KMI - Earnings call transcript Q4 2018

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Operator

Welcome to the Quarterly Earnings Conference Call. All lines have been placed in listen-only mode until the question-and-answer session. Today’s call is being recorded. If anyone has any objections you may disconnect at this time. I would now like to turn the call over to Mr. of Chairman Executive Kinder, Kinder Morgan. Rich may you begin. Sir,

Rich Kinder

Thank you, Kim.

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

SEC for making on outlook encourage described financial full use Canadian Before forward-looking releases, the securities cause decisions, to assumptions, you and earnings outlook to important strongly non-GAAP material KML’s at actual territorial and and from any statements. we a forward-looking investment and review end read in materially our and and latest differ of measurement of of those the statements risk that disclosures commissions, set expectations provincial forth anticipated results such financial filings KMI’s and and factors may financial list our with and to

Before quick turning to the team, and remarks. a make call let me the over few Steve

to we our see from that how assets growing can get the lots you is cash our results deploy most suggestions overview XXXX On strong benefit and way our of the shareholders. is analyst and excellent already This released, As cash very at budget generating good XXXX a are obviously investors. that KMI from question, and but question flow. effective we thing in

buy-back it capital to four so out can projects. down debt; in different pay and to cash shares; said the pay we for frequently, have we to As as dividends; to reinvest purposes; use

used three of past cash in varying Over years, all have degrees. the for we those purposes our

of for in to We've had to S&P $X.XX reduced level, $X in XXXX XXXX. the billion dividend in in XXXX, upgraded and and We debt-to-EBITDA credit our our into X.X $X.XX intention our raised $X both XXXX by it debt our Moody's. increase and targeted and reiterated ratio off rating over have paid by $X.XX to to

million We growth have we capital over sources. shares bought access and back have worth to funded of without $XXX external leading our

view positive story. my in that's Now pretty

about the money investors cash disciplined flow flexibility strong believe cash that prevail but our provides. a can benefits will use gets allocated, how that should You continue the way our shareholders. overall I flow most And we appreciate to in this

times shareholder the shareholders, interests the we are As base. board the significant our management of many rest and of Steve? have with passu pari so KMI said and are

Steve Kean

Rich. Yes, thanks

drives will expand our you take CFO on dividend your over As sheet, experienced growth. overview, KMI usual, and questions we new we our to year-over-year the it numbers. you our then Express the pipeline will extensive in that we Dang, brings Kim which which for Gulf will highlighted we'll performance. and David gas turn to to give a you to level attractive with President, to I on invest as to earlier Dax to KML Express an by across be growth the Project, Then KML on of Sanders update updating added us our and you and Michels, through year from is our our expand That segment both We and high day US U.S. be Gulf KMI start where XXXX an take another natural opportunities the our our our a business, year and in gas backlog, experienced the on basin at like network. Project, companies. project as intrastate you quarter for in we segment outlined Coast. performance KMI the projected creates network opportunities balance significant We transformative increase opportunities record Permian X brought bcf to continued expansion growth find additional for to to year supply returns We fourth solid That our demand strengthened capped and network online natural both our contracts. increased network. of existing value and and a the on largest capital projects Permian grew the natural saw attractive our outstanding long-term by is gas. secured new segment, Coast project, country, The Pipeline update

We well capital the sheet. parts strengthening Kim our in of balance through we Dave of other part and our our have latter take We during solid We our as results. made expansion as expenditures you XXXX will and contributions XXXX. since self-funded progress from business tremendous have

to end We multiple also in the balance sheet EBITDA and exceeding to CADX.X to both the and allowed billion Expansion of to to the a times, times our Pipeline our we sold with XXXX and while Project transaction, is strengthening entities. measure assumed KMI that A our of return at was transaction plans. That large year substantial able enabling what result of shareholders, as our Trans Mountain the KML Canadian. value the Trans candidly us our Mountain were goal debt X.X of X.X which de-risking

release, XXXX we're had year-over-year good in well. as XXXX XXXX we So very we a showed expecting in as good and our growth guidance

timing on call. right comes before Day. will The always XXXX we of we call our will results -- as focused be do our in this we cover Investor today's Now

have details With at that to that, over into the week it and on that go will we'll Kim. time. We XXXX turn I'll next

Kim Dang

Natural had another there was Thanks fundamentals quarter, strong. Market outstanding Steve. very gas up it X%. remain

driving diameter day from increased increase. year, a a is This pipes. on results approximately a our bcf a natural full day nice or For bcf the large X day, demand XX% to XX bcf approximately XX gas

fourth higher on a for the quarter Deliveries Overall up versus exports system, to cubic system day cubic and quarter Steve Power system XXX as in For a day capital Kinder million XX the volumes the fourth million quarter, a a bcf approximately in spend XXXX. growth. Morgan the quarter transmission feet resulted drive expansion was our over of quarter and demand that's X.X facilities in approximately bcf per growth a transport came increased lot a XX% will nice bottom-line LNG were day a longer-term cubic pipeline Mexico said feet XXX up to on were increase on which without of of and our utilization day. the need feet the little this over billion to our opportunities.

