Summary
Kinder Morgan, Inc. (KMI) reported its 2012 full-year results, marked by the significant acquisition of El Paso Corporation (EP) in May 2012. This transformative event reshaped the company, making it a leading energy infrastructure company in North America. The integration of EP's extensive natural gas pipeline assets significantly expanded KMI's footprint and operational capabilities. The company's strategy remains focused on stable, fee-based energy transportation and storage assets, aiming to increase asset utilization and manage costs effectively. KMI's financial performance in 2012 reflects the impact of the EP acquisition, including substantial expenses related to the transaction. Despite these one-time costs, the company's core operations, particularly within its master limited partnerships (KMP and EPB), demonstrated resilience. Looking ahead to 2013, KMI anticipates continued growth, driven by KMP's expected distribution per unit increase and contributions from the newly acquired EP assets, projecting a dividend increase for KMI shareholders.
Key Highlights
- 1Completed the transformative acquisition of El Paso Corporation (EP) in May 2012, significantly expanding its North American midstream and energy infrastructure operations.
- 2Divested KMP's FTC Natural Gas Pipelines disposal group for approximately $1.8 billion as part of regulatory approvals for the EP acquisition.
- 3KMP engaged in significant drop-down transactions, acquiring the Tennessee Gas natural gas pipeline system and a 50% interest in the El Paso Natural Gas pipeline system from KMI for $6.2 billion.
- 4Announced a definitive agreement in January 2013 to acquire Copano Energy, L.P. for approximately $5 billion, further bolstering its natural gas midstream assets.
- 5KMI expects to declare dividends of $1.57 per share for 2013, representing a 16% increase over its budgeted 2012 dividend.
- 6The company maintained a strong focus on fee-based services and asset optimization, underpinning its business strategy.
- 7As of December 31, 2012, Kinder Morgan had approximately $32 billion in consolidated debt.