)%
|
(a)
|
Includes revenues, earnings from equity investments, and other, net, less operating expenses, loss on impairments and divestitures, net, loss on impairment of equity investment and other expense (income), net. Operating expenses include costs of sales, operations and maintenance expenses, and taxes, other than income taxes.
|
(b)
|
Three and six month 2018 amounts include net decreases in earnings of $785 million and $801 million, respectively, and three and six month 2017 amounts include net increases in earnings of $42 million and $79 million, respectively, related to the combined effect of the
|
(c)
|
Three and six month 2018 amounts include net increases in expense of $14 million and $10 million, respectively, and three and six month 2017 amounts include a net decrease in expense of $4 million and a net increase in expense of $3 million, respectively, related to the combined effect of the certain items related to general and administrative expense and corporate charges disclosed below in “—General and Administrative and Corporate Charges, Interest, net and Noncontrolling Interests.”
|
(d)
|
Three and six month 2018 amounts include net increases in expense of $39 million and $34 million, respectively, and three and six month 2017 amounts include net decreases in expense of $5 million and $17 million, respectively, related to the combined effect of the certain items related to interest expense, net disclosed below in “—General and Administrative and Corporate Charges, Interest, net and Noncontrolling Interests.”
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Net (Loss) Income Available to Common Stockholders
|
$
|
(180
|
)
|
|
$
|
337
|
|
|
$
|
305
|
|
|
$
|
738
|
|
Add/(Subtract):
|
|
|
|
|
|
|
|
||||||||
Certain items before book tax(a)
|
838
|
|
|
(51
|
)
|
|
889
|
|
|
(93
|
)
|
||||
Book tax certain items(b)
|
(191
|
)
|
|
17
|
|
|
(194
|
)
|
|
29
|
|
||||
Impact of 2017 Tax Reform(c)
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
||||
Total certain items
|
647
|
|
|
(34
|
)
|
|
651
|
|
|
(64
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Noncontrolling interest certain items(d)
|
(8
|
)
|
|
1
|
|
|
(8
|
)
|
|
1
|
|
||||
Net income available to common stockholders before certain items
|
459
|
|
|
304
|
|
|
948
|
|
|
675
|
|
||||
Add/(Subtract):
|
|
|
|
|
|
|
|
||||||||
DD&A expense(e)
|
684
|
|
|
686
|
|
|
1,374
|
|
|
1,357
|
|
||||
Total book taxes(f)
|
159
|
|
|
223
|
|
|
343
|
|
|
484
|
|
||||
Cash taxes(g)
|
(33
|
)
|
|
(48
|
)
|
|
(46
|
)
|
|
(45
|
)
|
||||
Other items(h)
|
11
|
|
|
13
|
|
|
22
|
|
|
26
|
|
||||
Sustaining capital expenditures(i)
|
(163
|
)
|
|
(156
|
)
|
|
(277
|
)
|
|
(260
|
)
|
||||
DCF
|
$
|
1,117
|
|
|
$
|
1,022
|
|
|
$
|
2,364
|
|
|
$
|
2,237
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding for dividends(j)
|
2,214
|
|
|
2,239
|
|
|
2,216
|
|
|
2,239
|
|
||||
DCF per common share
|
$
|
0.50
|
|
|
$
|
0.46
|
|
|
$
|
1.07
|
|
|
$
|
1.00
|
|
Declared dividend per common share
|
$
|
0.20
|
|
|
$
|
0.125
|
|
|
$
|
0.40
|
|
|
$
|
0.25
|
|
(a)
|
Consists of certain items summarized in footnotes (b) through (d) to the “
—
Results of Operations
—
Consolidated Earnings Results” table included above, and described in more detail below in the footnotes to tables included in both our management’s discussion and analysis of segment results and “
—
General and Administrative and Corporate Charges, Interest, net and Noncontrolling Interests.”
|
(b)
|
Represents income tax provision on certain items, plus discrete income tax certain items.
|
(c)
|
Represents our share of certain equity investees’ 2017 Tax Reform provisional adjustments.
|
(d)
|
Represents noncontrolling interests share of certain items.
|
(e)
|
Includes DD&A and amortization of excess cost of equity investments. Three and six month 2018 amounts also include $89 million and $177 million, respectively, and three and six month 2017 amounts also include $94 million and $192 million, respectively, of our share of certain equity investees’ DD&A, net of the noncontrolling interests’ portion of KML DD&A and consolidating joint venture partners’ share of DD&A.
|
(f)
|
Excludes book tax certain items. Three and six month 2018 amounts also include $14 million and $31 million, respectively, and three and six month 2017 amounts also include $24 million and $51 million, respectively, of our share of taxable equity investees’ book taxes, net of the noncontrolling interests’ portion of KML book taxes.
|
(g)
|
Three and six month 2018 amounts also include $(28) million and $(38) million, respectively, and three and six month 2017 amounts also include $(45) million for both periods, of our share of taxable equity investees’ cash taxes.
|
(h)
|
Consists primarily of non-cash compensation associated with our restricted stock program.
|
(i)
|
Three and six month 2018 amounts include $(24) million and $(40) million, respectively, and three and six month 2017 amounts include $(27) million and $(45) million, respectively, of our share of (i) certain equity investees’; (ii) KML’s; and (iii) certain consolidating joint venture subsidiaries’ sustaining capital expenditures.
|
(j)
|
Includes restricted stock awards that participate in common share dividends.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions, except operating statistics)
|
||||||||||||||
Revenues(a)
|
$
|
2,166
|
|
|
$
|
2,095
|
|
|
$
|
4,332
|
|
|
$
|
4,266
|
|
Operating expenses(b)
|
(1,297
|
)
|
|
(1,312
|
)
|
|
(2,529
|
)
|
|
(2,584
|
)
|
||||
Loss on impairments and divestitures, net(b)
|
(599
|
)
|
|
—
|
|
|
(599
|
)
|
|
—
|
|
||||
Other income
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Earnings from equity investments(b)
|
26
|
|
|
109
|
|
|
211
|
|
|
255
|
|
||||
Other, net
|
16
|
|
|
15
|
|
|
33
|
|
|
25
|
|
||||
Segment EBDA(b)
|
313
|
|
|
907
|
|
|
1,449
|
|
|
1,962
|
|
||||
Certain items(b)
|
688
|
|
|
(2
|
)
|
|
634
|
|
|
(38
|
)
|
||||
Segment EBDA before certain items
|
$
|
1,001
|
|
|
$
|
905
|
|
|
$
|
2,083
|
|
|
$
|
1,924
|
|
|
|
|
|
|
|
|
|
||||||||
Change from prior period
|
Increase/(Decrease)
|
||||||||||||||
Revenues before certain items
|
$
|
75
|
|
|
4
|
%
|
|
$
|
79
|
|
|
2
|
%
|
||
Segment EBDA before certain items
|
$
|
96
|
|
|
11
|
%
|
|
$
|
159
|
|
|
8
|
%
|
||
|
|
|
|
|
|
|
|
||||||||
Natural gas transport volumes (BBtu/d)(c)
|
31,704
|
|
|
28,187
|
|
|
31,913
|
|
|
28,753
|
|
||||
Natural gas sales volumes (BBtu/d)(c)
|
2,445
|
|
|
2,247
|
|
|
2,468
|
|
|
2,404
|
|
||||
Natural gas gathering volumes (BBtu/d)(c)
|
2,871
|
|
|
2,673
|
|
|
2,801
|
|
|
2,693
|
|
||||
Crude/condensate gathering volumes (MBbl/d)(c)
|
311
|
|
|
261
|
|
|
296
|
|
|
267
|
|
(a)
|
Three and six month 2018 amounts include decreases in revenue of $11 million and $5 million, respectively, and three and six month 2017 amounts include increases of $7 million and $22 million, respectively, related to non-cash mark-to-market derivative contracts used to hedge forecasted natural gas, NGL and crude oil sales. Three and six month 2018 amounts also include increases in revenue for both periods of $9 million related to a transportation contract refund and $5 million related to the early termination of a long-term natural gas transportation contract.
|
(b)
|
In addition to the revenue certain items described in footnote (a) above: three and six month 2018 amounts also include (i) a $600 million non-cash loss on impairment of certain gathering and processing assets in Oklahoma for both periods; (ii) a net loss of $89 million in our equity investment in Gulf LNG Holdings Group, LLC (Gulf LNG) for both periods, due to a ruling by an arbitration panel affecting a customer contract, which resulted in a non-cash impairment of our investment partially offset by our share of earnings recognized by Gulf LNG on the respective customer contract; and (iii) decreases in earnings of $2 million and $4 million, respectively, related to other certain items. Six month 2018 amount also includes an increase in earnings of $44 million for our share of certain equity investees’ 2017 Tax Reform provisional adjustments and an increase in earnings of $6 million related to the release of certain sales and use tax reserves. Three and six month 2017 amounts also include decreases in earnings of $5 million and $6 million, respectively, from other certain items. Also, six month 2017 amount includes an increase in earnings from an equity investment of $22 million on the sale of a claim related to the early termination of a long-term natural gas transportation contract.
|
(c)
|
Joint venture throughput is reported at our ownership share.
|
|
Segment EBDA before certain items
increase/(decrease)
|
|
Revenues before
certain items
increase/(decrease)
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||
Hiland Midstream
|
$
|
21
|
|
|
51
|
%
|
|
$
|
(22
|
)
|
|
(12
|
)%
|
EPNG
|
20
|
|
|
19
|
%
|
|
20
|
|
|
13
|
%
|
||
Texas Intrastate Natural Gas Pipeline Operations
|
8
|
|
|
10
|
%
|
|
(29
|
)
|
|
(4
|
)%
|
||
TGP
|
7
|
|
|
2
|
%
|
|
11
|
|
|
3
|
%
|
||
KinderHawk
|
7
|
|
|
41
|
%
|
|
8
|
|
|
38
|
%
|
||
NGPL
|
6
|
|
|
200
|
%
|
|
9
|
|
|
n/a
|
|||
CIG
|
6
|
|
|
12
|
%
|
|
5
|
|
|
7
|
%
|
||
Citrus(a)
|
4
|
|
|
13
|
%
|
|
—
|
|
|
—
|
%
|
||
SNG(a)
|
3
|
|
|
12
|
%
|
|
1
|
|
|
14
|
%
|
||
All others (including eliminations)
|
14
|
|
|
5
|
%
|
|
72
|
|
|
15
|
%
|
||
Total Natural Gas Pipelines
|
$
|
96
|
|
|
11
|
%
|
|
$
|
75
|
|
|
4
|
%
|
|
Segment EBDA before certain items
increase/(decrease)
|
|
Revenues before
certain items
increase/(decrease)
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||
Hiland Midstream
|
$
|
31
|
|
|
36
|
%
|
|
$
|
(37
|
)
|
|
(11
|
)%
|
EPNG
|
26
|
|
|
11
|
%
|
|
29
|
|
|
9
|
%
|
||
Texas Intrastate Natural Gas Pipeline Operations
|
42
|
|
|
22
|
%
|
|
(18
|
)
|
|
(1
|
)%
|
||
TGP
|
(8
|
)
|
|
(1
|
)%
|
|
21
|
|
|
3
|
%
|
||
KinderHawk
|
11
|
|
|
31
|
%
|
|
12
|
|
|
29
|
%
|
||
NGPL
|
13
|
|
|
87
|
%
|
|
18
|
|
|
n/a
|
|||
CIG
|
10
|
|
|
9
|
%
|
|
8
|
|
|
5
|
%
|
||
Citrus(a)
|
10
|
|
|
20
|
%
|
|
—
|
|
|
—
|
%
|
||
SNG(a)
|
9
|
|
|
15
|
%
|
|
1
|
|
|
7
|
%
|
||
All others (including eliminations)
|
15
|
|
|
3
|
%
|
|
45
|
|
|
5
|
%
|
||
Total Natural Gas Pipelines
|
$
|
159
|
|
|
8
|
%
|
|
$
|
79
|
|
|
2
|
%
|
(a)
|
Equity investment.