in GCX, we sell is On underway and gathering to On and the currently the and were quarter side, we and first than opportunities Elba slightly On up over we an remain will anticipate that are capacity. gas the we're PHP, On and respectively, just production capacity crude seeing Haynesville, XXX% updates Project, In bcf are the end of XXXX large for doubled working runway, Eagle be and secured currently have increase the on growth. XX% we quarter. that October over On of further. by the about projects. the Liquefaction identified systems, in per day the nice the target construction to supply and Bakken our volume higher million Ford. the our a XXX now driven volumes feet Haynesville, the our by volumes A a we've cubic service XX% few day. at more the in on also

our is the and on delayed, Eagle due Double in material from do Cochin, In and not Ford. lower our contributions offset Crude way that’s to given on delays volumes to to volumes benefited from somewhat to has this with fortunately due were continued contributions consistent Of segment, contract is Refined XX% pipelines increased our we and have pipe. that a KMCC Utopia, impact volumes but expect X%, structured. the by which lower the product commercial up costs, condensate be course increased H, up construction from rates EIA. on our the contract and were we

Ford, Bakken, up Eagle down those However, impact the by there in volumes KMCC, more NGL where were the and volumes on XX%. to pricing the volumes incremental said higher due unattractive of in volumes product offset differentials. XX% I as than was lower were the

given nature financial here minimal of volumes contract. have our However, the impact lower the

Our of was to in and Trans The from South was down Mountain a Mountain, intercompany weak eliminated terminal payment as an sale prior is X% quarter. the primary transaction. business the Trans Edmonton driver to

than lease would segment been terminal Excluding the have less payment, X%. down the

expansions Our accounted for was the North the liquids Houston with XX% from Alberta weakness business in and approximately offsetting flat of segment was essentially the East.

higher certain to and Our primarily divestitures bulk business and that’s contract volumes. down expiration asset coal lower due was coal, to despite a from contributions customer due

up Coal were volumes bulk almost driver coal XX% X ton. the in volume. being largest the was tonnage with million quarter up Our

up NGL of by was average volumes. at prices offset we offset reduced quarter. flat fields. volumes flat liquid COX segment versus were crude XXXX benefited price and were as in remaining year XX% remedied. down to the up were plays that lower in NGL our planned Cotton ways last crude with oil fourth at was lower to that volumes essentially X% increased quarter smaller plan a field. year. has versus Our production from quarter but the X% largely oil that SACROC, SACROC significant since our the continue lower They volumes the by benefit but was were utilization volumes due Net X% above volumes higher COX versus to in and access but find last below outage, Tall been budget,

despite oil have a was offset increase we in WTI the X% WTI price crude Our differential mid-Cush place that’s higher increase net in price. The well down in the in price. hedges and the as quarter as the WTI realized the

we substantially David And segments. update the I'll we For the told over the on And it you XXXX mid-Cush with Michels. that’s differentials. as previously, that, hedge to turn

David Michels

XXXX, share, over for our XX% XXXX. our dividend for plan $X.XX that’s with It we’re declared Thanks also and dividend to XXXX. Today, declaring full in year July out the represents Kim. budget that increase per shareholders $X.XX we round per we announced share which consistent XXXX $X.XX declared the of

of and plan nicely grew year. quarter distributable nicely above above from dividend generated fourth quarter our declared to flow We strong year KMI very a XXXX. full X.XX the off last times a also had the and good ended cap year's We meaningfully very and for cash year

$XXX as or addition, the and and Moody's credit up mentioned, by or costs S&P's significantly during and revenues upgrade strengthened down Steve the from fourth both we at earnings, million full helps XX%. BBB operating year sheet balance In were as rating our million quarter each strengthening On mid X% in were mentioned. $XXX result our XXXX Rich recent that

quarter there little both in quarter were of and items fourth create a this that XXXX However, noise. the certain comparability

a as GAAP recorded businesses' we that occur which define are under ongoing representative reminder, we capability. not items believe are non-cash sporadically, that of are or certain generating As items cash

to available have fourth quarter increase. common the stockholders operating be our we $X% fourth of go $XX cut. -- taking per business' large share tax would example per been of change of our or in driven period a which This as $X.XX a That’s So Net items, income can XXX% XXXX the the items over would $X.XXX or or operating very of billion up fourth from as million a of reduction assets make the by quarter excluding are share, XXXX, income versus certain period. the items quarter tax $XXX was it for that good difficult is deferred increase compare in rates certain performance certain was $X.XX XXXX. through million Federal to an

