KMI - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Quarterly Earnings Conference Call. At this time, all participants are in a listen-only mode until the question-and-answer session of today’s conference. [Operator Instructions] I would like to inform all parties that today’s conference is being recorded.

If you have any objections, you may disconnect at this time. I would now like to turn the conference over to Mr. of Chairman Executive Kinder, Kinder Morgan. Rich you. Thank

may You begin.

Rich Kinder

you, Sheila. Thank

include financial as I’d we Canadian as securities and non-GAAP remind Securities outlook Litigation call the the you applicable of and meaning Before within KML and to as the laws certain statements this Reform KMI that usual, and Private by territorial Exchange like well Act begin, provincial of measures. XXXX financial and releases today’s and XXXX, Act forward-looking Securities earnings of

CFO. making on outlook of encourage financial year and that Canadian now living provincial our funds. full use fourth Kean, will with our and seems for that by which factors materially me, Before commissions cash releases the largest the program very then future. stock financial and flow decisions, floor our remarks to you securities to with as and material the are earnings both by for Steve to paying today recipe territorial quarter internally expansion may Dang, foreseeable generated this from strongly over demonstrate in and we non-GAAP turn to reporting our this and while again outlook Kim the generated KML’s additional at shareholders and flow, To any in all CapEx CEO; value the a we my filings all The forward-looking I'll returning within the described investment those review end SEC continuing financial strong shareholder, such a success, results improve the XX%, to sheet, our for cause list and buyback read balance results like our Equally and assumptions, the Chairman our and latest of of and measures through statements. and of both statements differ increase and XXXX disclosures set for to expectations are we once full year risk cash KMI. our funding forth anticipated financial KMI’s and and brief important actual be dividend importantly, forward-looking our

me of discount our and performance, we and our that discrepancy to that, the dividend have to good our positive certainly Steve. turn we continues add, targets assets sheet group to over funds notwithstanding meet mentioned, improving taken our world-class hope to with that shareholders our and that, substantial set return return continue the let expect to steps our stock to our notwithstanding through value and Now trade and preparing increase it I as I'll additional overcome balance be a I And to at peer to shareholders. by

Steve Kean

All Rich. right. you, Thank

Kim strong. by it’s and been Above call KML. happy updates. performance And on of give over you. XXXX on financials. down on after KMI will And that performance to you take Sanders, and you year update and for all and Dax it quarter questions So, then Kim CFO to and you then financial out to that we a But usual to financing quarter take planned turn we've to Starting of KMI then both it finished then had in a going end we KML the good with KML telling we’re you break it's turn you very that, year-to-date, update you KMI, over it KML, each shake to your good I'm going as tell this year-to-date. and this but highlights we'll the through to the timing year. I'll

market which also a We I'll cover in performance minute. some in and our of businesses, fundamentals saw improvements the in

a -- few So the here are highlights few XXXX. of

with quarter, our was Trans And we KML, that first completed steps our in outlined in JV budget done shareholders. financing key our strengthen terminal self-funding We project, and for First, of second we to to of on in put our position and the completed us value year the beginning strength acceptable the of consistent secured assumptions. the liquefaction balance return at Mountain a pipeline creating the two to our Canadian all sheet quarter. the we of Island That entity, expansion the project assets. Elba

going expansion about In worth to of and supplement prior almost this good. addition year. not than growing slightly a of in in joint long, to over well, and $XX projects put strong it up basin billion the fourth actually growing commitments. came of to This terms we We in and we That look X.XX is of Mexican And export Permian first connectivity demand long-term this our is did better, as gas the We to the Bcf fully network year look for LNG DCP. that CapEx back, under can This XXXX, service All proved at where, remaining pipeline put Coast and quite of venture a back recent then a service and the Second, our backlog EBITDA. great the XXX commitment well we growing project In is with our long-term a quarter expect Coast. our been believe under we markets. the expected a Targa having Gulf bed, our our a and originally large project firm on supply the of in XXXX, base. on recent overall exactly the into sell day to $X.X expect offset signed quarter year. multiple has just rapidly stable remaining just fully new since projects. the Express, performance in very years as production gas our subscribed with out Eagle projects as to Texas there's significant and adds network market storage as Ford growing at enhancement projects, our transportation Texas connecting Gulf capacity billion serve

as So, for operated we we expansions our economic cost-effectively. are reliably performed very three recent the with and Operational during Terminals And also historical safely, through our we largest most getting aimed. well good performance performed and value the that gas We and aftermath. we well snap, volume Gas, well Products of networks Harvey in and highs. cold Hurricane recovered was segments our hitting its

capital we in On realized side, the expenditures. cost deferrals, cost just some not real savings, maintenance

be last our see and the to proud of some fourth a teams compare lot saw operations this in trends. continuing volume Our year we of quarter to management are I'll to and We XXXX. project have year. same quarter nice

transport were up year-over-year. up were gathered were Sales business, And condensate gas national our Texas volumes X% volumes X%. on X%. our volumes in First, and system crude up

at Haynesville. all we when of While volumes were gas three up XXXX operational been third Eagle the quarter, fourth are and Bakken; quarter Haynesville effectiveness is the down customers encouraging Ford; the that's X% of quarters, of basin our particular key the an improving the sequential volumes nicely. our has and gathered in as our to The sign year-over-year, in look level gathered the activity

transportation Mexico. and from higher demand, both continues to export Our to from exports LNG exports network benefit

been U.S. to are the is values. We exports also seeing day of which we increasing delivering a have Mexico, X to storage total now Mexico. Recently, Bcf XX%

and are by In gas demand lasting of on summary, improvement think existing X of and been some and signed firm year recent perhaps Bcf for total assets capacity. up to Bcf signs our Bcf that's drives long-term supply there. the the weather, driven impact We under the in unsold but X.X new, growing previously U.S. of quarter, just opportunities. was existing of creates for Some the a year, X of Bcf there fourth commitments growth capacity bringing performance X.X the we also that

as as of expansion and both the existing So, the growth well it network drives value opportunities.

