Kinder Morgan Energy Partners LP (KMP) Misses Q4 EPS by 5c, Offers Guidance

Kinder Morgan Energy Partners LP (NYSE: KMP) reported Q4 EPS of $0.49, $0.05 worse than the analyst estimate of $0.54.

2014 Outlook

KMP expects to declare cash distributions of $5.58 per unit for 2014. KMP expects to exceed its distributable cash flow per unit target primarily as a result of the positive impact of its APT acquisition, TGP’s strong performance including a north to south firm transportation expansion (which began service in April 2014) and additional long-term contracts on its EPNG pipeline system. KMP’s $5.58 distributable cash flow per unit target for its 2014 budget, which would be a 5 percent increase over the $5.33 per unit it declared for 2013, was announced in December 2013. (Kinder Morgan Management, LLC (NYSE: KMR) also expects to declare distributions of at least $5.58 per share for 2014, and the distribution to KMR shareholders will be paid in the form of additional KMR shares.)

KMP’s expectations assume an average WTI crude oil price of approximately $96.15 per barrel in 2014, which approximated the forward curve at the time the budget was prepared. The cash generated by KMP’s assets is predominantly fee-based and is not sensitive to commodity prices. In its CO2 segment, the company hedges the majority of its oil production, but does have exposure to unhedged volumes, a significant portion of which are natural gas liquids. For 2014, the company expects that every $1 change in the average WTI crude oil price per barrel will impact the CO2 segment by approximately $7 million, or approximately 0.125 percent of KMP’s combined business segments’ anticipated segment earnings before DD&A.

For earnings history and earnings-related data on Kinder Morgan Energy Partners LP (KMP) click here.

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