$XX quarter adjusted of million of over per $X.XX share of $X.XX, Adjusted certain versus earnings items, this improvement quarter earnings than last we or generated Looking first higher quarter XXXX. the better that’s million $XXX fourth for $XXX adjusted at XX% or is XX% is year, which quarter quarter. all in million earnings

up gas share quarter, segment on parts. up X% and $X that growth. is $X.XX per fourth million X%, for distributable of segment Moving natural the was largest to or from driver gas $X.XX benefited The The flow, natural quarter that segment the the cash multiple XXXX. EPS in of was or

capitalized up by offset lower through both assets and Kim and partially CIG from mentioned, by EPNG Basin Kinder Ford. increased Hawk by due Mountain. Texas Haynesville commodity up, Highland was were Trans or were As G&A prices the South driven Mountain Those are which XXX%, was growing primarily $X by our a the on lower by expenses production. expenses amount down was of growth. the offsets DJ and interest overhead greater driven by lower from assets Eagle we volumes NGPL in and impacting incurred more also which million, sale of arbitration into balance, Permian down during drivers to down Kinder COX received $XX $XX fourth projects, driven Trans Morgan as August. and driven and from million [geology] down were spending was to that’s Interest of to million, change non-recurring Trans for contribution Mountain due those million the than of having and or and rates, segment G&A higher ruling a due short-term quarter was general an as the closed the $X million, cover were Product amount we $XX sale, is a sale lower XXXX -- $XX well termination. main behind administrative from KMC greater lower on income calling terminals the proceeds. interest debt up the segments. higher expense contract Canada earned supply million benefit both

state were higher lower the tax mandatory conversion Sustaining were $X First of higher securities our versus capital in driven taxes $X October. was occurred refund. million, stock dividends XXXX. down due by Cash by million convertible quarter the in to

was sustaining Mountain sale budgeted for Trans capital the we of relatively XXXX Trans Trans was shares what contributions the from X%, but or was CapEx. is X%, Total by sustaining gas up $XX the dividend, of by except the preferred up as capital incremental stock. to partially DCF effect sale offset greater be close offset for for the natural up on $X.XXX would $X.XX share, billion our Mountain. Our consistent lower are partial the main year budgeted, expenses driven lower ending product million higher plan That Mountain segment than and with XXXX $X.XX partially and stock sale. DCF G&A DCF or of same gas, of natural from conversion share by with per sustaining higher drivers per and lower we preferred

versus XXXX X% XXXX. compared DCF $XXX of year year $X.XX XXXX or above and DCF $X.XX share per share million XXXX, or up full full the per was to For X% was and

per billion of was For up $X.XX from our the our full-year year, $X.XX up $X.XX $X.XXX or million budget, share X% the DCF and and was higher. our DCF for relative from to $XXX budget of budget of X%

for differential performance liquefaction budgeted full-year as nice the Mountain considering of plan sale very all we the had Trans So receive. the versus well, of and especially NGL

all net cash the we portion the those $XXX little quarter, $X.XX both quarter, an just that now [indiscernible]. of last our sales you growth quarter of million both quarter. debt X.X million have the approximately Trans used shares, and we year-end Mountain to than driven and January Mountain a of to to We changes from share the was figures. in is million debt-to-EBITDA holders. billion spend I of in well on balance sheet X.X, of bond and that we Quarter are sheet of [QX]. to million we've of X.X proceeds driver times largest a joint and much of the contributions billion, here for a sheet, our largely proceeds year of improved turning public change, Net did the the consolidated of which coming down included a of at largest the and end $XXX million, of been Obviously, by we times Now KMI The on estimated growth to improvement, going last year-end with distributed a the year those $XXX bit KML $XXX Including pay at more we last X.X balance of note like had little had largely KML refund X.X balance cash to of of all public debt-to-EBITDA $XXX the $X.X two while Trans our from are quarter X.X full reconcile includes on for to the XXXX adjusted KMI. billion That sale a see as February. tax KML's XXXX. and which million, to repurchased of the ended remainder million driven million DCF, year-end are from $XXX the is cash, would say in on $XX.X we our budgeted $XX by to here Trans we net $X.X we fund shareholders Xrd, in most that reduction Two up ventures our as the capital was is billion as PP&E, increase at than source $XXX sale. CapEx of and in quarter, from decrease the dividend maturity had to that’s better revolver Mountain

public the by For to the $XXX working share divestiture turn billion $XXX had billion billion of billion repurchases. a of $X.X dividends, proceeds I'll was payments billion, KML Mountain shareholders' million, portion mostly $X.X the million year, million because growth that, DCF, Trans the lower $X.X our And CapEx of with and full billion of is our reconciled lower back of $XXX that But then refund of Steve. $X.X less we contribution debt $X.X capital JV it and use $X.XX proceeds by which of to driven of have we [debt]. those driven largely late at

Steve Kean

Okay, going turn you we're updates. KML Sanders give now the to will to Dax and

Dax Sanders

Steve. Thanks

general you get the items. I into a want few do to I update Before results, on

almost share. in for approximately made capital return $X.X More to as distribution Mountain the promised restricted with on billion associated release Trans sale First KML specifically, $XX.XX the January voting of we Xrd. we mentioned, a distributed shareholders

meeting agreement We you of reverse With sale approved customary that a capital split to a Mountain, working final Trans the calls adjustment. also November. for stock the X:X last was that the shareholders' completed at respect recall will

or will and of the government as through payment Canada, believe back Government of a million are economics Consequently, with and and and will contemplated. was This should and in the that be Government change of in purchase quarter first the the an we deal an the the deliver process as through than $XX communicated viewed cash you less debt have impact approximately have that rather the position to to of lowering KML. review amount. such, in at calculation net as making walk we minute, cash of closing of booked previously it the this net price otherwise adjustment cash on to final not us adjustment I'll substantially the result reflects the We that this final not the a simply a

to Moving entire essentially the it quarter nicely the where first for this front, the and the contributed business quarter was in-service baseline is to portfolio.