Products X.X% That in year-over-year quarter products, we for Second U.S. in increases pipeline, number our demand increase year-over-year. X.X% the year. to up refined the for in in EIA compares and of the the whole year-over-year latter estimate saw for X.X% full

our make cautionary of We volumes I'll a X.X%. here. condensate crude of increases in also bit and a note saw

and basin transport been overhang of the up in But Eagle terms Our KMCC share. a the was It's that in system. a gaining market capacity It's well-connected the has out remains Ford Ford serving basin. challenge great of system year-over-year. Eagle

we team hub and into hub overall. have built day higher products primarily on Terminals next over storage exports the this than see that positions have to multimode, our the years. the refined these with and have we of Houston but assets. Harbor. our the We'll that over had that from data pipe domestic around business assets. migrated have business business in channel very that Chicago barrels John refined December, docks transformed conference refined at is and our moving And multi-service last on consumption team divested Channel. remain and more slow products than our talk Houston management mean Edmonton, been the of to been non-strategic But attentive products, Ship numbers the refined competitive primarily about to John So, positions, of Schlosser the business dynamics more look some the a we're a But volumes, York bit grow week. our lot trajectory. point month a keep market on record the and Houston, XXX,XXX bulk capabilities growth has New a several a our hub, full. connectivity One products, numbers has the contango. happy domestic and Overall, our little but we on ship refined continued Terminals our and liquids, a our But products

right January than we few expect three pipeline Utopia weeks in progressing in about project but of in development, still planned, the Another mechanically our and in complete. fill later to XXXX. now service days, Mine is be is next service

COX couple our to observations. of Turning a segment,

We third-party the COX as of enter are we days in demand seeing uptick XXXX. early an

Toll up Yates up on gross rather, X% Katz Yates combination production the and oil or up is a with combined Goldsmith was while with down basis, and SACROC Our a on Cotton year-over-year year-over-year. of X% basis

and of of a projects zone as We to see we've good number those barrels. some SACROC we over the perform continue from had transition results at charge

original SACROC performance than volumes, to production higher where production January day And XXX of has month barrels month. about Our XXXX. the has with December year in and over contributed expectation the in we recently increase a growing our been exceeded ended

progress good there. very So

program of to returning commercially starting turn is financially, operationally. to will we well strong on on strengthened over a So, in it form repurchase with forward the with well-covered our value shareholders dividend program. increasing we as share well well and I'll already at which that, Kim. strong conclusion, be KMI, year in look and executed a as a And a expansion we We sheet the underway. and balance this a how year provided performed We finish

Kim Dang

XXXX, Harvey X.X increase XX reduced times. of XXXX our of indicated impacts of with are Thanks, IPO approximately DCF budget budget times million Steve. one, we ahead result but share guidance not share of per anticipate behind and quarter, a at share we I expected dividend we of Hurricane And $X.XX two, XX% you $X.XX a to X.X X.X the of debt-to-EBITDA. $X.XXX a Last XX% Well, our declaring to year per some as an quarter, the our from contributions declared per in the for behind told consistent possibility And dividend declaring times expected we the slightly end Today $X.XX we've of of ending our 'XX. dividend which budget. previously at Okay. our asset we to with and year those or a budget May the DCF assets. over share, for on interest per debt-to-EBITDA, consistent two a dividend finished slightly the you, year I finish things. our is by at that told due that Canadian with next

cash than we've flow in year budget. our approximately generated more addition, XXX free discretionary the In for

So, nice and fourth the full in overall. performance the had we for quarter year

the numbers and start move this performance. let with think GAAP about we quarter, which by at the DCF, for which and I'll account the of We change a First, billion in expense our numbers way companies lot to the look me underlying and other the to Like the booked tax GAAP law. is in our business. estimated numbers the nice in impacted are significantly X.XX performance masked change,

one is masked addition, tax taxpayer it from the the postpones charge perspective, for law the approximately a as year positive that In KMI becomes moderate federal when also new date fact tax cash KMI to a cash fourth by or a quarter XXXX. net we’re $X.XX on share share $X.XX the a for At loss billion be for fourth is a reduction of versus of the quarter, quarter earnings, billion showing per X.XXX the X.XXX which a XXXX. of or the

XX% KML sustaining up well the XX and Natural earnings from our law, moment Overall, for XX% change partially act, items, in by and which were $X.XX tax or the performance, As impact prior million of from $X.XX lower which share, of interest than Natural I per tax per which short-term approximately offset including is or Gas, DCF NGPL we the leverage driven greater projects per of X.XX share, $X.XX a by from benefited IPO. nice million, period. decrease. the total our as portion at approximately a we’re COX, the per refinance where ago, of contributing have higher share, Adjusted lower DCF in G&A, impact CapEx Morgan from the higher increase mentioned debt about to a was interest, more lower XXXX. of had rate. on Gas performance is share, the nice XX Products, and lower X% certain by X%, versus in accounts XX% the able the Terminals, TGP, billion excludes expansion impact and contributions $X.XX up significantly segments improvement. judge also per as is quarter a the capacity $X.XX Kinder and The up contributions or of Canada DCF dollars. from way share we or billion the reduced Total Natural $XX versus million Gas primary fourth expense higher is with we driven from sales at

G&A also from gas and Natural in which projects of These lower Texas in was natural contributions about our that some rate largely and gathering benefited better a by processing assets, increase $XX offset were the we million was settlement. in on CapEx offset from of higher interest. The gathering primarily systems, Elba gas Bakken. versus partially is We on – fourth SNG and CIG some in performance primarily and and South decrease KinderHawk Highland, expansion the quarter other XXXX natural benefits of in Gas by the case saw Sustaining XXXX.

