HOUSTON--(BUSINESS WIRE)--Dec. 4, 2012--
Kinder Morgan today announced its preliminary 2013 projections for
Kinder Morgan, Inc. (NYSE: KMI), Kinder Morgan Energy Partners, L.P.
(NYSE: KMP), Kinder Morgan Management, LLC (NYSE: KMR) and El Paso
Pipeline Partners, L.P. (NYSE: EPB). Chairman and CEO Richard D. Kinder
stated, “We anticipate strong growth in 2013 across the Kinder Morgan
family of companies. KMI’s growth is driven primarily by its ownership
of the general partners of KMP and EPB. The majority of our assets
resides at KMP and EPB. KMR is financially equivalent to KMP, but does
not own any assets. Kinder Morgan primarily owns or operates a
diversified portfolio of fee-based energy assets that generate
substantial cash flow in virtually all types of market conditions. With
our large footprint of midstream assets in North America, we are
confident that Kinder Morgan is well positioned for future growth.”
KMI expects to declare dividends of $1.57 per share for 2013. This
represents a 16 percent increase over KMI’s 2012 budget target of $1.35
per share and a 12 percent increase over the $1.40 per share of
dividends it expects to declare for 2012. Growth at KMI in 2013 is
expected to be driven by continued strong performance at KMP, along with
contributions from EPB and the natural gas assets that KMI acquired in
the El Paso Corporation transaction.
KMP expects to declare cash distributions of $5.28 per unit for 2013, a
6 percent increase over its 2012 budget target of $4.98 per unit, which
it expects to meet. KMP’s 2013 budget projection includes the expected
purchase (dropdowns) of 50 percent of El Paso Natural Gas Pipeline and a
50 percent stake in midstream assets from KMI, which would give KMP
100 percent ownership of these assets. (KMR also expects to declare
distributions of $5.28 per share for 2013 and the distribution to KMR
shareholders will be paid in the form of additional KMR shares.)
“We see exceptional growth opportunities across all of KMP’s business
segments, including the need to build more midstream infrastructure to
move or store oil, gas and liquids from the prolific shale plays in the
U.S. and the oilsands in Alberta, along with increasing demand for
export coal and CO2,” Kinder said.
In 2013, KMP expects to:
Generate over $5.4 billion in business segment earnings before DD&A
(adding back KMP’s share of joint venture DD&A), an increase of almost
$900 million over the 2012 forecast.
Distribute over $2 billion to its limited partners.
Produce excess cash flow of more than $30 million above the
distribution target of $5.28 per unit.
Invest approximately $2.8 billion in expansions (including
contributions to joint ventures) and small acquisitions (excluding the
dropdowns from KMI). Over $625 million of the equity required for this
investment program is expected to be funded by KMR dividends.
KMP’s expectations assume an average West Texas Intermediate (WTI) crude
oil price of approximately $91.68 per barrel in 2013, which approximated
the forward curve at the time this budget was prepared. The overwhelming
majority of cash generated by KMP’s assets is fee based and is not
sensitive to commodity prices. In its CO2 segment, the
company hedges the majority of its oil production, but does have
exposure to unhedged volumes, a significant portion of which are natural
gas liquids. For 2013, the company expects that every $1 change in the
average WTI crude oil price per barrel will impact the CO2 segment
by approximately $8 million, or approximately 0.15 percent of KMP’s
combined business segments’ anticipated segment earnings before DD&A.
EPB expects to declare cash distributions of $2.55 per unit for 2013, a
13 percent increase over its 2012 expected distribution of $2.25 per
unit. EPB’s 2013 budget includes the expected purchase (dropdown) of 50
percent of Gulf LNG from KMI. EPB’s growth is expected to be driven by
its stable, regulated natural gas pipeline and storage assets, its LNG
businesses and incremental cost and growth synergies related to KMI’s
purchase of El Paso. In 2013, EPB expects to generate earnings before
DD&A of $1.22 billion (adding back EPB’s share of joint venture DD&A),
an increase of over $50 million compared to 2012. EPB expects to produce
excess cash flow of more than $25 million above the 2013 distribution
target of $2.55.
The boards of directors will review and approve the 2013 Kinder Morgan
budgets at the January board meeting and the budgets will be discussed
in detail during the company’s annual analyst meeting on Jan. 30, 2013,
in Houston. Kinder Morgan remains committed to transparency and will
continue to publish its budgets on the company’s web site, www.kindermorgan.com.
The 2013 budget will be the standard by which KMI, KMP, KMR and EPB
measure their performance next year and will be a target for determining
Kinder Morgan is the largest midstream and the third largest energy
company in North America with a combined enterprise value of
approximately $100 billion. It owns an interest in or operates
approximately 75,000 miles of pipelines and 180 terminals. Its pipelines
transport natural gas, gasoline, crude oil, CO2 and other
products, and its terminals store petroleum products and chemicals and
handle such products as ethanol, coal, petroleum coke and steel. Kinder
Morgan, Inc. (NYSE: KMI) owns the general partner interest of Kinder
Morgan Energy Partners, L.P. (NYSE: KMP) and El Paso Pipeline Partners,
L.P. (NYSE: EPB), along with limited partner interests in KMP and EPB
and shares in Kinder Morgan Management, LLC (NYSE: KMR). For more
information please visit www.kindermorgan.com.
This news release includes forward-looking statements. These
forward-looking statements are subject to risks and uncertainties and
are based on the beliefs and assumptions of management, based on
information currently available to them. Although Kinder Morgan believes
that these forward-looking statements are based on reasonable
assumptions, it can give no assurance that such assumptions will
materialize. Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include
those enumerated in Kinder Morgan’s reports filed with the Securities
and Exchange Commission. Forward-looking statements speak only as of the
date they were made, and except to the extent required by law, Kinder
Morgan undertakes no obligation to update or review any forward-looking
statement because of new information, future events or other factors.
Because of these uncertainties, readers should not place undue
reliance on these forward-looking statements.
Source: Kinder Morgan
Larry Pierce, 713-369-9407
Mills Thornock, 713-369-9490