end $XXX spent year, have our million spend I of compares the $X over estimate mentioned and As million with million have the our cost total we of of of is million. The $XXX result of the a the project. with previously, the of $XXX on share share $XXX to approximately project million remaining it just with savings original as

is mind topic review. a know Finally, everybody's is I ongoing strategic KML's that on

While are anything call. to will by in is the we next review we hopeful direction completed earnings the don't since have announce to we ongoing, announce that review the have

time, those discovery time is this price given options sale and the and term of the cross that range the border necessary review process we options strategic some of require While company taking takes time. that third-party evaluation taking a or and of and are among the is the the are options complexity, combination fact

exclude same are for voting is in coverage on and of operations fourth continuing to from proceeds from reflects from and that XXXX. million discontinued offer skewed quarter we quarter interest million a terminal which as towards $XX versus income generally much derived up million associated the Board of and for I Earnings of million almost biggest $XX with I Mountain is one same X.XXXX approximately on voting in contributors for million consistent quarter those approximately only million I continuing moving to the more to and per talk declared the approximately KML continuing ops, $XX.X the $X.XX the tank a mentioned. adjusted results and income operations, from guidance. results $X.XX DCF share Mountain the obviously period provides revenue $XX operations almost note, previous which online sale. associated of $XX 'XX restricted Adjusted the which approximately that $XX the Today, relevant. from annualized, interest the reference up items, million is due XXXX. I'm from income from continuing is and operations, fourth to to XX%, comment believe ratio increase of split the continuing that compared payout Now $XX the is which going earnings per payment operations with Trans restricted results, do certain is approximately with useful baseline DCF of the dividend of as is Trans are the The are approximately were share quarter Total which of loss coming entirely $XX.X of want $XX XXXX. in from million, quarter a income. comparable million somewhat the from That to strong

Interest segment higher items on due flat. done renewals is tax components favorable and was The of expense. QX the the JV segment of of within before expiration approximately million Cochin with at certain up [indiscernible]. partially XXXX the service unfavorable in the dividends Line at segment the line million up lower to inline the of the compared million had terminal the efficiency on item due of pipeline Mountain capital support rates fourth the primarily compared to The inspection Base was timing segment. on approximately Trans recognition Cochin Imperial to not 'XX asset both the was variance, terminal quarter is million segment 'XX given pipeline the in $X.X QX contract were nature same onetime coming the million non-recurrence Preferred higher $X.X QX due the to XXXX capital essentially QX interest Sustained $X.X Terminal segment up offset flat. North and revenue $XX.X by both Looking $X.X projects the and XXXX. G&A is on million. approximately due up true and The in and approximately contract via cash and higher asset on $X.X XXXX. to line for XX, EBITDA up the an interest was in by and the was as to essentially outstanding primarily proceeds the DCF

us is received the increase received distributions this had net the and take Trans Mountain feel you government, all But behalf expansion to a the going line forward from XXXX, approximately year, the DCF as and analyst of sale Looking $X.XXX I’m through liabilities my comparing items billion to CapEx such or if pieces the Generally, KMLs plus details, debt you stem and the to more I I'll not a not on the quarter, with With free and Mountain move adjustments increased less to sheet the related through lot XXXX last walk the held the next onto only assets conference XX/XX/XX at sale. is budget capital, we on less retained for facility billion, when the on you to paid I'll with generated proceeds. payoff balance there the of less purchase the Cash proceeds that year-end that, price mentioned to spend week. and as of from moving details change of government want $X.XXX call. of comments assets call. growth associated will and Trans credit focus other last we the give

distribution that’s payable balance Xrd sheet. January on proceeds voting million out approximately QX. balance billion X.XXX of the uses will That’s you me is pro account the let gain billion of approximately forma importantly, through $XXX shareholders into restricted in shown with Mountain year-end paid immediate reconciliation payables billion like, in distributions with from cash, taking distribution on to what following looks X.XXX both Trans take year-end. be and the of the cash More paid the Starting cash the sale on of KMI, special the the $X.XXX taxes $X.XXX sum that the to

those with you PP&E the Line $XX in deduct online, Trans result million AR proceeds. interest with the you that about million agreement associated increase by pieces as Base Net approximately transition an obviously receivable depreciation account on comments Mountain a from into after of coming interest Mountain Mountain $X services billing Deferred have cost with with previously current other assets to with the Other of net Getting of moving charges decreased is from and in off associated a net adjustment placed excess we This final due $XX canceled. increased we Trans in back have approximately that on result service. position facility Trans decreased on debt the unamortized with issuance assets consistent approximately write of I or as million Mountain Trans net debt assets million to to Finally, all no leaves having of taking all no $X cash the $XX sale associated KMI mentioned. the Canada items distributions. debt little million. associated

sale. liability liabilities liabilities X.X to distribution. with to parties taxes a with to million, I on as due $XXX $XXX and result Trans back on right long-term primarily Mountain distributions balance Steve. million, the will to as increased Mountain Moving the of release to payable mentioned, related the increased Other reflected current it Trans respectively primarily sale. the Other result by deferred distributions and turn sheet, that, of billion gain payable as decreased payable special of as X.X on the I tax hand And a side X