$XX XXXX budget primary As Canadian sustaining you by the XXXX may the was our the than interest higher reflect approximately million. Non-controlling is where higher place public's CapEx expenditures. interest for remember, assets. Non-controlling DCF interest our in we our is of

million million increase and and million less G&A together, sustaining interest up $XX increase $XX increase that of million. segments non-controlling of million. in DCF putting So, Interest $XX offset, the CapEx of a $XX total $XX explains

CapEx ahead previously, sustaining and KML impact budget mentioned $XX negative I CapEx taxes. our our As of segments DCF to per overcoming share Harvey. ended from Sustaining to the nice the close lower Harvey in pretty we budget, IPO Hurricane their up despite budget. the entire a impact and came due million and cash to was favorable approximately Overall, benefited

Certain significant with with new and mentioned, for budgeted. was items Some was of $X.XX a expense impacts anticipated of project deferrals our cost portion quarter Steve were of which than law. an But of which billion driven billion, associated was as associated also estimated $X.X the tax by lower XXXX. we to the

future may and have Given an the the well of many although up comprehensive believe SEC given is FASB reporting Therefore, to we accurate to to some our in the as impacts. nature the to as quarters. one, one the refinement enactment date, year estimate reform report tax we it the further have company's and proximity companies

the approximately That's The investment other impairment was quarter more significant down CapEx year for million certain items the budget SEC. $XXX any KML The to from $X.X a CapEx. billion was $X KMI of have Expansion were entity. from billion. in for of expansion our across Mountain non-cash not including that does any during June KML on did CapEx as KML. spending not billion. contributions to self-funding forward Trans time include make The $X fund our

in and we million generated free discretionary $X.XX DCF year, expansion less which calculate our million on $X.XX the $X.XX For cash $XX a CapEx by we $XXX billion billion of exceeded budget $XXX almost of of approximately This billion, million. dividends. flow,

quarter, metrics, earlier repurchase million move quarter of sheet. approximately that, I'll we our the or share with performance program $XXX million one balance expected, fourth shares. result than improved a to As in And our we XX and debt the initiated purchasing

to KML sheet, the we the third JV down to quarter, times Elba of but from the X.X last year On down X.X debt-to-EBITDA, ended quarter pay balance flat budget largely end IPO from the the using result the at our debt. below times, times at X.X and proceeds the as a of the and of

numbers can you from sheet. present balance As below debt see the sheet we balance our presentation, two just

flow shares at the of with rating including net which our preferred second outstanding first those debt agencies includes statement, reconcile in of investments. ended is expansion the KML of billion the And contributions XX% down calculation about year, debt-to-EBITDA, used net look our consistent preferred $X.XX consolidate which net debt shares. shares. the million KML the $XXX equity $XX.X for terms treat you The the is KML the that one, cash. including We When and I $X.XX for spent latter Net flow. will In a Because to debt, produced in we of and cash cash distributable the debt million in we is in XX% expenditures. is of debt how which preferred quarter $XXX at quarter, million CapEx billion, billion about you. we KML, the quarter $XX net of

of other KML and items under funded just we of mentioned of working We which million. And million issuance were of CapEx $XXX under a about paid dividends KML is with preferred I million. shares million. little source capital a a that cash $XXX We little have then KMI, $XX and the spending. of expansion of so XXX its XXX excluding million And repurchased

distributable billion we've flow. year, in cash the generated For $X.XX

JV on XXX billion you of timing its expansion the little some debt sales source XXX for $XXX look a cash put accrual CapEx basis, you million. cash for that items for take you'll it That's in had from gets about out of billion, on to under CapEx. largest the proceeds working on of the $XXX had the facilities acquisitions to the of XXX asset the tax and of go KML Dividends used we almost $X.XX earlier, And debt. inventory, to basis, June share use repurchase. use took had door cash to Again, million items. Elba. preferred We contributions were a We which We $XXX billion to $XX put we and used KML includes gave other a you that inventory for proceeds fund that primarily expansion million the a legal million. of settlement cash an of distributions. to IPO about flow, number to investments, of $X X.XXX was out a associated on at you JV which billion, and cash down a cash number $X.XX fund $X.X were basis, million equity million When CapEx. million. of a of in XX and capital and If and purchases, KML capital was billion December about had That see expansion pay a was with on use $X.X That's little which to billion. under got a we then we about use I through that pay cash refund XXX million, cash other

So, I'll back Steve. with to turn it that

Steve Kean

Okay.

KML get the include Canada system, Alberta those progress Good well. to full only pipeline terminals is market. existing the Turning the Morgan all And Mountain Crude and report Trans reminder, to our Kinder as KML. for Terminal world A to pipelines which outlet consisted runs and here of to assets.

also earlier our and the projected is we joint budget expansion week. earlier in on XXXX. Terminal We've position. terminal announced it to budget position that over as Base first XX The be as and rest We on this Edmonton the this and of in completed expand the on phases continued venture and with of tanks the our expansion Terminals merchant have well largest Edmonton coming time Terminals as is years week, Line last on we the built online its our which with over to into time four course network of

