Kinder Morgan (NYSE: KMI) reported Q1 EPS of $0.12, may not compare to the analyst estimate of $0.19. Revenue for the quarter came in at $3.2 billion versus the consensus estimate of $3.74 billion.

2016 Outlook

For 2016, KMI expects to declare dividends of $0.50 per share. KMI's budgeted distributable cash flow available to common equity holders (i.e., after payment of preferred dividends) is approximately $4.7 billion and budgeted EBITDA is approximately $7.5 billion. Due to continued weakness in the energy sector in 2016, the company now expects EBITDA to be about 3 percent below its plan and distributable cash flow to be about 4 percent below its plan. KMI expects to generate excess cash sufficient to fund its growth capital needs without needing to access capital markets and expects to achieve its targeted year-end debt to EBITDA ratio of 5.5 times. KMI's growth capital forecast for 2016 is approximately $2.9 billion, a reduction of $400 million from its budget of approximately $3.3 billion and a reduction of $1.3 billion from its preliminary 2016 guidance of approximately $4.2 billion.

The overwhelming majority of cash generated by KMI is fee-based and therefore is not directly exposed to commodity prices. The primary area where KMI has commodity price sensitivity is in its CO2 segment, and KMI hedges the majority of its next 12 months of oil production to minimize this sensitivity. For 2016, the company estimates that every $1 per barrel change in the average West Texas Intermediate (WTI) crude oil price from the company's budget of $38 per barrel would impact its budgeted distributable cash flow by approximately $6.5 million and each $0.10 per MMBtu change in the price of natural gas from the company's budget of $2.50 per MMBtu would impact its budgeted distributable cash flow by approximately $0.6 million. The company’s sensitivity to oil and gas prices for the remainder of the year substantially declines as the year progresses and as additional hedges are put in place.

In light of the continued weak commodity price environment, KMI continues to closely monitor counterparty exposure and obtain collateral when appropriate. However, the company has operations across a broad set of industries and has a large customer base, with its average customer representing less than one-tenth of a percent of annual revenues. Additionally, approximately two-thirds of KMI's revenue from material counterparties comes from customers who are end-users of the products KMI transports and stores, such as utilities, local distribution companies, refineries and large integrated firms

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