Steve Kean

late honor a General Curt to who skiing want Moffatt, our passed We December Counsel, XX Dax. moment thanks to Okay, while with away on take his family.

at trusted miss it. We'll deep mentor. human personal his a shown In a being worked connections and with addition a colleague, was We with. a to lost lost people friend a Curt and loved Curt the also with this Morgan work and being Kinder lawyer, fine fine through but he heart many him.

one will that, questions, hold on, to that to back up. follow ask that With if did question come questions, who more we and get will everyone we will one questions. Like ask as you one we Tim, time, we them. yourself you take have Okay. question if you last has -- courtesy you And to a

and back You in queue up will in just take Thank you. we get you course. the due

Operator

first [Operator our Instructions] JPMorgan. comes Tonet And with from question Jeremy

Jeremy Tonet

to on want the we've commodity start and in volatility seen account COX segment here here. off Just some prices taking of in the

segment. $X.X wondering impact the the that how to in Just this the does of the spend commodity or environment And guess the given backlog think COX I relates volatility? price how about you pace billion

Steve Kean

in also So $X.X we'll we COX And an segment, yes, this and we ongoing about on got backlog basis. in in CapEx and of business, through our more processing the gathering and COX go detail get billion the conference. will on

and take prices obviously we with account So into economics the breakeven the at. that look for projects we return the commodity

and segments. we So obviously, to both typically those be tend outs have if commodity will they ins out. prices And lower of are in

to Tall main we the make and continue and in is Cotton and topic additional substantial So we investments there the on. Tall there year will evaluate Cotton, goes whether

Jeremy Tonet

touch color and something new bit run just that? lower, to seems relate step SG&A, But down to want a like it capitalization on of it that’s seems big and some just million year-over-year. And there. helpful? like is growth wondering seem just and It CapEx if here you down, a be XX%, could more or on the more rate you could this provide or is provide any would run Thanks. a rate color little And $XX

Steve Kean

that? bit go good a David, to you through do does relate capitalization. But want right, to That’s of it

David Michels

year capital to that We rate About we on to of half $XXX about year greater reasonable capitalization SG&A capitalization. in greater the capital put a and around the million had cost. is get of spend prior burnable of $XX million would relative it

a driven So pretty spend. major by Elba a lot was of that is liquefaction which GCX, project,

XXXX lower as was had carried it big a well also that allows had percentage a result Trans subsequent as And as as major cost had of year a and off was is time an we couple time so from paid cost here our projects go we internal G&A all to Mountain. which more chunk well. really then one And course G&A over of a XXXX ongoing that of projects of we policy and we the then in in of as to change, be

Jeremy Tonet

real a forward of rate more to think way run So going about G&A it? the XXX is

David Michels

-- of depending the level spend, capital on Well, [indiscernible]… capital the the

Kim Dang

at you for our show the we'll G&A week. conference next budget And XXXX

Jeremy Tonet

to And the of way to just the that COX think that's X.X, X.X quick, first question just for my real is right confirm backlog? that about

Steve Kean

the of natural gas. in remainder all almost And is

Operator

next Thank Tudor, Colton question Co. Holt comes you. from & with Pickering, Bean our And

Colton Bean

there maybe And the So network network. bring seeing that to the a Is there you still throughput, negotiated as in improvement potential GCX there the are later rates? result that a you this for improved I increases guess in mentioned some of just in Texas? results the year. further you or Permian in South on Tejas Is service follow-on when any primarily rate

Steve Kean

as the both Yes, second just that into is so part the of dispersing ultimately consumption more network, for part of domestic come-up the on renewal. it I in improvement guess rates our question, I and first yes, State for comes export Texas gas And think that the demand. across

options. contracts many some think create have renewal opportunities, that there I which are so

Colton Bean

venture joint coal for proposed the on terminal. just guess the with I Enbridge and Then Oiltanking

were Just project existing any with and FID how some you might reach footprint there? thoughts that ancillary there to to whether opportunities if be integrates as the

Steve Kean

something see could larger add shippers. from to would So we commitments And put we is and we backlog, this not necessarily part that bills initial additionally, we with integration the our we And would but on in -- partners in first expect on. is the we early would to there need substantial the not are it that KMCC. backlog, working the bill, expect. connectivity we we're is see project, before in wouldn’t In of our development our this size to in would again, it

Operator

Thank you.

next comes from Capital Danilo with Our Markets. Juvane question BMO

Danilo Juvane

capped the can under BHP capacity get you impression MAOB. million that same little million. I the out, in incremental you do the were do in is at with on of question XXX was squeezed you uptick a already to first out to GCX? XXX things My able What this and terms

Steve Kean

Well, when we order. ordered compression, compression we upsized the

is there a if time So it though can squeeze and out. we for market more we some long was it lead item