|
•
|
increases of $21 million (51%) and $31 million (36%), respectively, from Hiland Midstream primarily due to higher natural gas margins resulting from increased gathered volumes, higher NGL sales prices, and higher crude oil margins driven by higher crude oil transport and sales volumes. The decrease in revenues of $22 million and $37 million, respectively, are primarily due to the $71 million and $160 million, respectively, effect of the January 1, 2018 adoption of Topic 606 as discussed in Note 8 “Revenue Recognition” to our consolidated financial statements, partially offset by an increase of $49 million and $123 million, respectively, in sales revenues, primarily natural gas liquids and crude oil;
|
•
|
increases of $20 million (19%) and $26 million (11%), respectively, from EPNG primarily due to higher transportation revenues driven by incremental Permian capacity sales;
|
•
|
increases of $8 million (10%) and $42 million (22%), respectively, from our Texas intrastate natural gas pipeline operations. The quarter-to-date increase was primarily due to new customer transportation service revenues, higher volumes with existing customers and higher sales margins primarily due to incremental volumes sold to certain customers partially offset by lower storage margins. In addition to the above mentioned factors, the year-to-date increase
|
•
|
increase of $7 million (2%) and decrease of $8 million (1%), respectively, from TGP. The quarter-to-date increase was primarily due to higher firm transportation revenues from expansion projects placed in service in latter part of 2017 and increased weather-related demand early in the quarter partially offset by lower capacity sales and higher Ad Valorem tax expense. The year-to-date decrease was primarily due to lower capacity sales and higher operations and maintenance expense and Ad Valorem tax expense partially offset by higher firm transportation revenues from 2017 expansion projects and higher weather related volume demand. The year-to-date revenues were also impacted by an increase in operational gas sales which was offset by an increase in associated gas cost for a net minimal impact on earnings;
|
•
|
increases of $7 million (41%) and $11 million (31%), respectively, from KinderHawk primarily due to higher gathering revenues driven by an increase in volumes as a result of incremental production from the Haynesville;
|
•
|
increases of $6 million (200%) and $13 million (87%), respectively, from NGPL due to lower interest expense and greater transport revenue resulting from increased weather-related demand in the first quarter and early in the second quarter of 2018 and power demand partially offset by cushion gas write-off;
|
•
|
increases of $6 million (12%) and $10 million (9%), respectively, from CIG primarily due to higher firm transportation revenues driven by growth in the Denver Julesburg basin along with increased capacity sales, expansions and usage revenues due to improved midcontinent pricing and lower operating costs largely due to decreased pipeline integrity costs;
|
•
|
increases of $4 million (13%) and $10 million (20%), respectively, from Citrus primarily due to lower income tax expense due to the 2017 Tax Reform. The quarter-to-date increase was partially offset by lower transportation revenues; and
|
•
|
increases of $3 million (12%) and $9 million (15%), respectively, from SNG. The quarter-to-date increase is primarily due to lower operations and maintenance expense due to timing of pipeline integrity projects and higher usage revenues due to additional firm transportation volumes. The year-to-date increase is primarily due to higher usage revenues from higher throughput and higher park and loan revenues both resulting from increased weather-related demand and lower interest expense resulting from lower debt balances and interest rates, and lower operations and maintenance expense.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions, except operating statistics)
|
||||||||||||||
Revenues(a)
|
$
|
250
|
|
|
$
|
307
|
|
|
$
|
554
|
|
|
$
|
610
|
|
Operating expenses(b)
|
(101
|
)
|
|
(95
|
)
|
|
(216
|
)
|
|
(192
|
)
|
||||
Gain on impairments and divestitures, net(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Earnings from equity investments
|
8
|
|
|
9
|
|
|
18
|
|
|
20
|
|
||||
Segment EBDA(b)
|
157
|
|
|
221
|
|
|
356
|
|
|
439
|
|
||||
Certain items(b)
|
64
|
|
|
(1
|
)
|
|
102
|
|
|
3
|
|
||||
Segment EBDA before certain items
|
$
|
221
|
|
|
$
|
220
|
|
|
$
|
458
|
|
|
$
|
442
|
|
|
|
|
|
|
|
|
|
||||||||
Change from prior period
|
Increase/(Decrease)
|
||||||||||||||
Revenues before certain items
|
$
|
29
|
|
|
9
|
%
|
|
$
|
63
|
|
|
10
|
%
|
||
Segment EBDA before certain items
|
$
|
1
|
|
|
—
|
%
|
|
$
|
16
|
|
|
4
|
%
|
||
|
|
|
|
|
|
|
|
||||||||
Southwest Colorado CO
2
production (gross)(Bcf/d)(c)
|
1.2
|
|
|
1.3
|
|
|
1.2
|
|
|
1.3
|
|
||||
Southwest Colorado CO
2
production (net)(Bcf/d)(c)
|
0.5
|
|
|
0.6
|
|
|
0.6
|
|
|
0.7
|
|
||||
SACROC oil production (gross)(MBbl/d)(d)
|
29.2
|
|
|
27.4
|
|
|
29.4
|
|
|
27.9
|
|
||||
SACROC oil production (net)(MBbl/d)(e)
|
24.3
|
|
|
22.8
|
|
|
24.5
|
|
|
23.2
|
|
||||
Yates oil production (gross)(MBbl/d)(d)
|
17.1
|
|
|
17.4
|
|
|
17.0
|
|
|
17.6
|
|
||||
Yates oil production (net)(MBbl/d)(e)
|
7.4
|
|
|
7.7
|
|
|
7.6
|
|
|
7.8
|
|
||||
Katz, Goldsmith and Tall Cotton oil production (gross)(MBbl/d)(d)
|
8.1
|
|
|
8.0
|
|
|
8.4
|
|
|
7.6
|
|
||||
Katz, Goldsmith and Tall Cotton oil production (net)(MBbl/d)(e)
|
6.9
|
|
|
6.7
|
|
|
7.1
|
|
|
6.5
|
|
||||
NGL sales volumes (net)(MBbl/d)(e)
|
10.1
|
|
|
9.9
|
|
|
10.1
|
|
|
10.0
|
|
||||
Realized weighted-average oil price per Bbl(f)
|
$
|
58.08
|
|
|
$
|
57.80
|
|
|
$
|
58.90
|
|
|
$
|
57.97
|
|
Realized weighted-average NGL price per Bbl(g)
|
$
|
32.88
|
|
|
$
|
22.47
|
|
|
$
|
31.64
|
|
|
$
|
23.49
|
|
(a)
|
Three and six month 2018 amounts include unrealized losses of $85 million and $123 million, respectively, and the three and six month 2017 amounts include unrealized losses of $8 million and $13 million, respectively, related to derivative contracts used to hedge forecasted commodity sales. Three and six months 2017 amounts also include an increase in revenues of $9 million related to the settlement of a CO
2
customer sales contract.
|
(b)
|
In addition to the revenue certain items described in footnote (a) above: three and six month 2018 amounts also include increases in earnings for both periods of $21 million as a result of a severance tax refund and six month 2017 amount also includes a $1 million decrease in expense related to source and transportation project write-offs.
|
(c)
|
Includes McElmo Dome and Doe Canyon sales volumes.
|
(d)
|
Represents 100% of the production from the field. We own an approximately 97% working interest in the SACROC unit, an approximately 50% working interest in the Yates unit, an approximately 99% working interest in the Katz unit and a 99% working interest in the Goldsmith Landreth unit and a 100% working interest in the Tall Cotton field.
|
(e)
|
Net after royalties and outside working interests.
|
(f)
|
Includes all crude oil production properties.
|
(g)
|
Includes all NGL sales.
|
|
Segment EBDA before certain items
increase/(decrease)
|
|
Revenues before
certain items
increase/(decrease)
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||
Source and Transportation Activities
|
$
|
(10
|
)
|
|
(12
|
)%
|
|
$
|
6
|
|
|
7
|
%
|
Oil and Gas Producing Activities
|
11
|
|
|
8
|
%
|
|
21
|
|
|
9
|
%
|
||
Intrasegment eliminations
|
—
|
|
|
—
|
%
|
|
2
|
|
|
20
|
%
|
||
Total CO
2
|
$
|
1
|
|
|
—
|
%
|
|
$
|
29
|
|
|
9
|
%
|
|
Segment EBDA before certain items
increase/(decrease)
|
|
Revenues before
certain items
increase/(decrease)
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||
Source and Transportation Activities
|
$
|
(15
|
)
|
|
(9
|
)%
|
|
$
|
15
|
|
|
9
|
%
|
Oil and Gas Producing Activities
|
31
|
|
|
11
|
%
|
|
44
|
|
|
10
|
%
|
||
Intrasegment eliminations
|
—
|
|
|
—
|
%
|
|
4
|
|
|
19
|
%
|
||
Total CO
2
|
$
|
16
|
|
|
4
|
%
|
|
$
|
63
|
|
|
10
|
%
|
•
|
decreases of $10 million (12%) and $15 million (9%), respectively, from our Source and Transportation activities primarily due to (i)
lower CO
2
sales of $4 million and $8 million, respectively, driven by lower volumes of $10 million and $18 million, respectively, partially offset by higher contract sales prices of $6 million and $10 million, respectively; (ii) lower other revenues of $2 million and $3 million, respectively; (iii) higher Ad Valorem tax expense of $2 million for both periods; and (iv) $2 million decreased earnings from an equity investee for both periods. The increases in revenues of $6 million and $15 million, respectively, are primarily due to the effect of the January 1, 2018 adoption of Topic 606, which increased both revenues and operating expenses (costs of sales) by $12 million and $26 million, respectively, as discussed in Note 8 “Revenue Recognition” to our consolidated financial statements; and
|
•
|
increases of $11 million (8%) and $31 million (11%), respectively, from our Oil and Gas Producing activities primarily due to increased revenues of $21 million and $44 million, respectively, driven by higher commodity prices of $13 million and $25 million, respectively, and higher volumes of $8 million and $19 million, respectively, partially offset by increases of $7 million and $10 million, respectively, in operating expenses and higher severance tax expense for both periods of $3 million.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions, except operating statistics)
|
||||||||||||||
Revenues(a)
|
$
|
513
|
|
|
$
|
487
|
|
|
$
|
1,006
|
|
|
$
|
974
|
|
Operating expenses(b)
|
(190
|
)
|
|
(194
|
)
|
|
(396
|
)
|
|
(373
|
)
|
||||
Loss on impairments and divestitures, net(b)
|
(54
|
)
|
|
—
|
|
|
(54
|
)
|
|
(7
|
)
|
||||
Other income
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Earnings from equity investments
|
5
|
|
|
7
|
|
|
12
|
|
|
12
|
|
||||
Other, net
|
—
|
|
|
3
|
|
|
1
|
|
|
4
|
|
||||
Segment EBDA(b)
|
274
|
|
|
304
|
|
|
569
|
|
|
611
|
|
||||
Certain items(b)
|
34
|
|
|
(5
|
)
|
|
35
|
|
|
(10
|
)
|
||||
Segment EBDA before certain items
|
$
|
308
|
|
|
$
|
299
|
|
|
$
|
604
|
|
|
$
|
601
|
|
|
|
|
|
|
|
|
|
||||||||
Change from prior period
|
Increase/(Decrease)
|
||||||||||||||
Revenues before certain items
|
$
|
28
|
|
|
6
|
%
|
|
$
|
35
|
|
|
4
|
%
|
||
Segment EBDA before certain items
|
$
|
9
|
|
|
3
|
%
|
|
$
|
3
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
||||||||
Bulk transload tonnage (MMtons)
|
16.9
|
|
|
14.6
|
|
|
31.3
|
|
|
29.0
|
|
||||
Ethanol (MMBbl)
|
16.3
|
|
|
15.8
|
|
|
31.2
|
|
|
33.4
|
|
||||
Liquids leasable capacity (MMBbl)
|
88.9
|
|
|
85.8
|
|
|
88.9
|
|
|
85.8
|
|
||||
Liquids utilization %(c)
|
90.7
|
%
|
|
94.5
|
%
|
|
90.7
|
%
|
|
94.5
|
%
|
(a)
|
Three and six month 2018 amounts include increases in revenue of $1 million and $2 million, respectively, and three and six month 2017 amounts include increases in revenue of $3 million and $5 million, respectively, from the amortization of a fair value adjustment (associated with the below market contracts assumed upon acquisition) from our Jones Act tankers.
