Kinder Morgan Energy Partners L.P. 's ( KMP ) first quarter
2013 earnings from continuing operations of 66 cents per limited
partner unit (excluding certain items) were at par with the Zacks
Consensus Estimate. The quarterly results were 8.2% higher than the
year-ago quarter's earnings of 61 cents per share.BP PLC (BP): Free Stock Analysis ReportKINDER MORGAN (KMI): Free Stock Analysis ReportKINDER MORG ENG (KMP): Free Stock Analysis
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Revenues increased 44% to $2,661.0 million in the quarter from
$1,848.0 million in the year-ago quarter and beat the Zacks
Consensus Estimate of $2,490.0 million. The outperformance was
mainly attributable to higher volumes in its interstate pipeline
The partnership's cash distribution per common unit was raised to
$1.30 ($5.20 annualized), representing an 8% year-over-year growth.
The distribution is payable on May 15, 2013. The partnership has
increased the quarterly distribution 47 times since the current
management team took over in Feb1997.
Kinder Morgan's payout hike was fueled by incremental contribution
from the dropdown of 100% of Tennessee Gas Pipeline (TGP) and 50%
of El Paso Natural Gas (EPNG), from its parent company
Kinder Morgan Inc. ( KMI ), growth
opportunities in the coal export business as well as robust oil
The partnership's distributable cash flow - a measure of its
ability to make unitholders' payments - before considering certain
items was $550 million versus $462 million in the year-ago quarter.
Additionally, distributable cash flow per unit, excluding certain
items, was $1.46, up 6.6% year over year.
First Quarter Segmental Highlights
Products Pipelines: The business segment's
earnings before DD&A and certain items climbed 13.6% year over
year to $200 million. The higher revenues from the Cochin Pipeline
also aided the growth. This was accompanied by higher transmix
volumes with improved contributions from the Kinder Morgan Crude
and Condensate Pipeline. Further, a new long-term contract with
BP plc ( BP ) is expected to
boost earnings going forward. Total refined products volume was up
1.4% from the prior-year quarter.
Natural Gas Pipelines: Earnings before DD&A
and certain items from the segment shot up 78.1% year over year to
$497 million. The performance was aided by the dropdown of TGP and
EPNG as well as higher contributions from the Jun 2012 acquisition
of 50% of some midstream properties. Further, solid performances by
the Eagle Ford assets also contributed to the results, which were
partly offset by the divestiture of Rockies assets.
Overall, transport volumes moved up 7% from the year-ago quarter,
mainly attributable to robust volumes in the Eagle Ford and strong
transport volumes on the Texas intrastate pipeline system due to
increased deliveries to Mexico. Again, a new supply project at TGP
and colder weather in the Northeast also added to this.
CO2: The segment's earnings before DD&A and
certain items were $340 million, up 0.9% year over year on the back
of increased yield at the SACROC as well as record natural gas
liquids (NGL) output. Increased output at the Katz field also aided
Terminals: The business segment earned $187
million before DD&A and certain items in the first quarter,
unchanged year over year. The segment benefited from its liquids
terminals in the Northeast as well as in the Gulf, which saw new
and restructured contracts with higher rates and increased demand
for export coal.
Kinder Morgan Canada: The segment reported
earnings of $52 million before DD&A and certain items, up 4%
year over year, reflecting superior performance by the
Express-Platte Pipeline and increased shipments into Washington
through the Puget Sound pipeline system. The recent approval by the
National Energy Board for a new three-year toll agreement on Trans
Mountain also augmented the segment's earnings.
As of Mar 31, 2013, Kinder Morgan had cash and cash equivalents of
$736 million and long-term debt of $16,829 million.
Debt-to-capitalization ratio was 57.9% (versus 56.0% in the last
Kinder Morgan currently expects to invest approximately $11
billion in expansion and joint venture related operations. For
2013, the partnership intends to spend nearly $3 billion in
expansion and acquisitions and is reaping benefits from the recent
boom in oil and gas exploration in the North American shale
formations as most of these basins have very few or no
Kinder Morgan currently has a Zacks Rank #3 (short-term Hold
rating). However, the Zacks Ranked #1 Range Resources
Corporation ( RRC ) is expected to
outperform the market over the next few months.