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Kinder Morgan Energy Partners Increases Quarterly Distribution To $1.26 Per Unit

Stocks in this article: EPB KMI KMP KMR

For the first nine months of the year, distributable cash flow before certain items was $1.29 billion, up 17 percent from $1.10 billion for the comparable period in 2011. Distributable cash flow per unit before certain items was $3.72 compared to $3.40 for the same period last year. Net income before certain items was $1.58 billion compared to $1.27 billion for the first three quarters of 2011. Including certain items, net income was $737 million versus $789 million for the same period last year. Certain items for the first nine months of the year totaled a net loss of $838 million versus a net loss of $479 million for the comparable period in 2011. The loss, due to certain items for the first three quarters, was primarily attributable to the re-measurement of discontinued operations to fair value related to the KMP assets to be divested in order to obtain Federal Trade Commission approval for Kinder Morgan, Inc.’s acquisition of El Paso.

Overview of Business Segments

The Products Pipelines business produced third quarter segment earnings before DD&A and certain items of $185 million, up 4 percent from $178 million for the comparable period in 2011. This segment currently is expected to end the year slightly below its published annual budget of 6 percent growth.

“The increase in earnings compared to the third quarter of 2011 was driven by higher earnings at our West Coast and Southeast Terminals,” Kinder said. “Growth at our West Coast Terminals was attributable to the Carson, Calif., tank expansion project which is being completed ahead of schedule, while growth at our Southeast Terminals was a result of two acquisitions and increased throughput volumes of refined products and biofuels. Earnings were also favorably impacted by higher volumes on the Cochin Pipeline reflecting a completed expansion project and a favorable tax adjustment, as well as better results from our transmix business due to favorable gasoline and diesel pricing.” Natural gas liquids (NGL) volumes on Cochin increased by 40 percent compared to the third quarter last year.

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