Kinder Morgan 2000 Results Up 75%
Kinder Morgan, Inc. reported "a spectacular 2000," with a 75% increase over 1999 and a 65% increase in fourth quarter earnings. In the fourth quarter KMI beat the consensus estimate of 41 cents a share, coming in with earnings of 43 cents.
For calendar year 2000, KMI earnings were $146.7 million, or $1.28 per diluted common share, from continuing operations before merger-related costs and gain on the sale of assets. That compares to $58.8 million, or $0.73 per diluted common share, for 1999.
Earnings for the fourth quarter were $50.6 million, or $0.43 per diluted common share, from continuing operations before merger-related costs and gain on the sale of assets. That compares to $28.7 million, or $0.26 per diluted common share, for the fourth quarter of 1999.
"KMI had a spectacular 2000, and we expect significant additional growth in 2001 and beyond," said Chairman Richard D. Kinder. "We have fully transformed KMI into a growth company by successfully completing the KMI turnaround, which began when we merged with KN Energy in the fall of 1999. Our 'back-to-basics' strategy was a huge success, as we increased utilization of existing assets, reduced costs across the board, divested our non-core assets and strengthened our balance sheet." Kinder noted that KMI's total return to shareholders was nearly 160% in 2000.
"Looking ahead, 2001 is off to a good start," Kinder said. "KMI anticipates earnings per share growth in the 30 to 40% range ($1.66 to $1.79 earnings per share).
Overall, KMI reported fourth quarter net income of $54.8 million, or $0.46 per diluted common share. That compares to a loss of $231.6 million, or a loss of $2.10 per diluted common share, during the fourth quarter of 1999 when KMI took a $248 million net after-tax charge for the divestiture of non-core assets and merger-related costs, and recorded a gain from the contribution of assets to Kinder Morgan Energy Partners, L.P. In 2000, KMI produced $152.0 million in net income, or $1.32 per diluted common share, compared to a loss of $239.7 million, or a loss of $2.99 per diluted common share, the previous year.
KMI benefited significantly from its ownership of the general partner of KMP, the largest pipeline master limited partnership in the United States. KMI will receive $44.5 million in total cash distributions from KMP for the fourth quarter of 2000, up 180% from $15.9 million during the same period last year. A full year comparison is not relevant because KMI did not own the general partner of KMP until the merger with KN Energy became final in October of 1999. "As KMP's cash flow grows, KMI's general partner share of that cash flow grows dramatically," Kinder explained. "KMI's cash flow from KMP nearly tripled this quarter due to internal growth in KMP's pipeline segments and the strong performance of recent KMP acquisitions."
After the effects of equity accounting and amortization, KMP contributed $34.7 million of pre-tax earnings to KMI in the fourth quarter and $112.6 million of pre-tax earnings in 2000.
Natural Gas Pipeline Company of America (NGPL), a wholly owned subsidiary of KMI, had segment earnings of $89.4 million in the fourth quarter, a 9% increase over the same period a year ago, and $342.9 million in 2000, about 12% higher than in 1999. Kinder noted that NGPL has sold out its capacity through the winter season. "Due to the high percentage of revenues that NGPL derives from demand charges, we expect consistent results in the first quarter of 2001."
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