|
(b)
|
In addition to the revenue certain items described in footnote (a) above: three and six month 2018 amounts also include losses on impairments and divestitures, net of $54 million for both periods and decreases in expense of $19 million and $17 million, respectively, related to hurricane damage insurance recoveries, net of repair costs. Three and six month 2017 amounts also include (i) $1 million and $8 million, respectively, related to losses on impairments and divestitures, net and (ii) decreases in expense of $3 million for both periods related to other certain items, and six month 2017 amount also includes a decrease in expense of $10 million related to accrued dredging costs.
|
(c)
|
The ratio of our actual leased capacity to our estimated capacity.
|
|
Segment EBDA before certain items
increase/(decrease)
|
|
Revenues before
certain items
increase/(decrease)
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||
Marine Operations
|
$
|
5
|
|
|
11
|
%
|
|
$
|
13
|
|
|
18
|
%
|
Gulf Liquids
|
5
|
|
|
7
|
%
|
|
9
|
|
|
9
|
%
|
||
Mid Atlantic
|
5
|
|
|
42
|
%
|
|
4
|
|
|
16
|
%
|
||
Alberta Canada
|
4
|
|
|
11
|
%
|
|
8
|
|
|
22
|
%
|
||
Northeast
|
(7
|
)
|
|
(23
|
)%
|
|
(6
|
)
|
|
(11
|
)%
|
||
Gulf Central
|
(5
|
)
|
|
(21
|
)%
|
|
(5
|
)
|
|
(14
|
)%
|
||
All others (including intrasegment eliminations)
|
2
|
|
|
3
|
%
|
|
5
|
|
|
3
|
%
|
||
Total Terminals
|
$
|
9
|
|
|
3
|
%
|
|
$
|
28
|
|
|
6
|
%
|
|
Segment EBDA before certain items
increase/(decrease)
|
|
Revenues before
certain items
increase/(decrease)
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||
Marine Operations
|
$
|
8
|
|
|
9
|
%
|
|
$
|
30
|
|
|
21
|
%
|
Gulf Liquids
|
7
|
|
|
5
|
%
|
|
15
|
|
|
8
|
%
|
||
Mid Atlantic
|
6
|
|
|
22
|
%
|
|
6
|
|
|
12
|
%
|
||
Alberta Canada
|
8
|
|
|
12
|
%
|
|
13
|
|
|
17
|
%
|
||
Northeast
|
(10
|
)
|
|
(16
|
)%
|
|
(8
|
)
|
|
(8
|
)%
|
||
Gulf Central
|
(11
|
)
|
|
(22
|
)%
|
|
(11
|
)
|
|
(16
|
)%
|
||
All others (including intrasegment eliminations)
|
(5
|
)
|
|
(3
|
)%
|
|
(10
|
)
|
|
(3
|
)%
|
||
Total Terminals
|
$
|
3
|
|
|
—
|
%
|
|
$
|
35
|
|
|
4
|
%
|
•
|
increases of $5 million (11%) and $8 million (9%), respectively, from our Marine Operations related to the incremental earnings from the March 2017, June 2017, July 2017 and December 2017 deliveries of the Jones Act tankers, the
American Freedom
,
Palmetto State, American Liberty
and
American Pride,
respectively, partially offset by decreased contributions from existing Jones Act tankers driven by lower charter rates;
|
•
|
increases of $5 million (7%) and $7 million (5%), respectively, from our Gulf Liquids terminals primarily driven by contributions from expansion projects at our Pasadena Terminal and the Kinder Morgan Export Terminal as well as organic volume growth at several of our Houston Ship Channel locations;
|
•
|
increases of $5 million (42%) and $6 million (22%), respectively, from our Mid Atlantic terminals primarily due to strong growth in coal volumes at our Pier IX facility;
|
•
|
increases of $4 million (11%) and $8 million (12%), respectively, from our Alberta Canada terminals primarily due to placing our Base Line Terminal joint venture into service in January 2018, higher rates on re-contracted tank leases at our North 40 and Edmonton South terminals, favorable foreign exchange rates and higher revenues at our Edmonton Rail Terminal joint venture primarily due to an adjustment in terminal fees in connection with a favorable arbitration ruling;
|
•
|
decreases of $7 million (23%) and $10 million (16%), respectively, from our Northeast terminals primarily due to low utilization at our Staten Island terminal; and
|
•
|
decreases of $5 million (21%) and $11 million (22%), respectively, from our Gulf Central terminals primarily related to the sale of a 40% membership interest in the Deeprock Development joint venture in July 2017.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions, except operating statistics)
|
||||||||||||||
Revenues
|
$
|
442
|
|
|
$
|
418
|
|
|
$
|
841
|
|
|
$
|
820
|
|
Operating expenses(a)
|
(144
|
)
|
|
(100
|
)
|
|
(302
|
)
|
|
(229
|
)
|
||||
Other income (expense)
|
2
|
|
|
(1
|
)
|
|
2
|
|
|
(1
|
)
|
||||
Earnings from equity investments
|
19
|
|
|
10
|
|
|
37
|
|
|
23
|
|
||||
Other, net
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Segment EBDA(a)
|
319
|
|
|
324
|
|
|
578
|
|
|
611
|
|
||||
Certain items(a)
|
(1
|
)
|
|
(34
|
)
|
|
30
|
|
|
(34
|
)
|
||||
Segment EBDA before certain items
|
$
|
318
|
|
|
$
|
290
|
|
|
$
|
608
|
|
|
$
|
577
|
|
|
|
|
|
|
|
|
|
||||||||
Change from prior period
|
Increase/(Decrease)
|
||||||||||||||
Revenues
|
$
|
24
|
|
|
6
|
%
|
|
$
|
21
|
|
|
3
|
%
|
||
Segment EBDA before certain items
|
$
|
28
|
|
|
10
|
%
|
|
$
|
31
|
|
|
5
|
%
|
||
|
|
|
|
|
|
|
|
||||||||
Gasoline (MBbl/d)(b)
|
1,082
|
|
|
1,059
|
|
|
1,031
|
|
|
1,026
|
|
||||
Diesel fuel (MBbl/d)
|
383
|
|
|
354
|
|
|
362
|
|
|
338
|
|
||||
Jet fuel (MBbl/d)
|
305
|
|
|
308
|
|
|
297
|
|
|
297
|
|
||||
Total refined product volumes (MBbl/d)(c)
|
1,770
|
|
|
1,721
|
|
|
1,690
|
|
|
1,661
|
|
||||
NGL (MBbl/d)(c)
|
121
|
|
|
121
|
|
|
119
|
|
|
114
|
|
||||
Crude and condensate (MBbl/d)(c)
|
349
|
|
|
331
|
|
|
339
|
|
|
340
|
|
||||
Total delivery volumes (MBbl/d)
|
2,240
|
|
|
2,173
|
|
|
2,148
|
|
|
2,115
|
|
||||
Ethanol (MBbl/d)(d)
|
129
|
|
|
118
|
|
|
124
|
|
|
114
|
|
(a)
|
Three and six month 2018 amounts include decreases in expense of $1 million for both periods related to other certain items. Six month 2018 amount also includes an increase in expense of $31 million associated with a certain Pacific operations litigation matter and three and six month 2017 amounts include a decrease in expense of a $34 million for both periods related to a right-of-way settlement.
|
(b)
|
Volumes include ethanol pipeline volumes.
|
(c)
|
Joint venture throughput is reported at our ownership share.
|
(d)
|
Represents total ethanol volumes, including ethanol pipeline volumes included in gasoline volumes above.
|
|
Segment EBDA before certain items
increase/(decrease)
|
|
Revenues before
certain items
increase/(decrease)
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||
Plantation Pipe Line
|
$
|
7
|
|
|
54
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Cochin pipeline
|
6
|
|
|
22
|
%
|
|
(2
|
)
|
|
(4
|
)%
|
||
South East Terminals
|
5
|
|
|
28
|
%
|
|
1
|
|
|
3
|
%
|
||
Transmix
|
3
|
|
|
43
|
%
|
|
9
|
|
|
20
|
%
|
||
Double H Pipeline
|
3
|
|
|
19
|
%
|
|
5
|
|
|
26
|
%
|
||
Crude & Condensate Pipeline
|
(1
|
)
|
|
(2
|
)%
|
|
7
|
|
|
11
|
%
|
||
All others (including eliminations)
|
5
|
|
|
3
|
%
|
|
4
|
|
|
2
|
%
|
||
Total Products Pipelines
|
$
|
28
|
|
|
10
|
%
|
|
$
|
24
|
|
|
6
|
%
|
|
Segment EBDA before certain items
increase/(decrease)
|
|
Revenues before
certain items
increase/(decrease)
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||
Plantation Pipe Line
|
$
|
10
|
|
|
34
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Cochin pipeline
|
11
|
|
|
22
|
%
|
|
1
|
|
|
1
|
%
|
||
South East Terminals
|
7
|
|
|
19
|
%
|
|
3
|
|
|
5
|
%
|
||
Transmix
|
3
|
|
|
18
|
%
|
|
3
|
|
|
3
|
%
|
||
Double H Pipeline
|
8
|
|
|
26
|
%
|
|
9
|
|
|
23
|
%
|
||
Crude & Condensate Pipeline
|
(11
|
)
|
|
(10
|
)%
|
|
—
|
|
|
—
|
%
|
||
All others (including eliminations)
|
3
|
|
|
1
|
%
|
|
5
|
|
|
1
|
%
|
||
Total Products Pipelines
|
$
|
31
|
|
|
5
|
%
|
|
$
|
21
|
|
|
3
|
%
|
•
|
increases of $7 million (54%) and $10 million (34%), respectively, from Plantation Pipe Line equity earnings primarily due to lower income tax expense due to the 2017 Tax Reform, lower operating expense attributable to a project write-off and legal settlement recorded in second quarter 2017 and lower depreciation expense related to a change in depreciation rate in 2017;
|
•
|
increases of $6 million (22%) and $11 million (22%), respectively, from Cochin pipeline primarily driven by integrity work during the first and second quarters of 2017 and foreign exchange transaction losses in second quarter of 2017 primarily related to an intercompany note receivable;
|
•
|
increases of $5 million (28%) and $7 million (19%), respectively, from South East Terminals primarily due to higher revenues as a result of higher volumes, placing an expansion project in service in third quarter 2017 and favorable pricing on physical gains of product;
|
•
|
increases of $3 million (43%) and $3 million (18%), respectively, from our Transmix processing operations was primarily due to higher product sales revenues driven by higher average price. The quarter-to-date increase was also impacted by higher volumes;
|
•
|
increases of $3 million (19%) and $8 million (26%), respectively, from Double H pipeline was primarily due to the accelerated recognition of deficiency revenue resulting from the January 1, 2018 adoption of Topic 606 and an increase in mainline revenues driven by an increase in volumes;
|
•
|
decreases of $1 million (2%) and $11 million (10%), respectively, from our Kinder Morgan Crude & Condensate Pipeline. The year-to-date decrease in earnings was primarily due to approximately $21 million lower services revenues driven by a decrease in pipeline throughput volumes partially offset by accelerated recognition of deficiency revenue resulting from the January 1, 2018 adoption of Topic 606. The quarter-to-date increase in revenues of $7 million is primarily due to the reclassification of gains on fuel reimbursements to revenues and accelerated recognition of deficiency revenue resulting from the adoption of Topic 606 and higher product sales (with minimal gross margin impact) partially offset by lower services revenues.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions, except operating statistics)
|
||||||||||||||
Revenues
|
$
|
65
|
|
|
$
|
60
|
|
|
$
|
126
|
|
|
$
|
119
|
|
Operating expenses
|
(29
|
)
|
|
(23
|
)
|
|
(53
|
)
|
|
(43
|
)
|
||||
Other, net
|
10
|
|
|
6
|
|
|
19
|
|
|
10
|
|
||||
Segment EBDA
|
$
|
46
|
|
|
$
|
43
|
|
|
$
|
92
|
|
|
$
|
86
|
|
|
|
|
|
|
|
|
|
||||||||
Change from prior period
|
Increase/(Decrease)
|
||||||||||||||
Revenues
|
$
|
5
|
|
|
8
|
%
|
|
$
|
7
|
|
|
6
|
%
|
||
Segment EBDA
|
$
|
3
|
|
|
7
|
%
|
|
$
|
6
|
|
|
7
|
%
|
||
|
|
|
|
|
|
|
|
||||||||
Transport volumes (MBbl/d)(a)
|
293
|
|
|
303
|
|
|
291
|
|
|
305
|
|
(a)
|
Represents Trans Mountain pipeline system volumes.
