Kinder Morgan’s earnings per share
Kinder Morgan (KMI) reported its 4Q15 earnings on January 20, 2016. Its 4Q15 actual earnings per share fell to -$0.29 from $0.08 in 4Q14. KMI’s 2015 earnings per share stood at $0.14 versus $0.89 in 2014. The decline in net income was mainly due to the loss recognized on impairment of goodwill, higher depletion, depreciation, and amortization expenses, and higher interest expenses. KMI pays a considerable amount of its earnings as interest expenses due to its huge outstanding debt. KMI’s net debt was $41.2 billion at the end of the fourth quarter.
According to Wall Street estimates, KMI peers Williams Partners (WPZ), EnLink Midstream Partners (ENLK), and DCP Midstream Partners (DPM) are expected to post year-over-year earnings growth of -5.6%, -49.5%, and 48.6%, respectively, in 4Q15 versus 4Q14.
Kinder Morgan beat its 4Q15 earnings estimate. For 4Q15, consensus estimates were ~$0.18 while analyst adjusted EPS stood at $0.22—beating estimates by 20.4%.
Kinder Morgan’s total EBDA
Kinder Morgan’s total EBDA [1. earnings before depreciation and amortization] before certain items that were non-controllable by its business segments rose to $1,984 million in 4Q15 from $1,972 million in 4Q14. This marks a year-over-year increase of 0.6%. The increase was mainly driven by an increase at KMI’s Natural Gas Pipelines and Product Pipelines segments. This was offset by poor performance from KMI’s CO2 and Terminals segments.
- Natural Gas Pipelines: The segment’s performance was driven by higher natural gas transport volumes. This was offset by lower processing margins at the segment’s natural gas midstream business.
- Product Pipelines: KMI’s Product Pipelines benefitted from higher volumes along the Kinder Morgan Crude and Condensate Pipeline, recent acquisitions, and projects placed into service.
- Terminals: The segment’s performance was negatively affected mainly by bankruptcy filings from two of KMI’s coal customers, Arch Coal and Alpha Natural Resources. But the segment’s liquids throughput volumes continue to grow.
- CO2: KMI’s CO2 segment was the worst affected by the decline in commodity prices.
Kinder Morgan’s distributable cash flows
KMI’s 4Q15 distributable cash flow before certain items was $1,233 million versus $1,278 million in 4Q14. This is a year-over-year decrease of 3.5%. Plus, KMI’s 2015 distributable cash flow fell short of its budget. KMI is 6.7% of the MLP and Energy Infrastructure ETF (MLPX).