Trans platforms blending So is strongest, good KML and to and storage of refiners the associated a And it all are needs transportation, that update has comprised substantial of expansion. the Mountain integral there. business fulfilling and upside two producers existing with

to but an These from the Also uncapped of protections project. key is more this estimate It's economic much-needed and year, following worth that his From support turn from the great improved a repeating $X.XX are the of final the of back Pipelines essentially that final Ian in estimate we've return on And government. gave we've has than the capacity. federal that its to portions reconfirmed difficult the cost us. cost our the If It billion right team placed adjustment needs back for our updated it lineup in shipper perspective, we XXXX to and the construction the need built-in and have we and commercial for think a are what over of cost recovery estimate, result year approval Looking with the need approvals for control. value deal. a shippers includes have total federal have accomplished recall the the to build the costs the standpoint. so not and just capacity associated Early in most with of accomplished Canadian. market example. as That project cost Anderson higher for urban our they all XXXX the in conditions. our well. based supporting recovery or to doing conditions mountain an which shown the I difficult

noted third the as shippers reduced any. from at capped our of press of benefit are announcing that cost full we our need On and be the up cost other also the on the update But ramp to spending. acknowledge overrun levels. to prudent portions, would portions more and permitting on the fact to release provincial capped the construction XXXX local the December we the the before benefit outlook, flipside, our we see progress progress In it and quarter as well flow to shippers if through absorb

been we with that. permitting accomplishing primarily what what So, on a plan we've and are executing call here's we

prudent our thing we permitting. shareholders. than do it's on managing to level for greater at To lower KML the We're spend we debt. outstanding construction. to much planned illustrate with to until have XXXX that lower First, underscore at in what full or a have clarity And XXXX that, we ended no

end a zero business with have the We the debt on strong at it of year.

the have prudent. to construction up ramp capacity when full We appears to spending that

the Just community team of declining for agreements to have are Burnaby as from our actively been working and know or typically actions But couple they construct absence we the governments clarity government. is XX% opposed key on that the municipal pipeline to it of benefit need seeking we’ve move are us. them Local able route. established even that be local when motion NEB making governments getting are from developments act the us the of A in can us there. allow permit. permits The provide to the what sure forward covering not with as opposition needed essential to the we're notwithstanding to importantly, Ian would that authorities, and granted

clarifying on have on and frames with authorizations. British requirements we some and provincial permits Second, made progress time in the Columbia authorities working

this still some but We’re progress. made we've on working

milestones watching in our decision-making the process. Here's for are as we what

the First, level. is motion for of and provincial with a municipal NEB. the and clear, and fair at broader outcome to our the the dealing establish process at permits timely motion This approvals

in on just permitting. and Second, we progress of see Numbers continuing to permits need granted. coming overall

of date. not in year, part this judicial of to half in those Third, reviews reviews. early, see part the we the And up come believe the that should government's earlier affirming through to first We first end in this strongly, first decisions if this the first year, the hope in hopefully have of the on expect to half. we but year actions

we associated we in-service schedule. mentioned. because when is where project on As and process It's of supported don't XXXX I point of with have identified the we still using work needed. Alberta government Federal the good money unmitigated And the Bottom a provincial save cost our December projection contractors Nations this of additional determine unfolded, to but with We've is the until when completed project more naturally can We're term and for progress forward we the clarity risk. Canada, that necessary the the not time have by we've many and line, needed. that this the is starting along the is route. communities First that build clear view Government put and

actively clarity have that the saw We need. we

go I'll also the front plan very positive to We the in are developments and financials with over the last we to have seen update. our it over And quarter. over that on Dax meantime, turn the that being careful with financing shareholders' And money.

Dax Sanders

Steve. Thanks,

I corporate get to results, matters. I couple highlight the Before want general a into of

significant We which in upsize million. preferred base rate markets we million launched $XXX the were a the deal to of reset nets front, our million On we coupon priced demand, to to X.X% offering able of response stock Canadian December. $XXX and capital us second completed And with approximately in $XXX a of with proceeds.

the finance expansion, United necessary is success effective Steve registered the to Also, in a KML equity we've raising and our positive Combining through reminder, facility States. $XXX the first second KML another offering generally and of fully X, this January the rating as the step Overall, mentioned. of capital with preferreds under our towards agencies. of became the As construction treatment reached eyes yet the our now million SEC get preferreds. XX% XXX% offerings,

filer other in addition the regular a to become regulatory filings will Canadian we such, documents As quarterly, SEC with and authorities. the our of with annual

ensure does will we KML U.S., our While financial intend the GAAP structure. being in U.S. list in registrant present to results management to continue and currently and indefinitely a that the U.S. efficient not maintain corporate can most

we comments are by the public shareholder that with owned reporting results I that I a I'll the the with and preface as two I there are last place significant loans to generate periods, move limited this while quarter-over-quarter owned we'll quarters, quarter value the where the my at where KML. the you the and results, a on wholly to which they results point full IPO, quarter the not will XXXX and want comparisons through with results given its results didn't more one those consistent be will guidance. the comparing one provided prior obviously of comparisons, was company compare Therefore, we to the XXXX, of to and As KML see most will from year offering did we KML be that the were Quarter-over-quarter And in review of KMI. over into FX, is we KMI published would caveat And during you those for by with for stay Interest have starting time. reflected true in that how are budget focus XXXX, earnings a power just unrealized. while with other throughout have does. publish to items we variances and guidance ask to as XXXX

next to December released budget XXXX week. fact, X we the In speak the the will on summary details at and analyst the conference components we of