And we here there, compression ordered I out the there. GCX larger say will tapped capacity look so little pockets for a compression And equipment. large and would with but

Danilo Juvane

to those understand respect [$X in on will the the second be come my with yet are happening are I having should with think sticking contracts pipes, about what's month to million] we is think and And to up -- California question of obviously, unfolds Are tied process... the guys How we and for bankruptcy contracts. that how about thinking month, that potential load that? assets there? to base Has you PG&E

Steve Kean

uncertainty think I there's some optimism. think there's a I for there's proceeding, in some always but cause bankruptcy --

out bankruptcy, start exclusively two impacted the -- in would is first the me PG&E particular, it first by pointing let that so Ruby Ruby that me around contracts. by potential and be specifically of out contracts Let

contracts electric load. and to generate serves generations the uses obviously those PG&E that of One power service

The distribution service other to provides business. PG&E's gas

to of those contracts -- that core or view we business. as both So PG&E's core are

represent $XX of revenue. together contracts million demand year about a two those So

service it that used those help to they is its core by told continued require there's capacity. expect our they bankruptcy PG&E entered These transport The maintain is business. important when contracts does I contracts PG&E's interest core by So PG&E uncertain CPUC of to facts. Again, into. One meeting the material and firm serve while the approved contracts a PG&E utilization matter upstream to Ruby. are are what been were is said These CPUC in customers. process obligation to contracts. The we've

the aspects help capacity I'd and recently we of the confirmed affirmation. on uncertain. it improve aspects Again, is And so takes contracts. there, diminished those those reliability process say chances reliability increase think with caused GTN an Ruby outage were And the which also

transport PG&E's basis firm considered. our -- And current that lower below to reliability though understanding least contracts. at proceeding, benefits the and they prior it's long-term So finally, contract be there did prior is not even the rate, reject bankruptcy are

of time, optimism do contracts. So reasons there what but we that's not proof with these this they'll think for are

Operator

question comes next our And you. Suisse. Thank from with Dounis Spiro Credit

Spiro Dounis

that Just back about with the of flows I asset to Should this million non-core point, be like some dividends, off should that to the the should guidance. looks Looks there? CapEx like start assumption at fund and sale into else. number hole -- remaining cash could $XXX somewhere up want think make basically majority we funded but CapEx XXXX see with or debt

Steve Kean

would we individually. small would really expectation of be are an these financing. look numbers, some But linked debt those there at at Those not

portion we the So capital you investments. of than for requirement a take would And we'll substantial conference. of more through the financing again week's all be those debt that equity requirement as in next

Kim Dang

our plenty of revolver. on there's availability And

Spiro Dounis

pipeline on then this barrels I so Express Liberty season open have the announced think XXX,XXX And touch XXX,XXX barrel go it, in down get a both wanted there's again around season projects day to Bakken, two, on the your needs that somehow latest now just during been H, if thoughts to Double announced, call XXX,XXX to on of through. these expanding the base

curious here? that Double what H Just means for

Steve Kean

actively is Yes, we them that work continue there and continue our are grow that’s we Volumes H. customers get to to something Double Cushing. on through at. capability for expansion to on looking some And solutions

Operator

Our from Harry Mateer next question with Barclays. comes

Harry Mateer

you clarify that recent And have First, should on continue we those just to on gas follow bankruptcy then from up that’s KMI place you Ruby's in of utilization indemnification just should debt? or supply even since think a is Steve, XX% Ruby. expect the How about contracts? to the agreement headline, talked of

Steve Kean

our And exists. continuous longer no indemnification are second, we in pretty with the conversations customers. First,

Harry Mateer

plans down the And KMI pay then you to mentioned February David, the maturities.

debt magnitude XXXX assume that balance the Or the due timing is should year? Day just I us next the December? maturity you give comes But late and/or the to sense planning in a of issuance manage bond of given just week. So we for in how Analyst new know can you for the are

David Michels

We of the we Analyst Day, on hand. provide on near no have will more that but cash because the term needs during

Operator

comes Our Richardson next from with question Tristan SunTrust.

Tristan Richardson

some that it'd there geographically the XQ. regions? the around Could either gas the where in backlog general transmission Just or whether projects or us is be curious on midstream added chain, natural in to highlights you give

Dax Sanders

So side, it's on part yet GMP come. LNG would the probably supporting half the is of our which that I intrastate other other say half the on to projects system midstream, and is

Tristan Richardson

on And a on for growth whether question about the not you asset you talked quick And then seems utilization just the is there potential or would there. headroom require growth like Bakken, on and or the the base today expansion volume previous for and capital? saw the existing follow further following up up

Dax Sanders

So constrained. gathering we are assets Bakken, investing because in in they our are the

have crude. And so our of Double out We would have expand have would to more takeaway it. we get investments gas we in invest H, capital there To capability to to it. and expand

Operator

of America question comes Our Lynch. with Merrill next Bank from Dennis Coleman

Dennis Coleman

hearing. that you among you or could maybe like one talk options review, by KML mean you little first options if might go wonder we questions, is much this I But strategic into bit I'm emphasized that Dax about what the if the And of Couple seemed reading about? that what too you were the a options back I listed just what be should are other thinking available. to

