Kinder Morgan Announces Sale of Pembina Shares
January 09 2020 - 9:00AM
Business Wire
Proceeds will be used to pay down
debt
Kinder Morgan, Inc. (NYSE: KMI) today announced it has sold all
of the approximately 25 million shares of Pembina Pipeline
Corporation (TSX: PPL; NYSE: PBA) (Pembina) stock it received in
connection with Pembina’s acquisition of the outstanding common
equity of Kinder Morgan Canada Limited. The sale of these shares is
consistent with KMI’s previously announced intention to convert the
shares into cash in an opportunistic and non-disruptive manner, and
the after-tax proceeds of $764 million are consistent with KMI’s
2020 budget. As previously disclosed, KMI intends to use the
proceeds to pay down debt – creating balance sheet flexibility in
2020 (relative to KMI’s long-term leverage target of 4.5 times Net
Debt-to-Adjusted EBITDA).
About Kinder Morgan,
Inc.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. Our mission is to
provide energy transportation and storage services in a safe,
efficient and environmentally responsible manner for the benefit of
people, communities and businesses. Our vision is delivering energy
to improve lives and create a better world. We own an interest in
or operate approximately 83,000 miles of pipelines and 151
terminals. Our pipelines transport natural gas, refined petroleum
products, crude oil, condensate, CO2 and other products, and our
terminals transload and store liquid commodities including
petroleum products, ethanol and chemicals, and bulk products,
including petroleum coke, metals and ores. For more information,
please visit www.kindermorgan.com.
Non-GAAP Financial
Measures
The non-generally accepted accounting principles (non-GAAP)
financial measures of net income before interest expense, income
taxes, depreciation, depletion, amortization, or DD&A,
including amortization of excess cost of equity investments, and
Certain Items (Adjusted EBITDA); and Net Debt are referenced
herein.
Our non-GAAP measures described further below should not be
considered alternatives to GAAP net income or other GAAP measures
and have important limitations as analytical tools. Our
computations of these non-GAAP measures may differ from similarly
titled measures used by others. You should not consider these
non-GAAP measures in isolation or as substitutes for an analysis of
our results as reported under GAAP. Management compensates for the
limitations of these non-GAAP measures by reviewing our comparable
GAAP measures, understanding the differences between the measures
and taking this information into account in its analysis and its
decision-making processes.
We do not provide budgeted net income, the GAAP financial
measure most directly comparable to the non-GAAP financial measure
of Adjusted EBITDA, due to the impracticality of quantifying
certain components required by GAAP such as: ineffectiveness of
commodity, interest rate and foreign currency hedges; unrealized
gains and losses on derivatives marked to market; and potential
changes in estimates for certain contingent liabilities.
Certain Items, as adjustments used
to calculate our non-GAAP measures, are items that are required by
GAAP to be reflected in net income, but typically either (1) do not
have a cash impact (for example, asset impairments), or (2) by
their nature are separately identifiable from our normal business
operations and in our view are likely to occur only sporadically
(for example certain legal settlements, enactment of new tax
legislation and casualty losses).
Adjusted EBITDA is calculated by
adjusting net income before interest expense, income taxes, and
DD&A, including amortization of excess cost of equity
investments (EBITDA), for Certain Items, KMI’s share of
unconsolidated joint venture (JV) DD&A and income tax expense
(net of our partners’ share of consolidating JV DD&A and income
tax expense), and net income attributable to noncontrolling
interests. Adjusted EBITDA is used by management and external
users, in conjunction with our Net Debt (as described further
below), to evaluate certain leverage metrics. Therefore, we believe
Adjusted EBITDA is useful to investors. We believe the GAAP measure
most directly comparable to Adjusted EBITDA is net income.
Net Debt is calculated by
subtracting from debt (i) cash and cash equivalents, (ii) the
preferred interest in the general partner of Kinder Morgan Energy
Partners L.P., (iii) debt fair value adjustments and (iv) the
foreign exchange impact on Euro-denominated bonds for which we have
entered into currency swaps. We believe Net Debt is useful to
investors and other users of our financial information in
evaluating our leverage. We believe the most comparable measure to
Net Debt is debt net of cash and cash equivalents.
Important Information Relating to
Forward-Looking Statements
This news release includes forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995 and Section 21E of the Securities Exchange Act of 1934.
Generally the words “expects,” “believes,” anticipates,” “plans,”
“will,” “shall,” “estimates,” and similar expressions identify
forward-looking statements, which are generally not historical in
nature. Forward-looking statements in this news release include,
among others, express or implied statements pertaining to KMI's
expected Net Debt-to-Adjusted EBITDA ratio. Forward- looking
statements are subject to risks and uncertainties and are based on
the beliefs and assumptions of management, based on information
currently available to them. Although KMI believes that these
forward-looking statements are based on reasonable assumptions, it
can give no assurance as to when or if any such forward-looking
statements will materialize nor their ultimate impact on our
operations or financial condition. Important factors that could
cause actual results to differ materially from those expressed in
or implied by these forward-looking statements include the risks
and uncertainties described in KMI’s reports filed with the
Securities and Exchange Commission (SEC), including its Annual
Report on Form 10-K for the year-ended December 31, 2018 (under the
headings “Risk Factors” and “Information Regarding Forward- Looking
Statements” and elsewhere) and its subsequent reports, which are
available through the SEC’s EDGAR system at www.sec.gov and on our
website at ir.kindermorgan.com. Forward- looking statements speak
only as of the date they were made, and except to the extent
required by law, KMI undertakes no obligation to update any
forward-looking statement because of new information, future events
or other factors. Because of these risks and uncertainties, readers
should not place undue reliance on these forward-looking
statements.
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Kinder Morgan Contacts
Media Relations Dave Conover (713) 369-9407
newsroom@kindermorgan.com
Investor Relations (800) 348-7320 km_ir@kindermorgan.com
www.kindermorgan.com
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