to actual results forward, able budget. Going compare our we to be will

board respect has revenue approximately comparable Bcf share the million from voting derived which in for from was voting the intercompany the from quarter, from due $XX Now million about settled Segment payout XXXX of were of With the the restricted which items the non-existence $XX.X up was in lower is O&M business with up shares voting DCF Terminal with is coaching completed due with segment million certain XXXX. That KML with in is before for in the same for timing of XX of was and flow-through associated XX.X quarter year the up consistent The $XX.X earning's as $XX compared of period Today share net million approximately is results. $X.XX million restricted approximately we million from $XX in approximately total That projects mainly is million approximately $XX $X.XXX moving and which with IPO. this compared in items. income to well the G&A it the capacity increased foreign Trans unrealized and up segment, the quarter, million some is Adjusted as annualized and of the approximately about XX to integrity exchange to segment as on DCF, loans approximately $X.X AEDC the the restricted performance EBITDA favorable about With through to in million reflects associated quarter and the quarter the higher the incentive. O&M which more Pipeline of loss guidance. that are Mountain dividend quarter higher associated a million. is X.X increase derived XX%. XXXX to spending earlier of certain with quarter per a XXX% in income same DCF net $X.XX excludes from which and up project, earnings coverage approximately XXXX. third or respect the Pipeline income, of per previous announcing net into $X.XXXX million provides is to ratio the the the of period for was earnings approximately primarily cost of declared QX reflective

higher post are up of true intercompany Interest cost XXXX. due that to XXXX from approximately approximately Trans capitalized offset mainly in a Line primarily losses on from higher by million a versus on were approximately period existed segment Cash and by the of revenues $X.X timing a on expansion QX on quarter same with project, banquet million XXXX compared no with longer due favorable of million partially to costs allocations with South higher Mountain, Terminal halls. is compared and same Vancouver unrealized to associated G&A lower timing Mountain associated JV of taxes of absence Cochin. terminals Edmonton in Wharves. essentially is Imperial. of mentioned Sustaining approximately notes in place exchange labor IPO The Trans $X.X on XXXX million I $X.X higher slightly greater spending less to the the quarter Base that G&A relevant million flat primarily which spending All result $X.X of to with on due primarily offset $X.X on our The partially intercompany the are in Terminals revenues was that true-up lower repayment foreign to as from is company. by loans. revenue capital public being a higher and

where to we recap briefly where to Now came the in year compared for we got.

million to and XXX During and year in between the EBITDA XXXX, come including that million. IPO that the we $XXX DCF be the expected expect full to said and between QX we XXX earnings pre-and $XXX million call, I periods million for post

the $XXX In XXX million in at EBITDA and DCF approximately came for at approximately fact, million. in came year

primarily $XX for fees, capital expansion distributions, of and cash. million of expansion working million on of charges to on the XXXX. move to proceeds XXXX from cash million working increased for million net million. which Now assets AEDC attributable CapEx, I'll cash other increased due million AEDC which DCF spending million the to paid the $XXX $XX plus year capital sheet of end approximately of construction due is by direct primarily million net comparing Cash projects. to offerings and over of facilities. few less before $XX of paid comments on offset that's to Again, XXX million $XX.X costs AEDC preferred debt million approximately balance debt excluding increased is $XXX use XXX issuance unamortized Bcf year a end approximately on the of $XXX million $XX Deferred XX of proceeds PP&E or $XX XXX

almost decrease KML of of we and which have the by we almost a balance loans. of Other Long-term which off that's with result facility to of and ended the and payables paying KMI quarter On consummation decreased entities minimize zero billion $X.X side mentioned, a debt intercompany as intercompany from in the $XXX the Steve sheet, both the at current year right-hand working the total construction million as primarily at balance is liabilities capital remained facility. decreased debt zero, since result the by the IPO. to endeavored

with balance, consistent with net prudent net to approximately which debt our spending even zero-debt As the preferred approximately you net only is adding million can after cash Steve's on year position the equity of we is comments balance; on debt of our million ended by XX% PP&E. our with being see, $XX $XXX

to a offer expansion of capital. comments want Finally, couple on I

project, left Terminal $XXX we've now XXXX. spent share million the Line our Base of the of million total spend $XXX with to approximately On $XXX approximately million project in

in prior Mountain turn with consummation that as period IPO total KML approximately the back Trans spent I'll by million to million it million and with of to since we the the $XXX expansion, of now spent over XX/XX the approximately IPO. of have of On just $XXX Steve. KMI $XXX that, by the spent a And

Steve Kean

All we’re for ready right. Sheila, questions.

Operator

you. Thank

Salisbury comes [Operator We Ann will session. question from The question-and-answer Jean begin Bernstein. Instructions] now the first with

line open. is Your

Jean Ann Salisbury

Hi, the that. a just congratulations Coast Express, I Gulf of had on about couple questions

business The or specific these is kind first wondering seems to entails? GCX you three, Permian And this owners four a on the now maybe like on is it of doing And how the lot. I partners to was in the what give one do project? color could was if you pipeline any gas join the came all think

Steve Kean

here. think, let anything Well, I'll Tom and miss I expand I if

partners. of the players bringing volumes investments that very They upstream glad first they're Permian making to significant are They have are those think, to all, we’re Basin. project. significant the in significant and have they I

We are to them have happy in.

Jean Ann Salisbury

Yeah.

Steve Kean

think their project project. through while It And to and for a in a did because think they got But we it's the it that I the volumes worked being to all the bringing have we out. JV are get very stuff and they strong good demand take project. interested in

business producer I investing think very of in in both infrastructure. parts there Targa segment, midstream interest And, certain are the course, DCP and that is already. in it of much in

and of sector, there do in investing upstream already the in that in the business. interest midstream But think even outside from midstream they're projects midstream some I are in Anything? sector. they is So, investing

Tom Martin

capital really I as lot all point, a as -- they brought table of experience I that's projects. No, a together three running mean, across commitment think major investment significant have main volume with we well the the and

for opportunities, And on the far I situation. So, project. it's I as just depends this good think it merit really mean, other a as really

this might good other develop one, very feel to a two we and is I looking on projects as projects, and our opportunities it opportunities there the again. scale nice at those think But develop. like think partners do commitments fit in with we incremental I execute similarly volume certainly, about opportunities of if this

Jean Ann Salisbury

that permitting remaining should XXXX October thing of up? it Express? the optimistic bigger as to for is the we how helpful. then for a And kind a major could Gulf That's Okay. milestones then just What follow-up. are that there cause Coast Is watch And start split?