Dax Sanders

set talked assets the that options could as continue about. table before. concern. that the are good strategic the we've ones that are going KMI. that KML I to has think of It can I be transactions come It all one of the back articulated could

is sense. to spoken going those about the every one through and have new single of think that we’re And options one in most all think we I previously the very about. makes be which not there that So, anything I of thinking

Dennis Coleman

on York if or more just impact -- in business the that I releases the on understand some is then that guess is the to what And talked nothing that bit. there there a upon New hasn’t Edmonton is issues. a that’s I Terminal. new terminals Okay, other season, been. a you is there little just the about the expand decline, dig I is But that’s little the deeper thing is wonder I thing, one-time permanent? Harbor bit it might And it

Dax Sanders

up it's Staten same Island. the that issue brought time, It's last

able looking head strategic that we'll we're We’re our at have And it we'll on of roughly next for site to the hoping earnings a point. utilized two be water at last XX% back quarters getting there. clarity indicate We've we’re on the the job done in alternatives QX and that over call. great this but above

Kim Dang

But the access… [indiscernible] reason Island is uniquely there Staten is that impacted because and

Steve Kean

will our Jersey -- two through terminals, that barrel of it every which it uncompetitive renders makes New be on with XX.XX% there, goes them…

Operator

Ann from with comes Bernstein. Salisbury question next Our Jean

Jean Ann Salisbury

process shut on and government with or approval having the FERC, down the federal impact pipeline on your permitting side? the Is either LNG any actions

Steve Kean

that’s path, is could any funded nothing how not And on U.S. nothing permitting that’s question commission right at certain having But no. impact I now. answer not time will funded, much separate constraining shutdown this us no. not the is a broadly, have a life the impact about its much of some commission with point. on is critical it is I an Ann, currently. this on having the impact answer of path think is In on It's it wild FERC on Jean critical but more No, and there government so deadlocked mean, operate things. really

Jean Ann Salisbury

And debate then is another question, there good it some whether Permian returns. pipeline seems like have about gas

other the pipe projects And the color? of clarity that in with with appendix on the I in didn’t duration returns duration of Can projects in slide line working have meet a you're multiple projects average, the or have just better just You last and bar. your Day, their of comfortable shows than the you your gas but line average? others a mix in are you proposed Investor said backlog your that with think Permian which any that some

David Michels

We’re these contract attractive with contracts. long-term returns projects at getting under

tax that and in return expansion of on been crude able would the to But the projects with the And so good satisfied looked other we in-line require unlevered levels the and Permian in returns return haven’t they're opportunities with mean generally, participate And at double-digits out returns I XX% their gas the after unlevered good to agree if returns there returns. observation solid just otherwise after and and tax are transportation our I we we a out we're but not find Permian. that.

Steve Kean

which disciplined approach does have is as call, what are to allocate we our in with the using a This again we how said we capital.

Kinder make don’t bottom Morgan. are we for deals the sense chasing So not that

Operator

you. Thank

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

Robert Catellier

from I the curtailments operations just production Alberta? wanted on to ask is impact what the in

Steve Kean

The charge so take there not then seen they're pay we are have contracts impact. monthly warehousing have and we that an or

Robert Catellier

see you anything -- you're But But understand that or I are take there. seeing operationally, any pay wouldn’t an not impact different…

Steve Kean

No, terminal, we in volumes we the quarter. record had crude Alberta fourth actually in our

the had up quarter we averaging and all one XXX We day high XXX and a have December We of in XXX. been XX,XXX day. in hitting time to fourth were

volumes have strong. So been very

have bit the Now, in little as line. January off but it no a would it have had on bottom fall we expected impact we seen

Robert Catellier

proceeds impact And income if net versus could interest proceeds specifically on the Mountain then sales interest DCF other to I What impact related for the KML. have? that might the to the on is Trans interest trying the extract expense I'm you

Steve Kean

Yes, for we had any I quarter think didn’t KML. assume have paid-back quarter, we the what the can debt you for we drawn during

Kim Dang

income much of it's it with or interest how No, is DCF…

Steve Kean

I it's the the XX.X, think So full there. it's amount

total that is saying we am any so I amount So amount, have the… the didn’t during amounts full that piece,

Robert Catellier

amount, pretax for post XX.X… that's or tax And

Steve Kean

That’s [pretax] amount…

Operator

with question next our Michael Goldman from comes Lapides And Sachs. you. Thank

Michael Lapides

that Mexico full-year? your quantify for on being impact system the volumes move was Can towards quarter what you the the for or in either

Steve Kean

Impact Mexico… on moved volumes to

Michael Lapides

if when? directed I'm seeing your your system. now just a get is volumes system to or yet Mexico to a material whether gauge not through trying and of benefit Yes,

Kim Dang

quarter the of quarter So we our day versus to fourth the fourth million a 'XX. during feet moved Mexico on XX incremental cubic system