|
(a)
|
Three and six month 2018 amounts include increases in expense of (i) $10 million for both periods associated with an environmental reserve adjustment; (ii) $1 million and $7 million, respectively, related to certain corporate litigation matters; (iii) $2 million for both periods of asset sale related costs; and (iv) $1 million and $3 million, respectively, related to other certain items. Six month 2018 amount also includes a decease in expense of $12 million related to the release of certain sales and use tax reserves. Three and six month 2017 amounts include (i) increases in expense of $2 million and $7 million, respectively related to acquisition and asset sale related costs and (ii) decreases in expense of $6 million for both periods related to other certain items. Six month 2017 amount also includes an increase in expense of $2 million related to certain corporate legal matters.
|
(b)
|
Three and six month 2018 amounts include (i) decreases in interest expense of $8 million and $18 million, respectively, related to non-cash debt fair value adjustments associated with acquisitions; (ii) increases in interest expense of $3 million and $8 million, respectively, related to non-cash true-ups of our estimates of swap ineffectiveness; (iii) increases in interest expense of $46 million for both periods related to the write-off of capitalized KML credit facility fees; and (iv) decreases in interest expense of $2 million for both periods related to other certain items. Three and six month 2017 amounts include (i) decreases in interest expense of $14 million and $29 million, respectively, related to non-cash debt fair value adjustments associated with acquisitions; (ii) increases in interest expense of $1 million and $4 million, respectively, related to non-cash true-ups of our estimates of swap ineffectiveness; and (iii) increases in interest expense of $8 million for both periods related to other certain items.
|
|
Six Months Ended June 30, 2018
|
|
2018 Remaining
|
|
Total 2018
|
||||||
|
(In millions)
|
||||||||||
Sustaining capital expenditures(a)(b)(c)
|
$
|
277
|
|
|
$
|
387
|
|
|
$
|
664
|
|
KMI Discretionary capital investments(b)(d)(e)
|
$
|
1,017
|
|
|
$
|
1,370
|
|
|
$
|
2,387
|
|
KML Discretionary capital investments(b)(f)
|
$
|
302
|
|
|
$
|
42
|
|
|
$
|
344
|
|
(a)
|
Six
months ended June 30, 2018, 2018 Remaining, and Total 2018 amounts include $40 million, $70 million, and $110 million, respectively, for our proportionate share of (i) certain equity investee’s, (ii) KML’s; and (iii) certain consolidating joint venture subsidiaries’ sustaining capital expenditures.
|
(b)
|
Six months ended June 30, 2018 amount includes $33 million of net changes from accrued capital expenditures, contractor retainage, and other.
|
(c)
|
2018 remaining amount includes TMPL sustaining capital expenditures until the estimated Transaction close date.
|
(d)
|
Six months ended June 30, 2018 amount includes $50 million of our contributions to certain unconsolidated joint ventures for capital investments.
|
(e)
|
Amounts include our actual or estimated contributions to certain unconsolidated joint ventures, net of actual or estimated contributions from certain partners in non-wholly owned consolidated subsidiaries for capital investments.
|
(f)
|
Amounts exclude TMEP capital investments agreed to be covered under the TMPL Non-recourse Credit Agreement.
|
•
|
a $215 million increase associated with net changes in working capital items and non-current assets and liabilities, primarily driven, among other things, by an increase in cash related to gas in underground storage inventory, which
|
•
|
an $87 million increase in operating cash flow resulting from the combined effects of adjusting the $416 million decrease in net income for the period-to-period net increase in non-cash items including the following: (i) losses on impairments and divestitures, net and an equity investment (see discussion above in “—Results of Operations”); (ii) the change in fair market value of derivative contracts; (iii) DD&A expenses (including amortization of excess cost of equity investments); (iv) deferred income taxes; and (v) earnings from equity investments.
|
•
|
a $437 million decrease in cash used for contributions to equity investments primarily due to lower contributions we made to NGPL Holdings LLC, Fayetteville Express Pipeline LLC and Utopia Holding LLC in the 2018 period compared to the 2017 period; partially offset by,
|
•
|
a $137 million increase in capital expenditures in the 2018 period over the comparative 2017 period primarily due to higher expenditures related to construction projects in our Natural Gas Pipelines business segment and the TMEP, partially offset by lower expenditures in our Terminals business segment;
|
•
|
a $65 million reduction in distributions received from equity investments in excess of cumulative earnings, primarily driven by the lower distributions received from Midcontinent Express Pipeline LLC and Ruby Pipeline Holding Company, L.L.C. in the 2018 period compared to the 2017 period; and
|
•
|
a $65 million decrease in cash proceeds from sale of property, plant and equipment and other net assets in the 2018 period compared to the 2017 period.
|
•
|
a $1,247 million decrease in cash reflecting net proceeds we received from the KML IPO in May 2017;
|
•
|
a $318 million decrease in cash due to lower contributions received from EIG in the 2018 period compared to the 2017 period as the 2017 period included $386 million we received from EIG for our sale of a 49% partnership interest in ELC;
|
•
|
a $250 million increase in cash used in 2018 for common shares repurchased under our common share buy-back program; and
|
•
|
a $159 million increase in dividend payments to our common shareholders; partially offset by,
|
•
|
a $1,813 million net increase in cash related to debt activity as a result of higher net debt payments in the 2017 period compared to the 2018 period. See Note 4 “Debt” for further information regarding our debt activity.
|
Three months ended
|
|
Total quarterly dividend per share for the period
|
|
Date of declaration
|
|
Date of record
|
|
Date of dividend
|
||
December 31, 2017
|
|
$
|
0.125
|
|
|
January 17, 2018
|
|
January 31, 2018
|
|
February 15, 2018
|
March 31, 2018
|
|
$
|
0.20
|
|
|
April 18, 2018
|
|
April 30, 2018
|
|
May 15, 2018
|
June 30, 2018
|
|
$
|
0.20
|
|
|
July 18, 2018
|
|
July 31, 2018
|
|
August 15, 2018
|
Period
|
|
Total dividend per share for the period
|
|
Date of declaration
|
|
Date of record
|
|
Date of dividend
|
||
October 26, 2017 through January 25, 2018
|
|
$
|
24.375
|
|
|
October 18, 2017
|
|
January 11, 2018
|
|
January 26, 2018
|
January 26, 2018 through April 25, 2018
|
|
$
|
24.375
|
|
|
January 18, 2018
|
|
April 11, 2018
|
|
April 26, 2018
|
April 26, 2018 through July 25, 2018
|
|
$
|
24.375
|
|
|
April 18, 2018
|
|
July 11, 2018
|
|
July 26, 2018
|
Exhibit
Number
Description
|
|||
10.1
|
|
|
|
|
|
|
|
10.2
|
|
|
|
|
|
|
|
10.3
|
|
|
|
|
|
|
|
12.1
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
101
|
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) our Consolidated Statements of Income for the three and six months ended June 30, 2018 and 2017; (ii) our Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017; (iii) our Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017; (iv) our Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017; (v) our Consolidated Statements of Stockholders’ Equity for the six months ended June 30, 2018 and 2017; and (vi) the notes to our Consolidated Financial Statements.
|
|
KINDER MORGAN, INC.
|
|
|
|
Registrant
|
Date:
|
July 20, 2018
|
|
By:
|
|
/s/ David P. Michels
|
|
|
|
|
|
David P. Michels
Vice President and Chief Financial Officer
(principal financial and accounting officer)
|
By:
|
/s/ Anthony B. Ashley
|
By:
|
/s/ Anthony B. Ashley
|
Issuer
|
|
Indebtedness
|
|
Maturity
|
Kinder Morgan, Inc.
|
|
3.05% notes
|
|
December 1, 2019
|
Kinder Morgan, Inc.
|
|
6.50% bonds
|
|
September 15, 2020
|
Kinder Morgan, Inc.
|
|
5.00% notes
|
|
February 15, 2021
|
Kinder Morgan, Inc.
|
|
1.500% notes
|
|
March 16, 2022
|
Kinder Morgan, Inc.
|
|
3.150% bonds
|
|
January 15, 2023
|
Kinder Morgan, Inc.
|
|
Floating rate bonds
|
|
January 15, 2023
|
Kinder Morgan, Inc.
|
|
5.625% notes
|
|
November 15, 2023
|
Kinder Morgan, Inc.
|
|
4.30% notes
|
|
June 1, 2025
|
Kinder Morgan, Inc.
|
|
6.70% bonds (Coastal)
|
|
February 15, 2027
|
Kinder Morgan, Inc.
|
|
2.250% notes
|
|
March 16, 2027
|
Kinder Morgan, Inc.
|
|
6.67% debentures
|
|
November 1, 2027
|
Kinder Morgan, Inc.
|
|
7.25% debentures
|
|
March 1, 2028
|
Kinder Morgan, Inc.
|
|
4.30% notes
|
|
March 1, 2028
|
Kinder Morgan, Inc.
|
|
6.95% bonds (Coastal)
|
|
June 1, 2028
|
Kinder Morgan, Inc.
|
|
8.05% bonds
|
|
October 15, 2030
|
Kinder Morgan, Inc.
|
|
7.80% bonds
|
|
August 1, 2031
|
Kinder Morgan, Inc.
|
|
7.75% bonds
|
|
January 15, 2032
|
Kinder Morgan, Inc.
|
|
5.30% notes
|
|
December 1, 2034
|
Kinder Morgan, Inc.
|
|
7.75% bonds (Coastal)
|
|
October 15, 2035
|
Kinder Morgan, Inc.
|
|
6.40% notes
|
|
January 5, 2036
|
Kinder Morgan, Inc.
|
|
7.42% bonds (Coastal)
|
|
February 15, 2037
|
Kinder Morgan, Inc.
|
|
5.55% notes
|
|
June 1, 2045
|
Kinder Morgan, Inc.
|
|
5.050% notes
|
|
February 15, 2046
|
Kinder Morgan, Inc.
|
|
5.20% notes
|
|
March 1, 2048
|
Kinder Morgan, Inc.
|
|
7.45% debentures
|
|
March 1, 2098
|
Kinder Morgan, Inc.
|
|
$100 Million Letter of Credit Facility
|
|
January 31, 2019
|
Kinder Morgan Energy Partners, L.P.