Tom Martin

No, I mean, it’s…

Steve Kean

ahead, Tom. Go No.

Tom Martin

pipeline intrastate an It's system.

building about period. through of we working local really we’re that this and as is process pipeline really feel have getting in So, Texas experience a started And in-service now. good lot But our jurisdiction. XXXX of of

Jean Ann Salisbury

all me. Great. for Okay. That’s

Tom Martin

We federal certainly like have not process at de-clearing permit hurdles to the level. it's a clear, but XC

take doesn't long. it us So,

Jean Ann Salisbury

Thanks a lot. Okay. Fair enough.

Operator

comes question from next with Credit Kazarian Kristina The Suisse.

is open. line Your

Steve Kean

Kristina. afternoon, Good

Kristina Kazarian

Good Hey, Coast afternoon, a guys. follow-up Express. Gulf on so

from thinking in get flow as on follow-on the on Gulf Beyond well? going about Permian itself, upstream bit for you're be assets little this your the impacts how downstream we about to and cash the the should project the talk can you both a side the

Steve Kean

Tom, go ahead.

Tom Martin

afford some incremental the into the opportunities synergies there's I growth to beyond opportunity and transportation on the project. clearly, mean, both Agua connectivity incremental Dulce as a we've of I EPNG all into network And for base the creating what baked think at our and Mexico LNG, to we're lot Yeah, opportunities themselves project. to

as all as further opportunities and that particular grows, I in the service goes into Mexico how layered Permian, storage volatility that Texas, think Dulce. in on out to I will those think LNG top, provide this even is opportunities Agua well project the translates to beyond as as

those all be opportunities that project. itself upside will think manifest I the in will

Kristina Kazarian

follow on And ask as well. I'll a Great.

the set a could project on point, I how project, just you to level Or we and we up shifted guys milestones is that December TMX this that the clarity that those if here? updates That revised talk be around progresses? and as conviction wait at may hit for with continued it come timeframe And appreciate the there. date? XXXX, On you milestones did

Tom Martin

if the date, XXXX time, having from schedule to passes, two project another and and that's sand unmitigated two partly an partly the out have that we that the weeks project we Yeah, a passage And we a date. move from mean date weeks. there stake another December of development our doesn't reasonable need our believe but we for just to expectation out of planning that put that set in --

We have, it. we'll date continue ability the project and that around to we our to think, plan meet build

Kristina Kazarian

versus a quick fundamentals, just of Gathering bump Can one real a through regionally? they got XQ you saw think back And you volumes, it what Perfect. talk numbers. I our turning kind on there. 'XX

Steve Kean

then in well in in the Bakken Tom? the And as additional Eagle Bakken, as saw in Ford. drilling activity driving and upticks and We Haynesville and the the Ford, Haynesville Yeah. Eagle

Tom Martin

good the plus, about are overall, Harvey Yeah. Those But we got really incremental level the there's think those primarily we I QX. in QX efforts our and I we the same -- impact volumes Eagle didn't have Ford of drove re-contracting feel position. that interruption think the in

about the excited we and very but go into as XXXX Highland Bakken in think, and I XXXX. Haynesville

Kristina Kazarian

Perfect.

Steve Kean

we probably And then the Harvey Harvey QX. again. bigger QX effect was in have freeze then But ups in and

Kristina Kazarian

very much you Thank guys.

Operator

with from Zarahn Brian comes The Mizuho. next question

is line open. Your

Steve Kean

Brian. afternoon, Good

Brian Zarahn

Gulf project that over contracted. finish I'm Express, you're line. happy average the Hi, Coast to everybody. get sure on Any is comment contract the duration? On largely

Steve Kean

Yeah. They're long-term contracts, meaning XX years.

Brian Zarahn

interest XX% then a in Coast Okay. XX%, is your And project assume a backlog Express? Gulf

Steve Kean

It we think it XX%. put Yeah, XX%. to at could But it be at XX%. we it we took I put XX%.

Brian Zarahn

XX% option interest when that does the shipper for acquire expire? to And

Steve Kean

End of this year.

Brian Zarahn

cash End you another your the perspective, on on tax out of How taxes reform, do the on the assess year. corporate pipeline positive pushing of impact lower And business? gas then that a tax year.

Steve Kean

Yes.

the is that so mitigated developing will a The is on been of our time. we is and changes you a the been it. to this of give this, over out perspective potential shippers rate our And on meaning think answer me systems, be to that's going flow-through that that issue. there's short spread impact tax lot of let So,

have the max mitigated it's an impact be. for negotiated to what you adjust will rates. And to is and going discounted adjustment rates because So, rates

of vary mitigates service, extent rates you place, and were impact. and the cost depending have which don't the in or variations that negotiated So, you negotiated rates have on discounted

the And not of isolate don't some cost or under are likely of We think way We of do it's that service. action. we the revenues should in also law our changes immediate with to it be considered separate also believe kind arrangements. can the along other was about FERC those think tax because for that mitigated by the the FERC XX% change

individual We all systems rates, have also we blackbox have under rates that is didn't many cost settlements final to the the where agree on service agreed we of component.

commission we service. one established element on itself considering cost So, well that of selectively think it's the the nor very and adjust overall pipeline the without the cost needed of service

our So, over X and of is Section on out Section time view it plays this itself proceedings settlement. through that periodic X the and

Brian Zarahn

week more this off other million we your little XX of roughly question. I'll know parts? a on and were a Analyst end or count the less capital quarter, at next was share bit fourth it a I'm Day. Or buyback? leave will issue discuss there housekeeping sure any the complex more I moving subject The at

Steve Kean

XX Yes, shares. million

Brian Zarahn

off year? end the of XX the of And number then end the the is right for the quarter million the third of

Steve Kean

Yes.

