By Tess Stynes
Kinder Morgan Inc. (KMI) said its third-quarter earnings rose
15% thanks to strong demand at affiliate Kinder Morgan Energy
Partners LP (KMP), partly offset by a decline at El Paso Pipeline
Partners LP (EPB).
Kinder Morgan Energy also reported an increase in distributable
cash flow per unit--a metric Kinder Morgan maintains is a key
measure of performance for master limited partnerships.
Kinder Morgan owns thousands of miles of pipelines and other
energy infrastructure and has benefited from strong production at
U.S. alternative shale fields.
The Houston-based energy company expects to complete its $44
billion deal to consolidate its four publicly traded entities into
one by the end of the year.
Under the consolidation plan, Kinder Morgan Inc., which manages
the pipeline businesses and is the general partner of the other
three entities, would acquire master limited partnerships Kinder
Morgan Energy Partners and El Paso Pipeline Partners. Kinder Morgan
Inc. also would acquire Kinder Morgan Management LLC (KMR), which
is eligible for a tax-free exchange of shares.
The restructuring is expected to allow Kinder Morgan to spend
more money acquiring rivals and expanding its more than 80,000
miles of oil and gas pipelines and other transportation
infrastructure.
Kinder Morgan Inc. Chief Executive Richard D. Kinder said
Wednesday that the company has identified a combined $17.9 billion
in expansion and joint-venture investments, up from $17 billion
reported in July and $14.4 billion a year earlier. The growth
included an increase in the backlog at Kinder Morgan Energy to
$16.3 billion from $15.4 billion.
Kinder Morgan Inc. reported a profit of $329 million, or 32
cents a share, up from $286 million, or 27 cents a share, a year
earlier. Revenue increased 14% to $4.29 billion.
Analysts polled by Thomson Reuters most recently projected
earnings of 34 cents a share on revenue of $3.98 billion.
Kinder Morgan Energy reported a profit of $963 million, up from
$689 million a year earlier. On a per-unit basis, which reflects
general partner interests, earnings rose to $1.05 from 59 cents.
Excluding a net gain related to the early termination of a
long-term natural-gas transportation contract and year-earlier
asset-sale gains and other items, earnings increased to 57 cents
from 51 cents. Revenue grew 16% to $3.93 billion.
Analysts polled by Thomson Reuters most recently projected
earnings of 63 cents on revenue of $3.57 billion.
The natural-gas pipeline business reported adjusted segment
earnings rose 9%, amid strong results at its Tennessee Gas
Pipeline, which remained in strong demand thanks to continuing
growth in the Marcellus and Utica shale plays unit. A number of
expansion projects in the past year or so contributed to an 18%
increase in volume on the pipeline.
Overall natural-gas transport volumes improved 10%, while
gathering volumes grew about 6%.
El Paso Pipeline Partners reported a profit of $130 million,
down from $141 million. On a per-unit basis, which reflects the
general partner interests, earnings fell to 31 cents from 40 cents.
Revenue fell 4.6% to $352 million.
Analysts polled by Thomson Reuters most recently projected
earnings of 39 cents on revenue of $386 million.
Write to Tess Stynes at tess.stynes@wsj.com
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