|
|
9.00% bonds
|
|
February 1, 2019
|
Kinder Morgan Energy Partners, L.P.
|
|
2.65% bonds
|
|
February 1, 2019
|
Kinder Morgan Energy Partners, L.P.
|
|
6.85% bonds
|
|
February 15, 2020
|
Kinder Morgan Energy Partners, L.P.
|
|
5.30% bonds
|
|
September 15, 2020
|
Kinder Morgan Energy Partners, L.P.
|
|
5.80% bonds
|
|
March 1, 2021
|
Kinder Morgan Energy Partners, L.P.
|
|
3.50% bonds
|
|
March 1, 2021
|
Kinder Morgan Energy Partners, L.P.
|
|
4.15% bonds
|
|
March 1, 2022
|
Kinder Morgan Energy Partners, L.P.
|
|
3.95% bonds
|
|
September 1, 2022
|
Kinder Morgan Energy Partners, L.P.
|
|
3.45% bonds
|
|
February 15, 2023
|
Kinder Morgan Energy Partners, L.P.
|
|
3.50% bonds
|
|
September 1, 2023
|
Kinder Morgan Energy Partners, L.P.
|
|
4.15% bonds
|
|
February 1, 2024
|
Kinder Morgan Energy Partners, L.P.
|
|
4.25% bonds
|
|
September 1, 2024
|
Kinder Morgan Energy Partners, L.P.
|
|
7.40% bonds
|
|
March 15, 2031
|
Kinder Morgan Energy Partners, L.P.
|
|
7.75% bonds
|
|
March 15, 2032
|
Kinder Morgan Energy Partners, L.P.
|
|
7.30% bonds
|
|
August 15, 2033
|
Kinder Morgan Energy Partners, L.P.
|
|
5.80% bonds
|
|
March 15, 2035
|
Kinder Morgan Energy Partners, L.P.
|
|
6.50% bonds
|
|
February 1, 2037
|
Kinder Morgan Energy Partners, L.P.
|
|
6.95% bonds
|
|
January 15, 2038
|
Kinder Morgan Energy Partners, L.P.
|
|
6.50% bonds
|
|
September 1, 2039
|
|
|
Schedule I
|
||
|
|
(Guaranteed Obligations)
|
||
|
|
Current as of: June 30, 2018
|
||
Issuer
|
|
Indebtedness
|
|
Maturity
|
Kinder Morgan Energy Partners, L.P.
|
|
6.55% bonds
|
|
September 15, 2040
|
Kinder Morgan Energy Partners, L.P.
|
|
6.375% bonds
|
|
March 1, 2041
|
Kinder Morgan Energy Partners, L.P.
|
|
5.625% bonds
|
|
September 1, 2041
|
Kinder Morgan Energy Partners, L.P.
|
|
5.00% bonds
|
|
August 15, 2042
|
Kinder Morgan Energy Partners, L.P.
|
|
5.00% bonds
|
|
March 1, 2043
|
Kinder Morgan Energy Partners, L.P.
|
|
5.50% bonds
|
|
March 1, 2044
|
Kinder Morgan Energy Partners, L.P.
|
|
5.40% bonds
|
|
September 1, 2044
|
Kinder Morgan Energy Partners, L.P.
(1)
|
|
6.50% bonds
|
|
April 1, 2020
|
Kinder Morgan Energy Partners, L.P.
(1)
|
|
5.00% bonds
|
|
October 1, 2021
|
Kinder Morgan Energy Partners, L.P.
(1)
|
|
4.30% bonds
|
|
May 1, 2024
|
Kinder Morgan Energy Partners, L.P.
(1)
|
|
7.50% bonds
|
|
November 15, 2040
|
Kinder Morgan Energy Partners, L.P.
(1)
|
|
4.70% bonds
|
|
November 1, 2042
|
Tennessee Gas Pipeline Company, L.L.C.
|
|
7.00% bonds
|
|
March 15, 2027
|
Tennessee Gas Pipeline Company, L.L.C.
|
|
7.00% bonds
|
|
October 15, 2028
|
Tennessee Gas Pipeline Company, L.L.C.
|
|
8.375% bonds
|
|
June 15, 2032
|
Tennessee Gas Pipeline Company, L.L.C.
|
|
7.625% bonds
|
|
April 1, 2037
|
El Paso Natural Gas Company, L.L.C.
|
|
8.625% bonds
|
|
January 15, 2022
|
El Paso Natural Gas Company, L.L.C.
|
|
7.50% bonds
|
|
November 15, 2026
|
El Paso Natural Gas Company, L.L.C.
|
|
8.375% bonds
|
|
June 15, 2032
|
Colorado Interstate Gas Company, L.L.C.
|
|
4.15% notes
|
|
August 15, 2026
|
Colorado Interstate Gas Company, L.L.C.
|
|
6.85% bonds
|
|
June 15, 2037
|
El Paso Tennessee Pipeline Co. L.L.C.
|
|
7.25% bonds
|
|
December 15, 2025
|
Other
|
|
Cora industrial revenue bonds
|
|
April 1, 2024
|
|
|
|
|
|
_________________________________________________
(1)
The original issuer, El Paso Pipeline Partners, L.P. merged with and into Kinder Morgan Energy
Partners, L.P. effective January 1, 2015.
|
|
|
Schedule I
|
||
|
|
(Guaranteed Obligations)
|
||
|
|
Current as of: June 30, 2018
|
Hedging Agreements
1
|
|
|
|
|
Issuer
|
|
Guaranteed Party
|
|
Date
|
Kinder Morgan, Inc.
|
|
Bank of America, N.A.
|
|
January 4, 2018
|
Kinder Morgan, Inc.
|
|
BNP Paribas
|
|
September 15, 2016
|
Kinder Morgan, Inc.
|
|
Citibank, N.A.
|
|
March 16, 2017
|
Kinder Morgan, Inc.
|
|
J. Aron & Company
|
|
December 23, 2011
|
Kinder Morgan, Inc.
|
|
SunTrust Bank
|
|
August 29, 2001
|
Kinder Morgan, Inc.
|
|
Barclays Bank PLC
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
Bank of Tokyo-Mitsubishi, Ltd., New York Branch
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
Canadian Imperial Bank of Commerce
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
Compass Bank
|
|
March 24, 2015
|
Kinder Morgan, Inc.
|
|
Credit Agricole Corporate and Investment
Bank
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
Credit Suisse International
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
Deutsche Bank AG
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
ING Capital Markets LLC
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
JPMorgan Chase Bank, N.A.
|
|
February 19, 2015
|
Kinder Morgan, Inc.
|
|
Mizuho Capital Markets Corporation
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
Royal Bank of Canada
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
SMBC Capital Markets, Inc.
|
|
April 26, 2017
|
Kinder Morgan, Inc.
|
|
The Bank of Nova Scotia
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
The Royal Bank of Scotland PLC
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
Societe Generale
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
The Toronto-Dominion Bank
|
|
October 2, 2017
|
Kinder Morgan, Inc.
|
|
UBS AG
|
|
November 26, 2014
|
Kinder Morgan, Inc.
|
|
Wells Fargo Bank, N.A.
|
|
November 26, 2014
|
Kinder Morgan Energy Partners, L.P.
|
|
Bank of America, N.A.
|
|
April 14, 1999
|
Kinder Morgan Energy Partners, L.P.
|
|
Bank of Tokyo-Mitsubishi, Ltd., New York Branch
|
|
November 23, 2004
|
Kinder Morgan Energy Partners, L.P.
|
|
Barclays Bank PLC
|
|
November 18, 2003
|
Kinder Morgan Energy Partners, L.P.
|
|
Canadian Imperial Bank of Commerce
|
|
August 4, 2011
|
Kinder Morgan Energy Partners, L.P.
|
|
Citibank, N.A.
|
|
March 14, 2002
|
Kinder Morgan Energy Partners, L.P.
|
|
Credit Agricole Corporate and Investment Bank
|
|
June 20, 2014
|
Kinder Morgan Energy Partners, L.P.
|
|
Credit Suisse International
|
|
May 14, 2010
|
Kinder Morgan Energy Partners, L.P.
|
|
Deutsche Bank AG
|
|
April 2, 2009
|
Kinder Morgan Energy Partners, L.P.
|
|
ING Capital Markets LLC
|
|
September 21, 2011
|
_________________________________________________
1
Guaranteed Obligations with respect to Hedging Agreements include International Swaps and
Derivatives Association Master Agreements (“ISDAs”) and all transactions entered into pursuant to any ISDA listed on this Schedule I.
|
|
|
Schedule I
|
||
|
|
(Guaranteed Obligations)
|
||
|
|
Current as of: June 30, 2018
|
||
Hedging Agreements
1
|
|
|
|
|
Issuer
|
|
Guaranteed Party
|
|
Date
|
Kinder Morgan Energy Partners, L.P.
|
|
J. Aron & Company
|
|
November 11, 2004
|
Kinder Morgan Energy Partners, L.P.
|
|
JPMorgan Chase Bank
|
|
August 29, 2001
|
Kinder Morgan Energy Partners, L.P.
|
|
Mizuho Capital Markets Corporation
|
|
July 11, 2014
|
Kinder Morgan Energy Partners, L.P.
|
|
Morgan Stanley Capital Services Inc.
|
|
March 10, 2010
|
Kinder Morgan Energy Partners, L.P.
|
|
Royal Bank of Canada
|
|
March 12, 2009
|
Kinder Morgan Energy Partners, L.P.
|
|
The Royal Bank of Scotland PLC
|
|
March 20, 2009
|
Kinder Morgan Energy Partners, L.P.
|
|
The Bank of Nova Scotia
|
|
August 14, 2003
|
Kinder Morgan Energy Partners, L.P.
|
|
Societe Generale
|
|
July 18, 2014
|
Kinder Morgan Energy Partners, L.P.
|
|
SunTrust Bank
|
|
March 14, 2002
|
Kinder Morgan Energy Partners, L.P.
|
|
UBS AG
|
|
February 23, 2011
|
Kinder Morgan Energy Partners, L.P.
|
|
Wells Fargo Bank, N.A.
|
|
July 31, 2007
|
Kinder Morgan Texas Pipeline LLC
|
|
Barclays Bank PLC
|
|
January 10, 2003
|
Kinder Morgan Texas Pipeline LLC
|
|
BNP Paribas
|
|
March 2, 2005
|
Kinder Morgan Texas Pipeline LLC
|
|
Canadian Imperial Bank of Commerce
|
|
December 18, 2006
|
Kinder Morgan Texas Pipeline LLC
|
|
Citibank, N.A.
|
|
February 22, 2005
|
Kinder Morgan Texas Pipeline LLC
|
|
Credit Suisse International
|
|
August 31, 2012
|
Kinder Morgan Texas Pipeline LLC
|
|
Deutsche Bank AG
|
|
June 13, 2007
|
Kinder Morgan Texas Pipeline LLC
|
|
ING Capital Markets LLC
|
|
April 17, 2014
|
Kinder Morgan Production LLC
|
|
J. Aron & Company
|
|
June 12, 2006
|
Kinder Morgan Texas Pipeline LLC
|
|
J. Aron & Company
|
|
June 8, 2000
|
Kinder Morgan Texas Pipeline LLC
|
|
JPMorgan Chase Bank, N.A.
|
|
September 7, 2006
|
Kinder Morgan Texas Pipeline LLC
|
|
Macquarie Bank Limited
|
|
September 20, 2010
|
Kinder Morgan Texas Pipeline LLC
|
|
Merrill Lynch Commodities, Inc.
|
|
October 24, 2001
|
Kinder Morgan Texas Pipeline LLC
|
|
Morgan Stanley Capital Group Inc.