Brian Zarahn

you. Thank

Operator

Horowitz Darren from James. with comes Raymond question next Our

is line open. Your

Rich Kinder

How you Darren. Hi, are doing?

Darren Horowitz

you fine, is hope me. Steve, I doing addition. and quick ones Hey, doing I’m for Rich. everybody well of a couple in

granted into get pace I threshold of incremental permits quarter from in can that the around to partials are you this your first you know But and the XXX. to spoke which over is comments being confidence do the for we relative what that needed week almost were the that TMS milestones XX% drives The was of I regarding what permitting think was remember I think and progress granted? now. going terms about last you a

so are or the or the out beyond has of it permits Ministry that by of now the Is sits X what it So, next it year? critical that? or as for X needed developed still Transportation Spread XX are

Steve Kean

timely we've process got the the I and is we think in really for getting consideration main think permits. reliable Look, a that factor

we timing begin can going and there's But be are before it count to that process see that all construction. and going We to place would permits get that we the to need is the a on in not we reasonable. do

we are be confident that going to finish. So once we can that start, we

arrangements – no the at think there's the cetera. count. We on any we that not it's have certainly that, deal meet number that permit good more with we about the sitting absolutely. we going look delays. permitting through how got on So, I sure are will are backstop But we've undue around here making magic working that et agencies, But with of requirements process, to also the get a

Darren Horowitz

can gears, do to Texas That comments How get between effectively and firming such supply? in much on sense. Eagle currently a back balance exists that you that then think your supply Ford Okay. achieves rates? switching relative capacity market And overcapacity makes pipe KMCC. takeaway South And to you when

Steve Kean

Eagle headline the or climbing, numbers But Well, than a X barrels worse of takeaway the it's reality. million the Okay. probably capacity. so. while there's we million Ford think is that is barrels day X.X And probably

we've reason system the the the Now over is continue years, number that seen headline supply the the add up and the reality end worse if report they to look built you end both at volumes on that to say connectivity system go that the I as products the because, we has team market and than is pipeline it.

there. was share. share, lot capacity a point But is, there's So, right, market making market we're taking the taking I of

good and Houston we that Ship renewals multiple gives do system access got to But on on as And system. way points to people so, a to and think it's that appropriate. Channel. we'll we’ve we have a into share to the well as where corpus take great discount Houston And very

think our well fixed. we so, well asset that is And positioned and

connectivity we'll ways volumes the Ford and for add Eagle and will be to we'll grow So, look to thoughtful about re-contracting process. continue

Darren Horowitz

had. That’s I Thanks. all

Operator

America. question Dennis Bank Coleman from The with next of comes

Your line open. is

Dennis Coleman

Yeah. Thanks afternoon. very much. Good

couple the on of Trans Mountain follow-ups Just project. a

that December the it untenable get does comment. three delay to release seemed And it We've potential You talked a like the had leave position? you this extended becomes to on another the where proceed. begging. fourth untenable bit about But little you that now circumstance What's where months. directed that fairly unmitigated a

Steve Kean

which what think everybody. our and doing again, customers, I of for is investors, are here things capital to stewards are the And to order the we're position, that in in for an think made proceeding. that proceed. our we're for relief we've we're can all careful we've point asked filing, expect clarity for in doing regulator. the everything our to seeking need we basis the that the carefully that's We untenable we the I – And right find we ourselves on is don't from Look, that get we – being but

our to same to we so, we we And regulators. the That's investors said the do thing things. said how

Dennis Coleman

Okay.

been there's filing, I see. regulatory the So,

Steve Kean

Yes, correct.

Dennis Coleman

the be repurchase on May a different share program. Okay. one

done the right you that do XXX kind did July. for -- gate over you're of XXXX? see You of cadence mean, time of Is I horizon December. now the What you a in you're by out that out it if longer kept Is gate? cadence, that it

Steve Kean

price think we is stock guidance buy. is not specific giving attractive be I'll will opportunistic is of that there. it. about that, our to thing we're other we a couple And Yeah, One things. say the

We and be is alternatives cash well. our an will price But what look could for the there stock that project opportunity as at are attractive buy. think we

So, giving guidance. not we are

Kim Dang

we or flow either to growth budgeted new I'd distributable Less through this discretionary share for is in repurchase, thereof. $XXX combination allocate have the in what you Yeah. cash conference XXXX next will will some down free say CapEx, And projects, we Dennis, million for when that paying about look week. at XXXX, less go dividends, all we flow debt cash

Steve Kean

of even Yeah. real our we generating to are kind internally excess believe want the cash with debt, Drive company game strength which balance the the all have and is of flow. of all cash use to every down sheet purposes, That's those at believe we for be it's the of I needs we beginning that's When the cash our plan. shareholder ultimately, of benefit funding stronger. that the and making flow if call, in various just paying the where

Dennis Coleman

you you accelerate week. established One Any question useful. That's nice program? here? more in some more program. a to stick years prices can. get I'm we've seeing next the last seen you're if little here. out chance you'll But will very recovery specific of a what commodity I And with with have Hedging, Or the Okay. sure

Steve Kean

will stick the we with Yeah, program.

investors. cetera. within et lined opportunistic hedges we in We put parameters have out the stay little on, of are a terms there we But we when for that

