Exhibit 12.1
KINDER MORGAN, INC. AND SUBSIDIARIES
EXHIBIT 12 – STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions except ratio amounts)
The Ratio of earnings to fixed charges for the period ended May 31, 2007 reflects the operations of the Company prior to the Going Private transaction, which was accounted for as a business combination, requiring that we record the assets acquired and liabilities assumed at their values as of the date of the Going Private transaction, resulting in a new basis of accounting. Hence, there is a blackline division on the Ratio of earnings to fixed charges shown below, which is intended to signify that the amounts shown for periods prior to (Predecessor Company) and subsequent to (Successor Company) the Going Private transaction are not comparable. See Note 2 to our consolidated financial statements included in Exhibit 99.1 of our Form 8-K dated May 04, 2012 for additional information on the Going Private transaction.
| Successor Company | Predecessor Company | |||||||||||||||||||||||
| (In millions, except ratios) | (In millions, except ratios) | |||||||||||||||||||||||
Year Ended December 31, | Seven Months Ended December 31, | Five Months Ended May 31, | ||||||||||||||||||||||
| 2011 | 2010 | 2009 | 2008 | 2007 | 2007 | |||||||||||||||||||
| Earnings: | ||||||||||||||||||||||||
| Pre-tax income from continuing operations before cumulative effect of a change in accounting principle and before adjustment for noncontrolling interests and equity earnings (including amortization of excess cost of equity investments) per statements of income | $ | 590.7 | $ | 509.5 | $ | 729.5 | $ | (3,249.4 | ) | $ | 356.5 | $ | (104.0 | ) | ||||||||||
| Add: | ||||||||||||||||||||||||
| Fixed charges | 766.2 | 703.7 | 656.4 | 751.2 | 642.5 | 285.3 | ||||||||||||||||||
| Amortization of capitalized interest | 4.4 | 4.0 | 3.8 | 3.0 | 1.0 | 1.0 | ||||||||||||||||||
| Distributed income of equity investees | 199.9 | 132.2 | 128.2 | 158.3 | 84.6 | 47.6 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||
| Interest capitalized from continuing operations | (14.5 | ) | (12.5 | ) | (32.9 | ) | (49.5 | ) | (25.4 | ) | (12.4 | ) | ||||||||||||
| Noncontrolling interests in pre-tax income of subsidiaries with no fixed charges | (21.5 | ) | (107.4 | ) | (82.7 | ) | (126.2 | ) | (55.2 | ) | (27.0 | ) | ||||||||||||
| Income as adjusted | $ | 1,525.2 | $ | 1,229.5 | $ | 1,402.3 | $ | (2,512.6 | ) | $ | 1,004.0 | $ | 190.5 | |||||||||||
| Fixed charges: | ||||||||||||||||||||||||
| Interest and debt expense, net per statements of income (includes amortization of debt discount, premium, and debt issuance costs; excludes capitalized interest) | $ | 717.8 | $ | 680.8 | $ | 632.0 | $ | 725.3 | $ | 628.9 | $ | 275.7 | ||||||||||||
| Add: | ||||||||||||||||||||||||
| Portion of rents representative of the interest factor | 48.4 | 22.9 | 24.4 | 25.9 | 13.6 | 9.6 | ||||||||||||||||||
| Fixed charges | $ | 766.2 | $ | 703.7 | $ | 656.4 | $ | 751.2 | $ | 642.5 | $ | 285.3 | ||||||||||||
| Ratio of earnings to fixed charges | 1.99 | 1.75 | 2.14 | (a) | 1.56 | (a) | ||||||||||||||||||
____________
| (a) | For the year ended December 31, 2008 and the five months ended May 31, 2007, fixed charges exceeded earnings by $3,263.8 million and $94.8 million, respectively. In 2008, Kinder Morgan, Inc. recognized a $4,033.3 million non-cash goodwill impairment charge associated with its investment in Kinder Morgan Energy Partners, L.P. During the five months ended May 31, 2007, Kinder Morgan, Inc. recognized a $377.1 million non-cash goodwill impairment charge associated with its investment in Trans Mountain. |