|
|
January 15, 2004
|
Kinder Morgan Texas Pipeline LLC
|
|
Natixis
|
|
June 13, 2011
|
Kinder Morgan Texas Pipeline LLC
|
|
Phillips 66 Company
|
|
March 30, 2015
|
Kinder Morgan Texas Pipeline LLC
|
|
Royal Bank of Canada
|
|
May 6, 2009
|
Kinder Morgan Texas Pipeline LLC
|
|
The Bank of Nova Scotia
|
|
May 8, 2014
|
Kinder Morgan Texas Pipeline LLC
|
|
Societe Generale
|
|
January 14, 2003
|
Kinder Morgan Texas Pipeline LLC
|
|
Wells Fargo Bank, N.A.
|
|
June 1, 2013
|
Copano Risk Management, LLC
|
|
Citibank, N.A.
|
|
July 21, 2008
|
Copano Risk Management, LLC
|
|
J. Aron & Company
|
|
December 12, 2005
|
Copano Risk Management, LLC
|
|
Morgan Stanley Capital Group Inc.
|
|
May 4, 2007
|
Copano Risk Management, LLC
|
|
Wells Fargo Bank, N.A.
|
|
October 19, 2007
|
_________________________________________________
1
Guaranteed Obligations with respect to Hedging Agreements include International Swaps and
Derivatives Association Master Agreements (“ISDAs”) and all transactions entered into pursuant to any ISDA listed on this Schedule I.
|
SCHEDULE II
Guarantors
Current as of: June 30, 2018
|
||
Agnes B Crane, LLC
|
|
Copano/Webb-Duval Pipeline LLC
|
American Petroleum Tankers II LLC
|
|
CPNO Services LLC
|
American Petroleum Tankers III LLC
|
|
Dakota Bulk Terminal LLC
|
American Petroleum Tankers IV LLC
|
|
Delta Terminal Services LLC
|
American Petroleum Tankers LLC
|
|
Eagle Ford Gathering LLC
|
American Petroleum Tankers Parent LLC
|
|
El Paso Cheyenne Holdings, L.L.C.
|
American Petroleum Tankers V LLC
|
|
El Paso Citrus Holdings, Inc.
|
American Petroleum Tankers VI LLC
|
|
El Paso CNG Company, L.L.C.
|
American Petroleum Tankers VII LLC
|
|
El Paso Energy Service Company, L.L.C.
|
American Petroleum Tankers VIII LLC
|
|
El Paso LLC
|
American Petroleum Tankers IX LLC
|
|
El Paso Midstream Group LLC
|
American Petroleum Tankers X LLC
|
|
El Paso Natural Gas Company, L.L.C.
|
American Petroleum Tankers XI LLC
|
|
El Paso Noric Investments III, L.L.C.
|
APT Florida LLC
|
|
El Paso Ruby Holding Company, L.L.C.
|
APT Intermediate Holdco LLC
|
|
El Paso Tennessee Pipeline Co., L.L.C.
|
APT New Intermediate Holdco LLC
|
|
Elba Express Company, L.L.C.
|
APT Pennsylvania LLC
|
|
Elizabeth River Terminals LLC
|
APT Sunshine State LLC
|
|
Emory B Crane, LLC
|
Betty Lou LLC
|
|
EP Ruby LLC
|
Camino Real Gathering Company, L.L.C.
|
|
EPBGP Contracting Services LLC
|
Cantera Gas Company LLC
|
|
EPTP Issuing Corporation
|
CDE Pipeline LLC
|
|
Frank L. Crane, LLC
|
Central Florida Pipeline LLC
|
|
General Stevedores GP, LLC
|
Cheyenne Plains Gas Pipeline Company, L.L.C.
|
|
General Stevedores Holdings LLC
|
CIG Gas Storage Company LLC
|
|
Glenpool West Gathering LLC
|
CIG Pipeline Services Company, L.L.C.
|
|
Harrah Midstream LLC
|
Colorado Interstate Gas Company, L.L.C.
|
|
HBM Environmental LLC
|
Colorado Interstate Issuing Corporation
|
|
Hiland Crude, LLC
|
Copano Double Eagle LLC
|
|
Hiland Partners Finance Corp.
|
Copano Energy Finance Corporation
|
|
Hiland Partners Holdings LLC
|
Copano Energy Services/Upper Gulf Coast LLC
|
|
ICPT, L.L.C
|
Copano Energy, L.L.C.
|
|
Independent Trading & Transportation
|
Copano Field Services GP, L.L.C.
|
|
Company I, L.L.C.
|
Copano Field Services/North Texas, L.L.C.
|
|
JV Tanker Charterer LLC
|
Copano Field Services/South Texas LLC
|
|
Kinder Morgan 2-Mile LLC
|
Copano Field Services/Upper Gulf Coast LLC
|
|
Kinder Morgan Administrative Services Tampa LLC
|
Copano Liberty, LLC
|
|
Kinder Morgan Altamont LLC
|
Copano Liquids Marketing LLC
|
|
Kinder Morgan Baltimore Transload Terminal
|
Copano NGL Services (Markham), L.L.C.
|
|
LLC
|
Copano NGL Services LLC
|
|
Kinder Morgan Battleground Oil LLC
|
Copano Pipelines Group, L.L.C.
|
|
Kinder Morgan Border Pipeline LLC
|
Copano Pipelines/North Texas, L.L.C.
|
|
Kinder Morgan Bulk Terminals LLC
|
Copano Pipelines/Rocky Mountains, LLC
|
|
Kinder Morgan Carbon Dioxide Transportation
|
Copano Pipelines/South Texas LLC
|
|
Company
|
Copano Pipelines/Upper Gulf Coast LLC
|
|
Kinder Morgan CO2 Company, L.P.
|
Copano Processing LLC
|
|
Kinder Morgan Cochin LLC
|
Copano Risk Management LLC
|
|
Kinder Morgan Commercial Services LLC
|
|
|
Schedule II
|
|
|
(Guarantors)
|
|
|
Current as of: June 30, 2018
|
|
|
|
Kinder Morgan Contracting Services LLC
|
|
Kinder Morgan Seven Oaks LLC
|
Kinder Morgan Crude & Condensate LLC
|
|
Kinder Morgan SNG Operator LLC
|
Kinder Morgan Crude Marketing LLC
|
|
Kinder Morgan Southeast Terminals LLC
|
Kinder Morgan Crude Oil Pipelines LLC
|
|
Kinder Morgan Scurry Connector LLC
|
Kinder Morgan Crude to Rail LLC
|
|
Kinder Morgan Tank Storage Terminals LLC
|
Kinder Morgan Cushing LLC
|
|
Kinder Morgan Tejas Pipeline LLC
|
Kinder Morgan Dallas Fort Worth Rail Terminal
|
|
Kinder Morgan Terminals, Inc.
|
LLC
|
|
Kinder Morgan Terminals Wilmington LLC
|
Kinder Morgan Endeavor LLC
|
|
Kinder Morgan Texas Pipeline LLC
|
Kinder Morgan Energy Partners, L.P.
|
|
Kinder Morgan Texas Terminals, L.P.
|
Kinder Morgan EP Midstream LLC
|
|
Kinder Morgan Transmix Company, LLC
|
Kinder Morgan Finance Company LLC
|
|
Kinder Morgan Treating LP
|
Kinder Morgan Freedom Pipeline LLC
|
|
Kinder Morgan Urban Renewal, L.L.C.
|
Kinder Morgan Galena Park West LLC
|
|
Kinder Morgan Utica LLC
|
Kinder Morgan IMT Holdco LLC
|
|
Kinder Morgan Vehicle Services LLC
|
Kinder Morgan, Inc.
|
|
Kinder Morgan Virginia Liquids Terminals LLC
|
Kinder Morgan Keystone Gas Storage LLC
|
|
Kinder Morgan Wink Pipeline LLC
|
Kinder Morgan KMAP LLC
|
|
KinderHawk Field Services LLC
|
Kinder Morgan Las Vegas LLC
|
|
KM Crane LLC
|
Kinder Morgan Linden Transload Terminal LLC
|
|
KM Decatur LLC
|
Kinder Morgan Liquids Terminals LLC
|
|
KM Eagle Gathering LLC
|
Kinder Morgan Liquids Terminals St. Gabriel LLC
|
|
KM Gathering LLC
|
Kinder Morgan Louisiana Pipeline Holding LLC
|
|
KM Kaskaskia Dock LLC
|
Kinder Morgan Louisiana Pipeline LLC
|
|
KM Liquids Terminals LLC
|
Kinder Morgan Marine Services LLC
|
|
KM North Cahokia Land LLC
|
Kinder Morgan Materials Services, LLC
|
|
KM North Cahokia Special Project LLC
|
Kinder Morgan Mid Atlantic Marine Services LLC
|
|
KM North Cahokia Terminal Project LLC
|
Kinder Morgan NatGas O&M LLC
|
|
KM Ship Channel Services LLC
|
Kinder Morgan NGPL Holdings LLC
|
|
KM Treating GP LLC
|
Kinder Morgan North Texas Pipeline LLC
|
|
KM Treating Production LLC
|
Kinder Morgan Operating L.P. “A”
|
|
KMBT Legacy Holdings LLC
|
Kinder Morgan Operating L.P. “B”
|
|
KMBT LLC
|
Kinder Morgan Operating L.P. “C”
|
|
KMGP Services Company, Inc.
|
Kinder Morgan Operating L.P. “D”
|
|
KN Telecommunications, Inc.
|
Kinder Morgan Pecos LLC
|
|
Knight Power Company LLC
|
Kinder Morgan Pecos Valley LLC
|
|
Lomita Rail Terminal LLC
|
Kinder Morgan Petcoke GP LLC
|
|
Milwaukee Bulk Terminals LLC
|
Kinder Morgan Petcoke LP LLC
|
|
MJR Operating LLC
|
Kinder Morgan Petcoke, L.P.
|
|
Mojave Pipeline Company, L.L.C.
|
Kinder Morgan Petroleum Tankers LLC
|
|
Mojave Pipeline Operating Company, L.L.C.
|
Kinder Morgan Pipeline LLC
|
|
Paddy Ryan Crane, LLC
|
Kinder Morgan Port Manatee Terminal LLC
|
|
Palmetto Products Pipe Line LLC
|
Kinder Morgan Port Sutton Terminal LLC
|
|
PI 2 Pelican State LLC
|
Kinder Morgan Port Terminals USA LLC
|
|
Pinney Dock & Transport LLC
|
Kinder Morgan Production Company LLC
|
|
Queen City Terminals LLC
|
Kinder Morgan Products Terminals LLC
|
|
Rahway River Land LLC
|
Kinder Morgan Rail Services LLC
|
|
River Terminals Properties GP LLC
|
Kinder Morgan Resources II LLC
|
|
River Terminal Properties, L.P.
|
Kinder Morgan Resources III LLC
|
|
ScissorTail Energy, LLC
|
Kinder Morgan Resources LLC
|
|
SNG Pipeline Services Company, L.L.C.
|
|
|
Schedule II
|
|
|
(Guarantors)
|
|
|
Current as of: June 30, 2018
|
|
|
|
Southern Dome, LLC
|
|
|
Southern Gulf LNG Company, L.L.C.
|
|
|
Southern Liquefaction Company LLC
|
|
|
Southern LNG Company, L.L.C.
|
|
|
Southern Oklahoma Gathering LLC
|
|
|
SouthTex Treaters LLC
|
|
|
Southwest Florida Pipeline LLC
|
|
|
SRT Vessels LLC
|
|
|
Stevedore Holdings, L.P.
|
|
|
Tejas Gas, LLC
|
|
|
Tejas Natural Gas, LLC
|
|
|
Tennessee Gas Pipeline Company, L.L.C.
|
|
|
Tennessee Gas Pipeline Issuing Corporation
|
|
|
Texan Tug LLC
|
|
|
TGP Pipeline Services Company, L.L.C.
|
|
|
TransColorado Gas Transmission Company LLC
|
|
|
Transload Services, LLC
|
|
|
Utica Marcellus Texas Pipeline LLC
|
|
|
Western Plant Services LLC
|
|
|
Wyoming Interstate Company, L.L.C.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE III
Excluded Subsidiaries |
||
ANR Real Estate Corporation
|
|
|
Coastal Eagle Point Oil Company
|
|
|
Coastal Oil New England, Inc.
|
|
|
Colton Processing Facility
|
|
|
Coscol Petroleum Corporation
|
|
|
El Paso CGP Company, L.L.C.
|
|
|
El Paso Energy Capital Trust I
|
|
|
El Paso Energy E.S.T. Company
|
|
|
El Paso Energy International Company
|
|
|
El Paso Marketing Company, L.L.C.
|
|
|
El Paso Merchant Energy North America Company, L.L.C.
|
|
|
El Paso Merchant Energy-Petroleum Company
|
|
|
El Paso Reata Energy Company, L.L.C.
|
|
|
El Paso Remediation Company
|
|
|
El Paso Services Holding Company
|
|
|
EPEC Corporation
|
|
|
EPEC Oil Company Liquidating Trust
|
|
|
EPEC Polymers, Inc.
|
|
|
EPED Holding Company
|
|
|
KN Capital Trust I
|
|
|
KN Capital Trust III
|
|
|
Mesquite Investors, L.L.C.
|
|
|
|
|
|
Note: The Excluded Subsidiaries listed on this Schedule III may also be Excluded Subsidiaries pursuant to other exceptions set forth in the definition of “Excluded Subsidiary”.
|
1.
|
Award
.
