Kinder Morgan Energy Partners increases quarterly distribution by 4%

Kinder Morgan Energy Partners, L.P. has increased its quarterly cash distribution per common unit to US$ 1.40 (US$ 5.60 annualised) payable on 14 November 2014, to unitholders of record as of 31 October 2014. This represents a 4% increase over Q3 2013 cash distribution per unit of US$ 1.35 (US$ 5.40 annualised) and is up from US$ 1.39 per unit (US$ 5.56 annualised) for Q2 2014.

Chairman and CEO Richard D. Kinder said: “KMP had a strong third quarter and increased the distribution for the 53^rd time since current management took over in February of 1997. Our five business segments produced US$ 1.543 billion in segment earnings before DD&A and certain items, a 10% increase over Q3 2013. Growth was led by outstanding results at Tennessee Gas Pipeline (TGP), increased oil and NGL production at SACROC, and strong results from both our Products Pipelines and Terminals businesses. Since our second quarter earnings release in July, we have increased our project backlog of expansion and joint venture investments at KMP to US$ 16.3 billion from US$ 15.4 billion, notwithstanding approximately US$ 1.1 billion in projects that were placed into service in the third quarter and thus removed from the backlog. Projects in the backlog have a high certainty of completion and will drive future growth at the company across all of our business segments. Additionally, since 1 December 2013, Kinder Morgan’s natural gas pipelines companywide have entered into new and pending firm transport capacity commitments totalling 6.4 billion ft³/d (6 billion ft³/d at KMP). This represents about 9% of the current daily natural gas demand in the United States and compares to 5.3 billion ft³/d (4.8 billion ft³/d at KMP) when second quarter earnings were announced. Our pipelines currently move about one-third of the natural gas consumed in America.”

KMP reported third quarter distributable cash flow before certain items of US$ 607 million, up 10% from US$ 554 million for the comparable period in 2013. Distributable cash flow per unit before certain items was US$ 1.31 compared to US$ 1.27 for the third quarter last year. Third quarter net income before certain items was US$ 746 million compared to US$ 664 million for the same period in 2013. Net income was US$ 976 million compared to US$ 697 million for the third quarter last year. Certain items for the third quarter totalled a net gain of US$ 230 million, primarily reflecting a gain from a certain item from the early termination of a long-term natural gas transportation contract, versus a net gain of US$ 33 million for the same period last year.

For the first nine months of the year, KMP reported distributable cash flow before certain items of US$ 1.861 billion, up from US$ 1.609 billion for the comparable period in 2013. Distributable cash flow per unit before certain items was US$ 4.08 compared to US$ 3.94 for the same period last year. Net income before certain items was US$ 2.232 billion compared to US$ 1.946 billion for the first three quarters of 2013. Net income was US$ 2.399 billion compared to US$ 2.499 billion for the same period last year. Certain items for the first nine months of the year totalled a net gain of $167 million versus a net gain of US$ 553 million for the same period last year, again, reflecting a large gain from certain items in the year-to-date period last year primarily related to re-measurement of KMP’s original 50% interest in the Eagle Ford Gathering joint venture to fair market value as a result of the Copano acquisition.

Adapted from press release by Rosalie Starling

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