Energy transportation and storage company Kinder Morgan Energy Partners, L.P. (KMP), Wednesday reported a significant rise in profit for the fourth quarter, helped mainly by lower operating costs that more than offset a decline in revenue. The company declared a quarterly cash distribution of $1.05 per unit.
Net income attributable to the Houston, Texas-based company before certain items was $366.5 million, compared to $280.7 million for the same period last year. Net income attributable to the company including items increased to $343.8 million from $266.1 million last year.
Certain items reduced net income by almost $23 million for the quarter, primarily reflecting legal and environmental reserves and hedge ineffectiveness, offset somewhat by insurance reimbursements.
Limited Partners' interest in the net income attributable to KMEP for the quarter increased to $100.5 million or $0.34 per unit from $49.2 million or $0.19 per unit in the similar period of fiscal 2008.
On average, 16 analysts polled by Thomson Reuters expected the company to earn $0.49 per unit for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter declined to $1.91 billion from $2.29 billion in the comparable quarter last year. Analysts expected the company to report revenues of $1.87 billion for the quarter.
Richard Kinder, chairman and chief executive officer of the company, said, "KMP had a very strong fourth quarter and year, overcoming lingering economic headwinds to generate enough cash flow to fully cover our annual distribution target of $4.20 per unit and end 2009 with $14 million of excess coverage, consistent with our budget."
"Our stable, cash producing assets, combined with reduced internal costs and lower interest rates, helped offset various economic headwinds that impacted our businesses during 2009, including lower refined products transportation volumes, decreased steel handling at our bulk terminals, lower crude oil prices and a difficult business environment for our Texas Intrastate pipelines," Kinder added.
By segment, Products Pipelines reported fourth quarter earnings before DD&A and certain items of $164.6 million, up 7% from $153.2 million in the comparable period last year driven by higher revenues on the Pacific, Plantation and CALNEV pipeline systems, along with higher ethanol revenues at Central Florida.
The Natural Gas Pipelines business reported fourth quarter segment earnings before DD&A and certain items of $226.0 million, up 14% from $198.8 million for the same period last year, due to better performance from the recently acquired natural gas treating assets.
The CO2 business reported fourth quarter segment earnings before DD&A and certain items of $227.7 million, up 62% from $140.5 million for the same period in 2008, when crude oil prices were much lower, due to higher NGL sales volumes and increased SACROC production.
The Terminals business reported fourth quarter segment earnings before DD&A and certain items of $154.9 million, up 10% from $140.3 million for the comparable period in 2008 due to increased liquids throughput.
Kinder Morgan Canada reported earnings before DD&A and certain items of $40.6 million for the fourth quarter, up 8% from $37.6 million for the same period in 2008.
Distributable cash flow before certain items for the quarter increased 62% to $341.8 million or $1.17 per unit from $211.0 million or $0.81 per unit in the year ago quarter.
Total costs and expenses declined to $1.49 billion from $1.97 billion a year ago. Operating expenses were $1.14 billion, down from $1.64 billion last year.
Earnings from equity investments for the quarter increased to $49.8 million from $42.3 million in the previous year. Other income was $5.7 million, compared to an expense of $11.3 million last year.
For the fiscal year 2009, net income attributable to the company declined to $1.29 billion from $1.30 billion in the previous year.
Limited Partners' interest in net income for the period declined to $355.0 million or $1.26 per unit from $499.0 million or $1.94 per unit in the prior year. Analysts expected earnings of $1.43 per unit for the fiscal 2009.
Total revenues for the year declined to $7.00 billion from $11.74 billion a year ago. Analysts expected the company to report revenues of $7.03 billion for the year.
The company also declared a quarterly cash distribution $1.05 per common unit payable on February 12, 2010, to unitholders of record as of January 29, 2010. The company's annualized cash distribution was $4.20 per unit.
Looking forward, KMP expects to declare cash distributions of $4.40 per unit for 2010, a 4.8% increase over the $4.20 per unit it distributed in 2009. The company also anticipates that its business segments will generate almost $3.4 billion in segment earnings before DD&A, an increase of almost $400 million over 2009.
The expectations assume an average WTI crude oil price of about $84 per barrel in 2010, which approximates the current forward curve for next year.
Among others in the industry, Houston, Texas-based Enterprise Products Partners L.P. (EPD) is scheduled to report its fourth quarter results on February 1. Analysts currently expect the company to report earnings of $0.48 per share, on revenues of $6.24 billion for the fourth quarter.
KMP closed Wednesday's regular trading at $64.98, down 0.12 or 0.18%, on a volume of 0.80 million shares on the NYSE. In after hours, the stock further went down 0.98 or 1.51%, trading at $64.00. In the past 52 weeks, the stock traded at a range of $40.19 - $65.32, with a 3-month average volume of 0.80 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.