The Company hereby grants to the Employee on the Date of Grant an Award consisting of, in the aggregate, __________ Restricted Stock Units (the “Restricted Stock Units”). Each Restricted Stock Unit represents the right to receive one share of Stock, subject to the terms and conditions set forth in this Agreement and the Plan.
|
(a)
|
Account
.
The Restricted Stock Units shall be credited to a separate account maintained for the Employee on the books and records of the Company (the “Account”). All amounts credited to the Account shall continue for all purposes to be part of the general assets of the Company.
|
(b)
|
Plan Incorporated
.
The Employee acknowledges receipt of a copy of the Plan and agrees that this Award of Restricted Stock Units shall be subject to all of the terms and conditions set forth in the Plan, including future amendments thereto, if any, pursuant to the terms thereof, which Plan is incorporated herein by reference as a part of this Agreement.
|
(c)
|
Consideration
.
The grant of the Restricted Stock Units is made in consideration of the services to be rendered by the Employee to the Employer and the Employee’s compliance with the covenants set forth herein.
|
2.
|
Vesting.
|
(a)
|
Vesting Schedule
. Except as otherwise provided herein, provided that the Employee’s employment with the Employer has not terminated prior to the applicable vesting date, [and provided, further, that the Performance Goals set forth in
Exhibit I
have been achieved and certified by the Committee,] the Restricted Stock Units will vest in
|
|
Number of Restricted
|
Vesting Date
|
Stock Units Vesting
|
|
|
|
|
|
|
|
|
(b)
|
Death
. Notwithstanding the vesting schedule [and Performance Goals] provided in paragraph (a), if the Employee’s employment with the Employer terminates as a result of the Employee’s death [prior to the end of the applicable Performance Period], 100% of the unvested Restricted Stock Units shall vest as of the date of the Employee’s death.
|
(c)
|
Disability
. Notwithstanding the vesting schedule [and Performance Goals] provided in paragraph (a), upon the earlier of (i) the termination of the Employee’s employment with the Employer [prior to the end of the applicable Performance Period] by reason of disability that results in the Employer determining that the Employee cannot perform the essential functions of his or her job, with or without a reasonable accommodation, or (ii) the Employee becoming disabled for purposes of receiving benefits under the Employer’s long-term disability plan [prior to the end of the applicable Performance Period], 100% of the unvested Restricted Stock Units shall vest.
|
(d)
|
Change in Control
. Notwithstanding the vesting schedule [and Performance Goals] provided in paragraph (a), if the Employee remains continuously employed by the Employer from the Date of Grant through the date immediately preceding the occurrence[, prior to the end of the applicable Performance Period,] of a Change in Control, 100% of the unvested Restricted Stock Units shall vest as of the date of the Change in Control.
|
(e)
|
Involuntary Termination
. Notwithstanding the vesting schedule provided in paragraph (a), upon the involuntary termination of the Employee’s employment with the Employer, other than for Cause (as defined below) and due to (i) a reorganization or reduction in force for which the Employee would be eligible for pay under the Kinder Morgan, Inc. Severance Plan, or (ii) a termination where the Employer agrees to vest the unvested Restricted Stock Units as full or partial consideration for the Employee’s satisfaction of the requirements under Section 2(g), or (iii) a sale, transfer or discontinuation of any part of the operations or any business unit of the Employer, 100% of the unvested Restricted Stock Units shall vest as of the date of such termination of the Employee’s employment,
provided that
the Employee satisfies the requirements of Section 2(g). For purposes of this Agreement, “Cause” is defined as the Employee’s (i) grand jury indictment or prosecutorial information charging the Employee with illegal or fraudulent acts; (ii) conviction of a crime which, in the opinion of the Employer, would adversely affect the Employer’s reputation or business; (iii) willful refusal, without proper legal or medical cause, to perform the Employee’s duties and responsibilities; (iv) willfully engaging in conduct that the Employee has reason to know is injurious to the Employer; or (v) willful and material violation of any of the Employer’s written policies and procedures.
|
(f)
|
Retirement
. For purposes of this Agreement, “Retirement” is defined as a voluntary termination of the Employee’s employment with the Employer on or after attaining age 62, provided that the Employee has delivered to the Company written notice of the Employee’s intent to retire at least 15 days prior to the date of termination. Notwithstanding the vesting schedule provided in paragraph (a), a pro-rata portion of the unvested Restricted Stock Units based on the number of full years from the Date of Grant to the date of Retirement (the “Retirement Vesting Portion”) may vest in connection with a termination of the Employee’s employment with the Employer by reason of Retirement. On the date of such Employee’s Retirement, the Employee’s unvested Restricted Stock Units other than the Retirement Vesting Portion shall be automatically forfeited, and neither the Company nor any Affiliate shall have any further obligations to the Employee under this Agreement in respect of such forfeited Restricted Stock Units. If, for the calendar quarter immediately following the calendar quarter in which the Employee’s Retirement occurs, the Company pays a per-share cash dividend on Stock equal to 90% or more of the per-share cash dividend paid for the same calendar quarter during the immediately preceding calendar year, the Retirement Vesting Portion will vest,
provided that
the Employee satisfies the requirements of Section 2(g). If the dividend performance goal is not satisfied for the calendar quarter immediately following the calendar quarter in which the Employee’s Retirement occurs, the Employee’s Retirement Vesting Portion shall be automatically forfeited, and neither the Company nor any Affiliate shall have any further obligations to the Employee under this Agreement. As an example solely for purposes of clarity, if the terms of the grant provide that 100% of the Restricted Stock Units will vest on the third anniversary of the Date of Grant, and the Employee’s date of Retirement is more than one full year, but less than two full years, after the Date of Grant, then 33-1/3% of the Employee’s Restricted Stock Units constitute the Employee’s
|
(g)
|
Release
. Unless waived in writing by the Company, the requirements of this Section 2(g) shall be satisfied only if, prior to the sixtieth (60
th
) day following the date of termination of the Employee’s employment under Section 2(e) or 2(f), (i) the Employee executes a release (“Release”) by the Employee of all claims, known or unknown, arising on or before the date of the Release against the Company and its officers, directors and employees in the form and manner prescribed by the Company and provided to the Employee (which Release may include cooperation, nondisclosure and confidentiality covenants), and (ii) any applicable period during which the Employee can revoke his or her execution of the Release expires without the Employee revoking such execution. Notwithstanding anything herein to the contrary, the requirements of this Section 2(g) (if not waived in writing by the Company) shall be satisfied only if the Employee executes the Release within any time period required under the terms of the Release.
|
3.
|
Restrictions.
Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period and until such time as the Restricted Stock Units are settled in accordance with Section 5, the Restricted Stock Units or the rights relating thereto may not be sold, assigned, alienated, attached, exchanged, pledged, hypothecated or otherwise transferred or encumbered by the Employee, and any attempt to sell, assign, alienate, attach, exchange, pledge, hypothecate or otherwise transfer or encumber, whether made or created by voluntary act of the Employee or any agent of the Employee or by operation of law, shall be wholly ineffective and shall not be recognized by, or be binding upon, and shall not in any manner affect the rights of, the Company or any agent, and if any such attempt is made, the Restricted Stock Units will be forfeited by the Employee and all of the Employee’s rights to such units shall immediately terminate without any payment or consideration by the Company.
|
4.
|
Rights as Stockholder; Dividend Equivalents
.
|
(a)
|
The Employee shall not have any rights of a stockholder with respect to the shares of Stock underlying the Restricted Stock Units unless and until the Restricted Stock Units vest and are settled by the issuance of such shares of Stock. Upon and following the settlement of any Restricted Stock Units, such Restricted Stock Units shall expire and the Employee shall be the record owner of the shares of Stock underlying such Restricted Stock Units unless and until such shares are sold or otherwise disposed of, and as record owner shall be entitled to all rights of a stockholder of the Company (including voting rights).
|
(b)
|
If, prior to the settlement date, the Company declares a cash or stock dividend on the shares of Stock, then, as soon as administratively practicable after the payment date of the dividend (and in no case later than the end of the calendar year in which the dividend is paid to the holders of Stock or, if later, the 15th day of the third month
|
5.
|
Settlement of Restricted Stock Units
.
|
(a)
|
Once vested, each Restricted Stock Unit becomes a “Vested Unit.” Subject to Section 6 hereof, settlement of this Award or any portion thereof shall occur by the Company issuing and delivering to the Employee the number of shares of Stock equal to the number of Vested Units. Except in the event of the Employee’s Retirement, settlement shall occur promptly following the vesting date and the satisfaction of any requirement under Section 2 for a Release, and in any event no later than March 15 of the calendar year immediately following the calendar year in which such vesting occurs. In the event of the Employee’s Retirement, settlement shall occur during the second month of the second calendar quarter following the date of the Employee’s Retirement, or as soon as reasonably practicable thereafter. If the Employee is deemed a “specified employee” within the meaning of Section 409A of the Code, as determined by the Committee, at a time when the Employee becomes eligible for settlement of the Restricted Stock Units upon his “separation from service” within the meaning of Section 409A of the Code, then to the extent necessary to prevent any accelerated or additional tax under Section 409A of the Code, such settlement will be delayed until the earlier of: (a) the date that is six months following the Employee’s separation from service or (b) the Employee’s death. Notwithstanding any other provisions of this Agreement, the issuance or delivery of any Stock may be postponed for such period as may be required to comply with applicable requirements of any national securities exchange or any requirements of any law or regulation applicable to the issuance or delivery of such Stock. The Company shall not be obligated to issue or deliver any Stock if the issuance or delivery thereof shall constitute a violation of any provision of any law or of any regulation of any governmental authority or any national securities exchange.
|
(b)
|
If the employment of the Employee with the Employer terminates prior to the vesting date, and there exists a dispute between the Employee and the Employer or the Committee as to the satisfaction of the conditions to the vesting of some or all of the Restricted Stock Units or the terms and conditions of the grant, the Restricted Stock Units shall remain unvested until the resolution of such dispute, except that any Dividend Equivalents relating to dividends that may be payable to the holders of record of Stock as of a date during the period from termination of the Employee’s employment to the resolution of such dispute shall:
|
(1)
|
to the extent to which such Dividend Equivalents would have been payable to the Employee under the terms hereof, be held by the Company as part of its general funds, and shall be paid to or for the account of the Employee only upon, and in the event of, a resolution of such dispute in a manner favorable
|
(2)
|
be retained by the Company in the event of a resolution of such dispute in a manner unfavorable to the Employee only with respect to such of the Restricted Stock Units as to which such resolution shall be so unfavorable.
|
6.
|
Withholding of Tax.