Michael Lapides

relatively it's relative things? of small grand the So scheme in

Kim Dang

incremental… That's

Steve Kean

in We're bcf a average. excess X of day on

Operator

our Chris And you. from Thank question next Jefferies. Sighinolfi comes with

Chris Sighinolfi

refined the looks question. the you the product on question about Mexico -- government rush gas with on want to to last down are efforts It growing following cracks trends just I prices on of pipeline export sub. guess where I ask about recently articles with seeing side.

that if at and impacting responding. how all how might be seems you curious So that's

Steve Kean

gasoline up ship our In X.X% were volumes standpoint. was distillates record and volumetric strong Houston over from volume our so on very, the X%. and on very channel and almost gasoline We ship up over total an standpoint X% movement the XX.X on a docks. diesel export were from had We alone, docks up

Chris Sighinolfi

you're reporting those numbers are Those figures, full XQ year? are or those

Steve Kean

numbers… year Full

Chris Sighinolfi

has And escalated a in seems calendar August, this but has the very in once like the changed it early of turns. we're Year lot New that

curious any have the Just in there way. altered conditions if

Steve Kean

by now ramp a move more distillates gasoline that’s up, volume been out is we're starting rail all we've repurposed of Mexico. thing and and handle crude to former the seen No, only little and rail seeing which to via that's more our is of facility,

Operator

question Beck comes with from Our next Eric Citigroup.

Eric Beck

Just to differential from XXXX. the a hedge saw COX Are quick one have quarter? similar we fairly you in that mid-cush the fourth for those levels me, what mostly in segment, to

Kim Dang

roughly It's $X a barrel.

Eric Beck

might forward, over this on follow-up, Cotton And of just of looking or you one Tall [indiscernible] that Are see depend acquisitions how acquisition additional potentially develop type Field. regarding the to quick do the time? you going

Steve Kean

and given that it but to multiple relationship our SACROC order used to the unique it perhaps field perhaps COX produces our expand that better That use could bit investments ability purposes. field and also might a was make in in Meaning we elsewhere our for to oil COX NGL, uses production. capital offsetting be its and portfolio that

for So I out unique, operations. somewhat of but an that look integrate would that with it's example call the -- and it things existing things we and that well our

Operator

question next from U.S. with comes Our Advisors. Followill Capital Becca

Becca Followill

settlement pre-settlement 'XX? one and impact guidance Tennessee. given you're change the questions, on no Two million Any to impact roughly you've that for in in on EPNG $XXX and discussions time over given

Steve Kean

have we're we update any We're -- to discussions. early guidance encouraged don't change there. engaged in two or yes, be on but systems No our outlook those in those

doing out. and in we've be environment, discussions systems. it we're to only work it the And we we'll perspective, good with to our things happy engaged would to able here on than both the a traditionally have where we those of been of the rather out process, that. come so customers still think FERC be our component from I $XXX million But prefer this is reflects just tax see

Becca Followill

structure then And us Pembina and EBITDA. back a think a the has the preferred that to you of so can of remind Ruby, I off chunk carves big there?

Would or by to disproportionally contract. if chance PG&E were to KMI? that re-cut hit abrogate So that

Steve Kean

It contracts. that’s But interest optimistic to KMI. a it Ruby. think preferred would interest matter material is you're as And there why I hit be the said, we disproportionally as said, is and also Pembina's is that these correct, about our and to reason I

Operator

Juvane Capital Our comes BMO Danilo next Markets. from with question

Danilo Juvane

for call? any next there that beyond slippage Are major firstly the KML. a questions me, follow-up potential earnings quick of may second cause on points Couple

Steve Kean

at There next an that. is like update you always call. think will to a But I we for potential earnings give feel we able the be

David Michels

like and will we Yes, right. answer on our That's have an I think feel that’s about It takes time. that we one. estimated

Danilo Juvane

a And the have you over course Is times pipeline Ann's of outlined on up contract XX multiples that follow duration? Permian the to The year the as that Jean X before. question returns.

Steve Kean

are the scenarios. careful capital I the that is a are stated sure same -- contracts we think way are XX and to the we at these second showing, satisfied to getting value are for we project what look underlying that that Yes, the in times make and the contracts a all years. year when EBITDA on with are we of And the X decision returns of make investment, variety assumptions of our in terminal variety we multiple,

Operator

comes question from Tonet Our JPMorgan. next from Jeremy

Jeremy Tonet

there could was wondering I if you quarter I Elba with bit during Or quick before first quarter, little here. drivers a was end first it up, the expand Just comfortable exactly? follow touch what's little want to a of feel guys base to happened more the the And said think you I timeline. in delay. you and now

Steve Kean

productivity. Yes, so with the continues delay to associated be contractor

obviously days are the We getting into final here.

on We that the we are watching have the progress making. people ground

the in simultaneous of commissioning are activity the We project. with completion

end that be date, closing are around uncertainty think compete. we when of QX and reasonable a a good on we we estimate for but There And here. is obviously of it it so band think will in is

Operator

I'm showing time, this At no further questions.

Steve Kean

for you you you. week most spending see us, and of Thank at Investor Day. next very much the Great. Well, with all time thank we will

Operator

Thank today's you. concludes This conference.

this at disconnect may You time.

Kinder Morgan (KMI) 16 Jan 192018 Q4 Earnings call transcript