Kim Dang

go And the say Dennis, could to prices, be and I one the the prices. like We we XX% Yeah. at parameters. We of parameters, the XX%. mean, the maybe We And we don't reasons XX%. within like XX%. it stay the between

But bands. within I the going within to opportunistic are we stay the think band. we're So,

the of reasons do One some price. that that costs tied we have are oil to

very And go price mismatch. so, you different different market the to price, you in a than when barrels tied that's if can a produce actually hedge you very a you cost have and to a get oil structure

is environment the found actual to price hedge a time the the executing we have where that on mismatch the but execute producing. help are so, little and And we to barrels having way a a to have hedged best get program over price on from

Dennis Coleman

the over are. the it's what worked just Thank helpful. to That's last Okay. years Obviously, you. XX prices so question

Operator

CIBC next Robert comes The with question from Capital Markets. Catellier

open. is line Your

Robert Catellier

afternoon. Hi. Good

Rich Kinder

afternoon. Good

Robert Catellier

issues with the success baseline you that the to to full go issues deal I One two on Trans the judicial the results. here second and had two is can process on permitting so construction. the just can far the is establishing that there Mountain I on on before Congratulations is reviews. see questions

you judicial So, could reviews? with the establishes dealing if a NEB for move but process can conclusion the forward clarify if of permits before you the

Steve Kean

Yeah.

that like to decision. look, we in think too the you the and Council I to months were to, we the did It government decision our like looks the see an everything which filing Gateway the First Nations read guess there not as and is that And primarily Northern did engagement, guided to putting granted it did thing, we judicial in us what cetera, recommendation. of that it now. government think getting if And federal was NEB model Order et they look review, frankly we I et in supposed read ago to because central to federal that review outcome a the want together of the that was do by it, looks our everything cetera. supposed right, the more, XX we that's in order, back participation us terms in is

So to that's But belief. pricey our it's wrong be that about belief.

expecting, see play we'd And we out. like to see outcome so, to the that we'd like that but come that to are

Robert Catellier

on Thank update brief you color. of The right last good us the you. question That's just way. Can Okay. give there? is a

Steve Kean

so Yes, are middle in we routing the the at of NEB. hearings

place Chilliwack Some regarding taken today. There's already. one have of going on those

as We have well. Burnaby coming up shortly

need the to deal where and where procure. so to hearings in the my those the those reach becomes compensation an or are. we to right and the are And And question the can route, set of we proceeding schedule, what's the two first. get level and of And have a get the But They involved? determine we are they we need objections, the on we have are. opportunity then thing entry with is of If we we main route compensation places unobjected then see entry a identify we arrangement progress. objections route level. to first, the according right the where to mind But lands

Robert Catellier

Thank you. Okay.

Operator

The next with question JPMorgan. comes from Tonet Jeremy

open. Your line is

Rich Kinder

Jeremy. Hi

Jeremy Tonet

more that you with there. could Hi you Bakken opportunity far It repurpose Hiland, if extending update wondering a from takeaway good want us us level, kind at is platform. for you like certainly growth the could the Do you for see just if the price basins. there afternoon. how was seems your how commodity of outlook are things and see progressing second I there assets just to just turn update as as to and wondering

Steve Kean

Yes.

it grow, the gathering processing continues invest, continues this to pieces. is investing continue piece break capacity. an which to opportunity us and and I'll there there. be our One into for two We've been add growing volumes of So, are to to

paid and the space the the than is a over piece takeaway it's filled so other take may of bit piped, and the as Eagle as growing what I the projection front. less Ford in more there this growth is you for and good overhang is just capacity in is it. DAPL and going a the transport is it takeaway the the But on with on Bakken think The faster fill, Bakken away transport in-service

you hand, LLS to of kind other you gets market. an price On to the HH gets DAPL ultimately Cushing;

fit. So up a in cause the point that capacity like else is does that NGL capacity that so it to to and there. nice is what is to to a you conversion us things be looks evaluate is than other appears short of takeaway And regard there short but that one it nothing of specifically of to candidate, potential us

Jeremy Tonet

Thank it helpful. from That’s very That's you. me.

Operator

Richardson question Tristan next from with The comes SunTrust.

Your line is open.

Tristan Richardson

afternoon. Good

on as Just flow phases, in with units there, timing flow initial distinct each unit Cash cash II Elba phase as and Flow Phase comes follow up? or come those will follow cash two does respect

Steve Kean

Yeah.

two So, things that. about

We around do will majority unit the when first as with associated the cash the flow, said, is of next Elba majority most have the more of the we revenue I is, in-service. the is cash of detail some the getting – flow conference it week. But

first of all is as manufacturer diligently getting we’re that's into unit Shell and – the the and but their weighted so, toward it's working units And service. upstream on

expect, you'd in on units focused first service. as so, very getting the we’re And

Tristan Richardson

Supply. respect the lastly any straightforward but Thank if seems there's with just And Louisiana to… on Southwest contingencies has shipper just It you. then Great. curious

Steve Kean

was what Sorry, the question?

Tristan Richardson

Right.

It if year? like potential is cetera? on facility has shipments your timing the any already are delayed, there is [all's] – pole downstream sounds the this Just contingencies end first quarter et shipper the in

Steve Kean

The the transportation do facility contracts when not into does. service go

service work transportation project So, of no But the another their to in customer delay – we the market help try we our and or same contract. capacity. there is would do them monetize as with in situation the in

Tristan Richardson

guys. you, helpful. Very Thank Understood.

Operator

We are at questions this no showing time. further

Rich Kinder

joining this day. Thank good Okay. much. afternoon. for you a very Thank us you all Have

Operator

This does conclude today's conference. Thank you for participating.

this at disconnect may You time.

Kinder Morgan (KMI) 17 Jan 182017 Q4 Earnings call transcript