Represents 17% Growth Over 2007 Budgeted Distribution per Unit
HOUSTON, Nov. 26 /PRNewswire-FirstCall/ -- Kinder Morgan Energy Partners, L.P. (NYSE:KMP) today announced it expects to declare cash distributions of $4.02 per unit for 2008. This projection includes contributions from assets currently owned by KMP and does not include any benefits from unidentified acquisitions.
KMP Chairman and CEO Richard D. Kinder said, "We expect to grow our distribution per unit about 17 percent in 2008 relative to our 2007 budget of $3.44. As we stated previously, we anticipate actual distributions per unit for 2007 will come in above budget. Our business units in 2008 are projected to deliver approximately $2.6 billion in distributable cash flow, which is an increase of about $500 million over their 2007 performance." Additionally, the 2008 budget includes an excess of distributable cash flow over distributions of approximately $15 million.
"We are very excited to begin to deliver back to our KMP unitholders and KMR shareholders the value being created through our large expansion capital program," Kinder said. "Our expected robust growth in 2008 will be fueled by the addition of Rockies Express-West, higher hedge prices on our crude production and anticipated strong performance from our other assets." Kinder noted the CO2 segment is expected to produce incremental distributable cash flow of approximately $200 million in 2008, but that growth will be driven by higher hedge prices rather than an expected increase in volumes. Budgeted production volumes for the SACROC Unit in 2008 are slightly below the volumes being realized in 2007.
"Our capital expansion program will continue to be significant in 2008, as we expect to invest about $2.1 billion in expansion capital expenditures (including equity contributions to the Rockies Express and Midcontinent Express pipeline projects) which will drive growth in 2009 and beyond," Kinder said.
The company remains committed to transparency and a detailed budget for KMP will be discussed during the company's annual analyst meeting Jan. 24, 2008, in Houston, and will be published on the company's web site, http://www.kindermorgan.com/. The 2008 budget will be the standard by which KMP measures its performance next year and will be a target for determining employee bonuses.
Kinder Morgan Management, LLC Kinder Morgan Management, LLC (NYSE:KMR) expects to declare cash distributions of $4.02 per share for 2008. The distribution to KMR shareholders will be paid in the form of additional KMR shares. The distribution is calculated by dividing the cash distribution to KMP unitholders by KMR's average closing price for the 10 trading days prior to KMR's ex-dividend date.
Kinder Morgan Energy Partners, L.P. (NYSE:KMP) is a leading pipeline transportation and energy storage company in North America. KMP owns an interest in or operates more than 24,000 miles of pipelines and 150 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle bulk materials like coal and petroleum coke. KMP is also the leading provider of CO2 for enhanced oil recovery projects in North America. One of the largest publicly traded pipeline limited partnerships in America, KMP has an enterprise value of approximately $20 billion. The general partner of KMP is owned by Knight Inc. (formerly Kinder Morgan, Inc.), a private company.
The non-generally accepted accounting principles financial measures of distributable cash flow or distributable cash flow per unit, are presented in this news release. For KMP overall, we define distributable cash flow to be limited partners' pretax income before DD&A less cash taxes paid and sustaining capital expenditures for KMP, plus DD&A less sustaining capital expenditures for Rockies Express, our equity method investee. For our segments we define distributable cash flow as segment net income (which is before corporate costs of G&A and interest) plus DD&A less sustaining capital expenditures. The components of the difference between overall KMP distributable cash flow and segment distributable cash flow are cash versus book taxes, DD&A and sustaining capital expenditures on Rockies Express, G&A, interest, minority interest and the general partner's interest. The amounts included in the calculation of this measure are computed in accordance with generally accepted accounting principles (GAAP), with the exception of "sustaining capital expenditures," which is not a defined term under GAAP. Consistent with the partnership agreement of Kinder Morgan Energy Partners, L.P., sustaining or maintenance capital expenditures are defined as capital expenditures (as defined by GAAP) which do not increase the capacity of an asset. We routinely calculate and communicate these measures to investors. We believe that continuing to provide this information results in consistency in our financial reporting. In addition, we believe that these measures are useful to investors because they enhance the investors' overall understanding of our current financial performance and our prospects for future performance. Specifically, we believe that these measures provide investors an enhanced perspective on the operating performance of our assets and the cash that our businesses are generating.
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Kinder Morgan believes that its expectations are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein are enumerated in Kinder Morgan's Forms 10-K and 10-Q as filed with the Securities and Exchange Commission. DATASOURCE: Kinder Morgan Energy Partners, L.P.
CONTACT: Media Relations, Larry Pierce, +1-713-369-9407, or Investor Relations, Mindy Mills, +1-713-369-9490, both of Kinder Morgan Energy Partners, L.P.
Web site: http://www.kindermorgan.com/
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