To the extent that the Restricted Stock Units or vesting thereof results in income to the Employee for federal, state, provincial or local income tax purposes, the Company shall have the right to take all such action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes, including, but not limited to, withholding shares of Stock out of Stock otherwise issuable or deliverable to the Employee as a result of the vesting of the Restricted Stock Units. The Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Employee. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Employee’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting or settlement of the Restricted Stock Units or the subsequent sale of any shares; and (b) does not commit to structure the Restricted Stock Units to reduce or eliminate the Employee’s liability for Tax-Related Items.
|
7.
|
Status of Shares.
The Employee agrees that,
notwithstanding anything to the contrary herein, any shares of Stock issued to the Employee in settlement of the Restricted Stock Units may not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable federal or state securities laws.
|
8.
|
Changes in Capital Structure.
In the event that the outstanding shares of Stock shall be changed in number or class or the capital structure of the Company shall be changed by reason of stock splits, reverse stock splits, split-ups, spin-offs, combinations, mergers, consolidations or recapitalizations, or by reason of Stock dividends or other relevant changes in capitalization, the number or class of securities underlying the Restricted Stock Units, and any performance goal affected by such change, shall be adjusted to reflect such change to the extent necessary to preserve the economic intent of this Award, as determined by the Committee in accordance with the terms of the Plan.
|
9.
|
Employment Relationship.
For purposes of this Agreement, the Employee shall be considered to be in the employment of the Employer as long as the Employee remains an employee of the Employer, or any successor, whether a corporation or other Entity; provided that, for purposes of this Agreement, the Employee shall be deemed terminated on the later of the date on which the Employee delivers or receives notice of termination or the last date on which the Employee provides services to the Employer as an employee (excluding where the Employee is not providing services to the Employer because the Employee is on a leave of absence permitted by law or has been granted a leave of absence by the Employer under
|
10.
|
Non-Disclosure of Confidential Matters.
Pursuant to this Agreement and through the Employee’s continued employment with the Employer, the Employer agrees to provide the Employee with access to certain confidential information, intellectual property, and/or other trade secret information that belongs to the Employer (hereinafter “Confidential Information”). The Employee expressly acknowledges that the Employee will receive access to certain Confidential Information belonging to the Employer pursuant to this Agreement and through the Employee’s continued employment with the Employer. In consideration for the Employer’s agreement to provide the Employee with access to certain Confidential Information, the Employer’s agreements as it relates to the Restricted Stock Units as provided herein, and other good and valuable consideration, the Employee agrees not to make, at any time hereafter, including after the termination of employment for any reason, any unauthorized use, publication, or disclosure, during or subsequent to his/her employment by the Employer, of any Confidential Information generated or acquired by him/her during the course of his/her employment, except to the extent that the disclosure of Confidential Information is necessary to fulfill his/her responsibilities as an employee of the Employer. The Employee understands that Confidential Information includes information not generally known by or available to the public about or belonging to the Employer, or belonging to other companies to whom the Employer may have an obligation to maintain information in confidence, and that authorization for public disclosure may only be obtained through the Employer’s written consent. The Employee also understands and agrees that the information protected by this provision includes, but is not limited to, information of a technical and a business nature such as ideas, discoveries, designs, inventions, improvements, trade secrets, know-how, manufacturing processes, product formulae, design specifications, writings and other works of authorship, computer programs, financial figures, marketing plans, customer lists and data, business plans or methods and the like, which relate in any manner to the actual or anticipated business of the Employer, or related to its actual or anticipated areas of research and development. The Employee further agrees not to disclose to the Employer, nor induce any personnel of the Employer to use, any confidential information, trade secret, or confidential material belonging to others. Should the Employee be required to testify pursuant to subpoena under oath or as otherwise required by law and such testimony could result in disclosure of Confidential Information, the Employee agrees to promptly notify Employer that his or her
|
11.
|
Resolution of Disputes.
As a condition of the granting of the Restricted Stock Units hereby, the Employee and the Employee’s heirs, personal representatives and successors agree that any dispute or disagreement that may arise hereunder shall be determined by the Committee in its sole discretion and judgment, and that any such determination and any interpretation by the Committee of this Agreement shall be final and shall be binding and conclusive, for all purposes, upon the Company, the Employee, the Employee’s heirs, personal representatives and successors or any Person claiming through any of them.
|
12.
|
Binding Effect.
The provisions of the Plan and the terms and conditions of this Agreement shall, in accordance with their terms, be binding upon, and inure to the benefit of, all successors of the Employee, including, without limitation, the Employee’s estate and the executors, administrators, or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy, or representative of creditors of the Employee. This Agreement shall be binding upon and inure to the benefit of any successors to the Company.
|
13.
|
Agreement Subject to Plan.
This Agreement is subject to the Plan. The terms and provisions of the Plan (including any subsequent amendments thereto) are hereby incorporated herein by reference thereto. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. All definitions of words and terms contained in the Plan shall be applicable to this Agreement.
|
14.
|
Non-Solicitation.
The Employee agrees that during his/her employment with the Employer and for a period of one (1) year after the termination of the Employee’s employment relationship with the Employer, the Employee will not directly or indirectly solicit, induce, recruit, encourage, or persuade any employee of the Employer to leave the Employer.
|
15.
|
Non-Disparagement.
The Employee agrees not to engage in any act or make any comments (written, electronic, or oral), that are intended, or reasonably may be expected, to harm the business, prospects, or operations of the Employer, or to disparage the reputation of the Employer; provided, however, that the Employee shall not be held in breach of this provision should the Employee be required to testify pursuant to subpoena under oath or as otherwise required by law, provided additionally that the Employee testifies truthfully and that, prior to providing such testimony, the Employee promptly notifies Employer that his or her testimony is being sought in sufficient time so as to permit Employer to seek to prevent or limit such testimony or otherwise seek to obtain a protective order. “Disparage” for purposes of this Agreement shall mean any statements that a reasonable person would interpret as intending to be derogatory, harmful or create a negative impression about the business of the Employer.
|
16.
|
Irreparable Harm.
The Employee acknowledges that a breach of the obligations set forth in Sections 10, 14 and 15 of this Agreement shall cause irreparable harm to the Employer and that monetary damages would be an inadequate remedy for such a breach. The Employee agrees that the Employer shall be entitled to equitable relief by way of injunction or otherwise, as well as any other remedy available at law, if the Employee breaches or threatens to breach the provisions of this Agreement. Further, in the event that the Employer determines in good faith that the Employee has breached any of said provisions of this Agreement, the Employer shall, to the extent the Restricted Stock Units have not vested, be entitled, at its election, to immediately stop making any payments hereunder and/or to terminate the vesting of, or otherwise cancel, terminate or require to be relinquished to the Company the Restricted Stock Units awarded to the Employee and/or to enforce the specific performance of this Agreement by the Employee and/or to enjoin the Employee from activities in breach of said provisions of this Agreement without having to show that there are no other adequate remedies available.
|
17.
|
Notices.
Every notice hereunder shall be in writing and shall be given by registered or certified mail or by any other method accepted by the Company or the Company’s designee. All notices to the Company shall be directed to Kinder Morgan, Inc., 1001 Louisiana Street, Suite 1000, Houston, Texas 77002, Attention: Secretary, or to the Company’s designee. Any notice given by the Company to the Employee directed to the Employee at the address on file with the Company shall be effective to bind the Employee and any other Person who shall acquire rights hereunder. The Company shall be under no obligation whatsoever to advise the Employee of the existence, maturity or termination of any of the Employee’s rights hereunder, and the Employee shall be deemed to have familiarized himself or herself with all matters contained herein and in the Plan that may affect any of the Employee’s rights or privileges hereunder.
|
18.
|
Modification and Severability.
If a court of competent jurisdiction declares that any provision of this Agreement is illegal, invalid or unenforceable, then such provision shall be modified automatically to the extent necessary to make such provision fully enforceable. If such court does not modify any such provision as contemplated herein, but instead declares it to be wholly illegal, invalid or unenforceable, then such provision shall be severed from this Agreement, as applicable, and such declaration shall in no way affect the legality, validity and enforceability of the other provisions of this Agreement to which such declaration does not relate. In this event, this Agreement shall be construed as if it did not contain the particular provision held to be illegal, invalid or unenforceable, the rights and obligations of the parties hereto shall be construed and enforced accordingly, and this Agreement otherwise shall remain in full force and effect. If any provision of this Agreement is capable of two constructions, one of which would render the provision void and the other would render the provision valid, then the provision shall have the construction that renders it valid.
|
19.
|
No Derogation of Obligations.
Nothing in this Agreement is intended to limit or otherwise affect the duties and obligations of the Employee to the Company or an Employer existing at law, statutory or otherwise, or under any other written agreement between the Employee and the Company or Employer, whether during or after the termination of the Employee’s employment by the Company or Employer.
|
20.
|
Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas and applicable federal law.
|
21.
|
Section 409A
.
This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Employee on account of non-compliance with Section 409A of the Code.
|
22.
|
Entire Agreement; Amendment.
This Agreement and any other agreements and instruments contemplated by this Agreement contain the entire agreement of the parties, and, except as provided in Section 18, this Agreement may be amended only in writing signed by both parties.
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Earnings:
|
|
|
|
||||
Pre-tax income before adjustment for net income attributable to noncontrolling interests and earnings from equity investments (including amortization of excess cost of equity investments) per statements of income
|
$
|
38
|
|
|
$
|
1,010
|
|
Add:
|
|
|
|
||||
Fixed charges
|
1,062
|
|
|
982
|
|
||
Amortization of capitalized interest
|
7
|
|
|
6
|
|
||
Distributed income of equity investees
|
237
|
|
|
208
|
|
||
Less:
|
|
|
|
||||
Interest capitalized from continuing operations
|
(38
|
)
|
|
(26
|
)
|
||
Preference security dividend requirements of consolidated subsidiaries
|
(14
|
)
|
|
—
|
|
||
Noncontrolling interest in pre-tax income of subsidiaries with no fixed charges
|
(7
|
)
|
|
(9
|
)
|
||
Income as adjusted
|
$
|
1,285
|
|
|
$
|
2,171
|
|
|
|
|
|
||||
Fixed charges:
|
|
|
|
||||
Interest and debt expense, net per statements of income (includes amortization of debt discount, premium, and debt issuance costs); also includes capitalized interest
|
$
|
1,024
|
|
|
$
|
958
|
|
Add:
|
|
|
|
||||
Portion of rents representative of the interest factor
|
24
|
|
|
24
|
|
||
Preference security dividend requirements of consolidated subsidiaries
|
14
|
|
|
—
|
|
||
Fixed charges
|
$
|
1,062
|
|
|
$
|
982
|
|
|
|
|
|
||||
Ratio of earnings to fixed charges
|
1.21
|
|
|
2.21
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Kinder Morgan, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
July 20, 2018
|
/s/ Steven J. Kean
|
|
|
Steven J. Kean
|
|
|
Chief Executive Officer
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Kinder Morgan, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
July 20, 2018
|
/s/ David P. Michels
|
|
|
David P. Michels
|
|
|
Vice President and Chief Financial Officer
|
|
|
|
Date:
|
July 20, 2018
|
/s/ Steven J. Kean
|
|
|
Steven J. Kean
|
|
|
Chief Executive Officer
|
Date:
|
July 20, 2018
|
/s/ David P. Michels
|
|
|
David P. Michels
|
|
|
Vice President and Chief Financial Officer
|