General | 12 Months Ended |
Dec. 31, 2013 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
General | ' |
General |
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Kinder Morgan Management, LLC, is a publicly traded Delaware LLC, formed on February 14, 2001. KMGP, of which KMI indirectly owns all of the outstanding common equity, is the general partner of KMP and owns all of our voting shares. KMGP, pursuant to a delegation of control agreement among us, KMGP and KMP, has delegated to us, to the fullest extent permitted under Delaware law and KMP’s limited partnership agreement, all of its rights and powers to manage and control the business and affairs of KMP, subject to the general partner’s right to approve specified actions. We are a limited partner in KMP through our ownership of its i-units, and manage and control its business and affairs pursuant to the delegation of control agreement. Our success is dependent upon our operation and management of KMP and its resulting performance, see Note 5 for summarized income statement and balance sheet information for KMP. |
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KMP’s acquisition of Copano Energy, L.L.C. |
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On May 1, 2013, KMP completed the acquisition of Copano, for a total purchase price of approximately $5.2 billion, |
including the assumption of debt and all other liabilities. It was a 100% unit for unit transaction with an exchange ratio of |
0.4563 KMP common units for each Copano common unit. Copano, a midstream natural gas company with operations primarily in Texas, Oklahoma and Wyoming, provides comprehensive services to natural gas producers, including natural gas gathering, processing, treating and NGL fractionation. |
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KMI’s Acquisition of El Paso Corporation and related transactions |
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Effective on May 25, 2012, KMI completed the acquisition of all of the outstanding shares of EP. As a result, KMI owns a 41% limited partner interest and the 2% general partner interest in EPB as well as certain natural gas pipeline assets. The combined enterprise, including the associated master limited partnerships, KMP and EPB, owns an interest in or operates more than 80,000 miles of pipeline and 180 terminals and represents the third largest energy company in North America with a combined enterprise value of approximately $110 billion. |
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Effective November 1, 2012, KMI sold KMP’s FTC Natural Gas Pipelines disposal group to Tallgrass Energy Partners, L.P. for approximately $1.8 billion (before selling costs) to satisfy terms of a March 15, 2012 agreement with the U.S. FTC to divest certain of its assets in order to receive regulatory approval for its EP acquisition. KMP’s FTC Natural Gas Pipelines disposal group’s assets included (i) Kinder Morgan Interstate Gas Transmission natural gas pipeline system; (ii) Trailblazer natural gas pipeline system; (iii) Casper and Douglas natural gas processing operations; and (iv) 50% equity investment in the Rockies Express natural gas pipeline system. |
Effective August 1, 2012, KMP acquired from KMI a 100% ownership interest in TGP and a 50% ownership interest in EPNG for an aggregate consideration of approximately $6.2 billion (including KMP's proportional share of assumed debt borrowings as of August 1, 2012). In this report, we refer to this acquisition of assets by KMP from KMI as the August 2012 drop-down transaction and the combined group of assets acquired by KMP from KMI effective August 1, 2012 as the August 2012 drop-down asset group. KMI sold the drop-down asset group to KMP in order to replace KMP’s FTC Natural Gas Pipelines disposal group that it divested on November 1, 2012. See Note 5. |
Effective March 1, 2013, KMP acquired from KMI the remaining 50% ownership interest it did not already own in both |
EPNG and the El Paso midstream assets or Kinder Morgan Altamont LLC (formerly, El Paso Midstream Investment Company, |
L.L.C.), which we refer to in this report as the midstream assets, for an aggregate consideration of approximately $1.7 billion |
(including KMP’s proportional share of assumed debt borrowings as of March 1, 2013). In this report, we refer to this |
acquisition of assets by KMP from KMI as the March 2013 drop-down transaction; the combined group of assets acquired by |
KMP from KMI as the March 2013 drop-down asset group; and the combined August 2012 drop-down asset group (described |
above) and the March 2013 drop-down asset group as the drop-down asset groups. KMP acquired its initial 50% ownership |
interest in the midstream assets from an investment vehicle affiliated with Kohlberg, Kravis Roberts and Co. L.P. |
effective June 1, 2012. |
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KMI acquired all of the assets included in the drop-down asset groups as part of its May 25, 2012 acquisition of EP. KMI accounted for its acquisition of the drop-down asset groups under the acquisition method of accounting, and KMP accounted for the drop-down transactions as combinations of entities under common control. Accordingly, the KMP information in Note 5 has been prepared to reflect the transfer of TGP, EPNG and the remaining 50% of ownership interests in the midstream assets from KMI to KMP as if such transfers had taken place on the date when TGP, EPNG and the midstream assets met the accounting requirements for entities under common control-May 25, 2012 for both TGP and EPNG, and June 1, 2012 for the midstream assets. Specifically, KMP (i) consolidates its now 100% investments in the drop-down asset groups as of the effective dates of common control, recognizing the acquired assets and assumed liabilities at KMI’s carrying value (including all of KMI’s purchase accounting adjustments); (ii) recognized any difference between its purchase price and the carrying value of the net assets it acquired as an adjustment to its Partners’ Capital (specifically, as an adjustment to its general partner’s and its noncontrolling interests’ capital interests); and (iii) retrospectively adjusted its consolidated financial statements, for any date after the effective dates of common control. |
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Additionally, because KMI both controls KMP and consolidates KMP’s financial statements into its consolidated financial |
statements as a result of its ownership of KMP’s general partner, KMP fully allocated to its general partner (i) the earnings of |
the drop-down asset groups for the periods beginning on the effective dates of common control (described above) and ending |
August 1, 2012 for the August 2012 drop-down asset group and March 1, 2013 for the March 2013 drop-down asset group, |
respectively, and (ii) incremental severance expense related to KMI’s acquisition of EP and allocated to KMP from KMI. These amounts are reported in “General Partner’s interest in pre-acquisition income from operations and severance expense of drop-down asset groups” in Note 5. The severance expense allocated to KMP was associated with the drop-down asset groups; however, KMP does not have any obligation to, nor did KMP, pay any amounts related to this expense. |
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For all periods beginning after KMP’s acquisition dates of August 1, 2012 and March 1, 2013, respectively, KMP allocated |
its earnings (including the earnings from the drop-down asset groups) to all of its partners according to its partnership |
agreement. |